To unitholders in the United States:

This exchange offer or business combination is made for the securities of a foreign
investment corporation. The offer is subject to disclosure requirements of a foreign country
that are different from those of the United States. Financial statements included in the
document, if any, have been prepared in accordance with foreign accounting standards that
may not be comparable to the financial statements of United States companies.

It may be difficult for you to enforce your rights and any claim you may have arising under
the federal securities laws, since the issuer is located in a foreign country, and some or all of
its officers may be residents of a foreign country. You may not be able to sue a foreign
investment corporation or its officers in a foreign court for violations of the U.S. securities
laws. It may be difficult to compel a foreign investment corporation and its affiliates tosubject themselves to a U.S. court’s judgment.

You should be aware that the issuer may purchase securities otherwise than under theexchange offer, such as in open market or privately negotiated purchases.

1[For Translation Purposes Only]
May 26, 2016

For Immediate Release
To Whom It May Concern
Issuer of Real Estate Investment Trust Securities:
Nomura Real Estate Master Fund, Inc.
5-1, Nishi-Shinjuku 8-chome, Shinjuku-ku, Tokyo
Securities Code: 3462
Satoshi Yanagita, Executive Director
Asset Management Company:
Nomura Real Estate Asset Management Co., Ltd.
Norio Ambe, President & Chief Executive Officer
Inquiries:
Ken Okada
Director and Managing Executive Officer
TEL. +81-(0)3-3365-8767
Issuer of Real Estate Investment Trust Securities:
Top REIT, Inc.
3-7, Yaesu 1-chome, Chuo-ku, Tokyo
Securities Code: 8982
Junichi Sahara, Executive Officer
Asset Management Company:
Top REIT Asset Management Co., Ltd.
Tatsuya Chiba, President and Representative Director
Inquiries:
Mitsuru Akashi
Director, General Manager Financial Division
TEL. +81-(0)3-3243-2181

Notice Concerning Execution of Merger Agreementby and between Nomura Real Estate Master Fund, Inc. and Top REIT, Inc.
Nomura Real Estate Master Fund, Inc. (“NMF”) and Top REIT, Inc. (“TOP”; and collectively with NMF referred toas the “Investment Corporations” hereinafter) announce that they have respectively resolved at their respective boardof directors meetings held today to implement an absorption-type merger as mentioned below, with NMF as thesurviving corporation and TOP as the absorbed corporation (the “Merger”) with the effective date being September 1,
2016, and that the Investment Corporations have entered into a merger agreement (the “Merger Agreement”) dated
today.

1. Purpose of Merger
The Japanese economy has continued on its gentle recovery, although there are trends of companies andhouseholds being cautious in their economic activities backed by the deceleration of the global economy andother factors. Though there is a possibility that negative factors may worsen, movement towards an economic2

improvement has continued in 2016 through various measures such as the Bank of Japan’s additional monetaryeasing measures. Furthermore, the Japanese economy is expected to head towards positive cycles in themedium to long term backed by, among other factors, the progression of Abenomics.
Under such an environment, the J-REIT market has been experiencing inflows of both domestic and foreign
investment capital due to expectations for recovery of the Japanese economy and the real estate market.
Supported by such favorable funding environment, there are continuous active property acquisitions
accompanying new listings of J-REITs and public offering by existing J-REITs. In addition, the Investment
Corporations are facing changes in the business environment, such as intensified acquisition competition causedby emerging players in the real estate market, polarization of size among J-REITs, and diversification of
investment asset types of J-REITs, and a partial movement toward reorganization can also be seen.
NMF was established as a top class diversified type REIT in the J-REIT market on October 1, 2015 through aconsolidation-type merger between the former Nomura Real Estate Master Fund, Inc., Nomura Real Estate
Office Fund, Inc. and Nomura Real Estate Residential Fund, Inc. (the “Previous Merger”) and commenced its
management of a portfolio of 257 properties with a total acquisition price of approximately JPY 784.9 billion,
based on the following concepts:i) Pursue sustainable growth by transforming from “Specialized type J-REIT” to “Diversified type J-REIT”
ii) Strengthen stability and enhance growth strategy through the benefits of a large scale REITiii) Accelerating mutual growth with Nomura Real Estate Group by establishing “Leasing Business Value
Chain”
NMF adopts a basic policy of conducting management pursuing “securing stable medium- to long-term income”
and “delivering steady portfolio growth,” and aims for the growth of unitholders’ value through the above
concepts of the Previous Merger; “Diversified Type Strategy,” “Large-Scale REIT Strategy” and “Utilization of
Leasing Business Value Chain.”
Further, NMF draws up its “Mid- to Long-term Management Strategy” in order to embody the three basic
strategies above and makes effort to realize steady growth based on its mid- to long- term prospects. In theMid- to Long-term Management Strategy, the initial 10 years are divided into 3 phases (Quality phase, Growthphase and Master phase) and specific focused measures and targets are established with respect to each phase.
The initial 3-to-5 years are positioned as the Quality phase and NMF is promoting growth toward an asset scaleof 1 trillion yen, which is the mid-phase target, as well as implementing Strategic Property Replacements(“SPRs”) for the purpose of enhancement of the portfolio quality and internal growth centering on “upside
sectors” (sectors in which increases in rental revenues are expected, e.g., offices and retail facilities locatednear stations).
As a part of the foregoing, NMF implemented the first step of SPRs (acquisition of 3 properties and dispositionof 8 properties) disclosed as of March 29, 2016, and announced on May 9, 2016 the second step of SPRs
(acquisition of 1 property from and disposition of 3 properties to NMF’s sponsor, Nomura Real Estate
Development Co., Ltd.) by utilizing the Leasing Business Value Chain of Nomura Real Estate Group as well as
the third step of SPRs (acquisition of 1 property from and disposition of 6 properties to third parties other than
Nomura Real Estate Group). NMF has steadily promoted the enhancement of portfolio quality as above, and,following the implementation of these SPRs, its portfolio will consist of 253 properties with a total acquisition
price of approximately JPY 795.4 billion.
TOP was listed on the REIT section of the Tokyo Stock Exchange on March 1, 2006 and commenced its
management of a portfolio of 7 properties with a total acquisition price of approximately JPY 104.3 billion(including the NEC Head Office Building). TOP was sponsored by The Sumitomo Trust and Banking Co., Ltd.
(current Sumitomo Mitsui Trust Bank, Limited; “SMTB”), OJI REAL ESTATE CO., LTD. (“Oji”) and Nippon
Steel City Produce, Inc. (current NIPPON STEEL KOWA REAL ESTATE CO., LTD.); “NSKRE”). The key
strategies of TOP have been “Optimal Application of the Sponsors’ Strengths” and “Skilled Management ofDiversified Portfolio” in which office buildings, retail facilities and residences are the main investment targets,
and TOP has grown its portfolio to 20 properties with a total acquisition price of approximately JPY 190.4
billion to date through broad investment opportunities and pursuing “stability” and “growth potential” ofprofitability through utilizing features of its unique asset classes.
For over 10 years of management, TOP has made efforts to acquire properties in a well-timed manner; however,
due to the challenges encountered in steadily securing acquisition opportunities that would not be affected bychanges in the real estate market, TOP was unable to achieve its asset scale target of JPY 210 billion, which had
been indicated as the target size for its portfolio from the perspective of risk diversification since its listing.
Further, NSKRE withdrew as one of the sponsors in September 2012. With such a background, TOP has sought
to invite potential sponsors in the developer category that have abundant property pipelines, aiming to secure
growth potential for its portfolio and establish its stability in the future.

3

Under these circumstances, taking as an opportunity the establishment of NMF through the Previous Merger as
a diversified type J-REIT sponsored by Nomura Real Estate Group, one of the leading general real estatedevelopers in Japan, NMF and TOP have consulted with each other and considered the Merger since February
2016, as a measure to contribute to the growth of unitholders’ value in respect of each of NMF and TOP.
Through the Merger, NMF believes that it would be able to obtain a rare opportunity for external growth in thecompetitive real estate acquisition market and that, in addition, it is expected to obtain an increase in theinvestment ratio of the properties in upside sectors or located within Tokyo's five central wards, for which
future internal growth can be expected. Through the Merger, TOP believes that external growth is expected to
be promoted in association with the reinforcement of the property pipeline sponsored by Nomura Real EstateGroup, which is a general real estate developer, and that, in addition, the significant diversification of theportfolio will be achieved and thereby the improvement of income stability can be expected. As stated above,
the Investment Corporations reached the common understanding that the Merger is the best measure tocontribute to the growth of unitholders’ value in respect of each of NMF and TOP and entered into the Merger
Agreement today.
Through the Merger, the Investment Corporations believe that (i) NMF’s portfolio size after the Merger would
reach JPY 933.1 billion and that NMF’s position as a top class diversified type J-REIT can be firmly
established; (ii) in addition, stability of income would increase due to the improvement of portfolio quality as
well as the improvement of risk tolerance; and (iii) both external and internal growth can be pursued by making
use of Nomura Real Estate Group’s development capability, extensive know-how and brand.
The investment policy after the Merger follows NMF’s “Mid- to Long-term Management Strategy”, aiming forthe growth of unitholders’ value by “securing stable medium- to long-term income” and “delivering steady
portfolio growth” while continuously improving portfolio quality through the promotions of SPRs and seeking
internal growth mainly in the upside sectors.
2.

Outline of the Merger(1)

Schedule of the Merger
Board of directors meetings for approval of the Merger Agreement(NMF/TOP)

Execution date of the Merger Agreement

May 26, 2016
May 26, 2016

Date of public notice of record date for general meeting ofunitholders(TOP)

May 27, 2016 (planned)

Record date for general meeting of unitholders(TOP)

June 13, 2016 (planned)

Date of holding of general meeting of unitholders(TOP)

July 28, 2016 (planned)

Date of delisting(TOP)

August 29, 2016 (planned)

Effective date of Merger

September 1, 2016 (planned)

Date of corporate registration of Merger

Early September 2016 (planned)

NMF plans to implement the Merger under the Merger Agreement in accordance with the simplified merger
procedures based on the provisions of Article 149-7, Paragraph 2 of the Act on Investment Trusts and Investment
Corporations (Law No. 198 of 1951, as amended; the “Investment Trust Act”), without obtaining the approval of ageneral meeting of unitholders set forth in Paragraph 1 of the same Article.

(2)

Format of the Merger
The Merger will be implemented through an “absorption-type merger” (kyushu gappei) method under which
NMF is to be the surviving corporation, and TOP is to be dissolved through the Merger.

(3)

Ratio of Allotment under the Merger
TOP
NMF(absorbed corporation)(surviving corporation)
Ratio of Allotment12.62(Note 1) Number of investment units of NMF to be issued as a result of merger: 461,120 units (planned)(Note 2) Fractions of less than one unit will be generated for the number of investment units to be allotted to the4unitholders of TOP through the allotment of 2.62 units of NMF per unit of TOP. These fractional units will besold through a market transaction in accordance with statutory provisions, and the proceeds from the sale will bedelivered to the unitholders who hold fractions, in proportion to the size of their fractional holding.
(Note 3) In addition to the above investment units, instead of cash distributions to the unitholders of TOP for TOP’s
final fiscal period ending on the day immediately prior to the effective date of the Merger, NMF will, within areasonable period after the effective date of the Merger, make a cash distribution to the unitholders listed orrecorded on the final unitholders register of TOP as of the day immediately prior to the effective date of the
Merger (excluding the unitholders of TOP who have demanded the purchase of their investment units pursuant
to the provisions of Article 149-3 of the Investment Trust Act) (the “Allotted Unitholders”), in an amountequivalent to the cash distributions for the final fiscal period (the payment will be the amount of distributableprofit of TOP as of the day immediately prior to the effective date of the Merger divided by the number ofinvestment units that is obtained by deducting (a) the number of investment units held by the unitholders otherthan the Allotted Unitholders from (b) the number of investment units issued and outstanding of TOP, as ofthe day immediately prior to the effective date of the Merger (such calculated amount being rounded down to
the nearest whole yen)). The details will be announced once they are determined.

(4)

Amendment to the Articles of Incorporation of the Surviving Corporation
Currently, it is not planned to amend the Articles of Incorporation of NMF.

(5)

Major Conditions Precedent for the Merger
The Merger will be implemented on the basis that all of the following conditions as well as the otherconditions set forth in the Merger Agreement are fully satisfied, and if any of such conditions are unsatisfied asof the day immediately prior to the effective date of the Merger or if it is proven that any of such conditions
will not be satisfied by the day immediately prior to the effective date of the Merger, either of NMF and TOP
may terminate the Merger Agreement by giving written notice to the other party prior to the effective date of
the Merger.
● It has been confirmed in a manner and substance reasonably satisfactory to NMF and TOP that the filingof a registration statement on Form F-4 is not required for the Merger under the U.S. securities laws.
● With respect to both NMF and TOP, the procedures pursuant to applicable laws and regulations and theinternal rules of NMF and TOP (with respect to TOP, including the approvals at the general meeting ofunitholders of TOP), and obtaining permits and approvals as required to implement the Merger or thematters contemplated in connection with the Merger, have been completed.
● Prior consent has been obtained from all of the financial institutions that have been providing loans to
NMF and TOP, regarding the implementation of the Merger and the terms and conditions for the lendingon and after the effective date of the Merger (with respect to loan agreements, including thecountermeasures for the prevention of the occurrence of breaches of financial covenants, breaches ofcovenants, and events of default, attributable to the surviving corporation), and such consent has not been
withdrawn by any of such financial institutions.
● Prior consent has been obtained, regarding the implementation of the Merger, from counterparties ofagreements, etc. under which NMF and TOP have been required to obtain such counterparties’ approvals
regarding the implementation of the Merger.
● The purchase and sale of the properties for which purchase and sale agreements had been executed prior
to or on the execution date of the Merger Agreement has been already completed (or, if the closing date ofsuch transaction is set on or after the effective date of the Merger, there is no specific likelihood that suchtransaction cannot be completed).

3.

Basis of Determination for the Merger Ratio and Related Items(1)

Basis of Determination
For the purpose of determining the merger ratio to be adopted in the Merger, in view of ensuring fairness, NMF
and TOP appointed a financial advisor for the Merger and requested each financial advisor to perform afinancial analysis of the merger ratio. NMF appointed Nomura Securities Co., Ltd. (“Nomura Securities”), andTOP appointed Daiwa Securities Co. Ltd. (“Daiwa Securities”).
Nomura Securities performed a financial analysis of the merger ratio for each of NMF and TOP, adopting (i)the average market investment unit price analysis, as investment units of each of NMF and TOP arerespectively listed on Tokyo Stock Exchange, Inc. (“TSE”) and the market investment unit price is available,(ii) the comparable similar investment corporation analysis, as each of NMF and TOP has several comparable
listed investment corporations and the investment unit value may be analogically inferred by the comparable

5

similar investment corporation analysis, (iii) the discounted cash flow analysis (“DCF Analysis”) in order toreflect the future performance of business activity in the financial analysis, and (iv) the adjusted net asset value
approach in order to reflect the effect on the market value and exchangeability into cash. A summary of thefinancial analysis performed by Nomura Securities is as follows.
Financial Analysis Approach

NMF

TOP

Average market investment unit priceanalysis (reference date (i))

12.52 – 2.81

Average market investment unit priceanalysis (reference date (ii))

12.46 - 2.82

Comparable similar investment
corporation analysis

12.00 – 3.68

DCF Analysis

12.57 – 2.96

Adjusted net asset value approach

1

2.55

Concerning the average market investment unit price analysis (reference date (i)), the financial analysis date is
set as May 25, 2016 (“Reference Date (i)”) and the closing price on Reference Date (i) and the averages of
the closing prices for the one-week, one-month, three-month and six-month periods up to the Reference Date(i) were employed. In addition, concerning the average market investment unit price analysis (reference date(ii)), the financial analysis date is set as May 18, 2016 (“Reference Date (ii)”), which falls on the last trading
date prior to the date on which a media report on the Merger based on speculation was made, and the closing
price on the Reference Date (ii) and the averages of the closing prices for the one-week, one-month, threemonth and six-month periods up to the Reference Date (ii) were employed. Please refer to (Note 1) at the endof this press release for more detailed information regarding the assumptions and disclaimers for the analysis
of Nomura Securities.
In the future profit plan of NMF and TOP which Nomura Securities referred to as the basis for the DCF
Analysis, there is no fiscal period in which a considerable increase or decrease in profits is expected.
Daiwa Securities performed a financial analysis of the merger ratio for each of TOP and NMF, adopting (i) themarket investment unit price analysis, as investment units of the Investment Corporations are respectively
listed on TSE and the market investment unit price is available, (ii) the comparable similar investment
corporation analysis, as each of the Investment Corporations has several comparable listed similar investment
corporations and the investment unit value may be inferred by the comparable similar investment corporation
analysis, and (iii) the dividend discount model analysis (“DDM Analysis”) in order to reflect the future
performance of business activity in the financial analysis. A summary of the financial analysis performed by
Daiwa Securities is as follows.
Financial Analysis Approach

NMF

TOP

Market investment unit price analysis(reference date (i))
Market investment unit price analysis(reference date (ii))
Comparable similar investment corporation
analysis12.52 – 2.81

1

2.47 – 2.82

1

2.54 – 3.17

DDM Analysis

12.32 – 2.83

Concerning the market investment unit price analysis, the financial analysis date is set as May 25, 2016(“reference Date (i)”), the date on which the report of merger ratio analysis was prepared, and May 18,
2016 (“reference Date (ii)”), which falls on the last trading date prior to the date on which a media reporton the Merger based on speculation was made, and the closing price on each reference date, and theaverages of closing prices for the one-month, three-month and six-month periods up to each reference datewere employed. Please refer to (Note 2) at the end of this press release for more detailed information
regarding the assumptions and disclaimers for the analysis of Daiwa Securities.
In the future profit plan of TOP and NMF which Daiwa Securities referred to as the basis for the DDM
Analysis, there is no fiscal period in which a considerable increase or decrease in profits is expected.

6

(2)

Factual Background to the Determination
After comprehensively taking into account the financial results, status of assets and liabilities, future prospectsof the business, synergies to be created by the Merger and the results of the financial analysis
conducted by the financial advisors for NMF and TOP and discussing and negotiating meticulously, NMF
and TOP executed the Merger Agreement, as they determined the above mentioned merger ratio to beappropriate.

(3)

Relationship with the Financial Advisors
Neither Nomura Securities nor Daiwa Securities falls under the definition of an “Affiliated Party” of NMF or
TOP as set forth in Article 67, Paragraph 4 of the Ordinance Regarding Calculation of the Investment
Corporation (Cabinet Ordinance No. 47 of 2006, as amended) and has no significant interest to note inconnection with the Merger.

(4)

Prospect of Delisting and Reasons Thereof
As outlined in 2. (2) above, it is expected that TOP will dissolve and the investment units issued by TOP will
be delisted on August 29, 2016, which is three business days prior to the effective date of the Merger, in
accordance with the Criteria for Delisting set forth by TSE. Upon the Merger, the unitholders of TOP willbe allotted new NMF investment units in proportion to the number of investment units they hold andthereby own NMF investment units, and NMF investment units are already listed on the TSE and willcontinue to be tradable on the TSE.

(5)

Measures to Secure Fairness(i) Measures to Secure Fairness in the Course of Considering Pros and Cons of Merger and Merger Ratio
Neither NMF nor TOP holds any investment units of the other party and there are no capital ties between
them. In addition, there is no special capital relationship among Nomura Real Estate Asset Management
Co., Ltd, (“NREAM”) which is the asset management company for NMF, Top REIT Asset Management Co.,
Ltd., (“TRAM”) which is the asset management company for TOP, and their shareholders, and they have no
mutual material interest. Accordingly, NMF and TOP have, on an arm’s length basis, agreed upon theexecution of the Merger Agreement including the merger ratio after discussions and negotiations, as set
forth in (2) above.
In addition, NMF and TOP have, respectively, in the course of considering the Merger, timely reported thestatus of the consideration to the board of directors of each investment corporation, which is constituted by
one executive director and two supervisory directors, whose independence from an asset managementcompany has been ensured under the Investment Trust Act. Further, important matters to be considered aredeliberated and approved by the board of directors of each investment corporation.
Furthermore, NMF has appointed Nagashima Ohno & Tsunematsu and TOP has appointed Mori Hamada &Matsumoto, as a legal advisor for the Merger, and NMF and TOP have respectively received advice onmatters including the procedures for the Merger, the method and procedures for making decisions.
(ii) Measures to Secure Fairness in Determination of Merger Ratio
As described in items (1) through (3) above, NMF and TOP requested their respective financial advisors to
conduct a financial analysis regarding the merger ratio. In determining the appropriate merger ratio, NMF andTOP considered various factors including the financial analyses conducted by their respective financial
advisors.
In order to ensure the fairness of the Merger, NMF has retained Nomura Securities, which is an independent
third party financial advisor, for its unitholders, and obtained a report of merger ratio analysis, in whichanalyses of allotment of units in the Merger were conducted from a financial viewpoint under certain
assumptions. Given the above, the board of directors of NMF has determined that measures for ensuring thefairness of the Merger were adequately implemented.
In order to ensure the fairness of the Merger, TOP has retained Daiwa Securities, which is an independent third
party financial advisor, for its unitholders, and obtained a report of merger ratio analysis, in which analyses ofallotment of units in the Merger were conducted from a financial viewpoint under certain assumptions. Given
the above, the board of directors of TOP has determined that measures for ensuring the fairness of the Merger
were adequately implemented.

7

It should be noted that neither of NMF nor TOP obtained a fairness opinion from the relevant financial advisor
to the effect that the merger ratio is financially suitable for each unitholder of each investment corporation.

4.

Overview of Parties Involved in the Merger
Absorbed Corporation

Surviving Corporation(1) Name

Nomura Real Estate Master Fund, Inc.

Top REIT, Inc.

(2) Location

1-3-7 Yaesu, Chuo-ku, Tokyo(3) Name of Executive Director

8-5-1 Nishi-Shinjuku, Shinjuku-ku,
Tokyo
Satoshi Yanagita(4) Unitholders’ Capital

161,120 million yen

91,143 million yen(5) Date of Incorporation

October 1, 2015

November 2, 2005

(6) Total Number of Investment Units
Issued and Outstanding

3,722,010 units

176,000 units(7) End of Fiscal Periods

February and August

April and October(8) Main Assets under Management

Real estate, and real estate trust
beneficiary interest

Real estate, and real estate trust
beneficiary interest(9) Main Financing Banks

The Bank of Tokyo-Mitsubishi UFJ,
Ltd.
Sumitomo Mitsui Banking
Corporation
Mitsubishi UFJ Trust and Banking
Corporation
Mizuho Bank, Ltd.
Development Bank of Japan Inc.
Sumitomo Mitsui Trust Bank, Ltd.

Sumitomo Mitsui Trust Bank, Ltd.
Mizuho Bank, Ltd.
Sumitomo Mitsui Banking
Corporation
The Bank of Tokyo-Mitsubishi UFJ,Ltd.
Mitsubishi UFJ Trust and Banking
Corporation(10) Major Unitholders and their
Unitholdings ratios

Japan Trustee Services
Bank, Ltd. (trust account)

25.60%

Japan Trustee Services
Bank, Ltd. (trust account)

21.08%The Master Trust Bank ofJapan, Ltd. (trust account)

7.18%

The Master Trust Bank ofJapan, Ltd. (trust account)

8.24%

Trust & Custody Services
Bank, Ltd.
(securities investment
trust account)

7.14%

Trust & Custody Services
Bank, Ltd.
(securities investment
trust account)

3.98%

Nomura Real Estate
Development Co., Ltd.

5.66%

The Nomura Trust andBanking Co., Ltd.
(investment trust account)

2.78%

The Nomura Trust andBanking Co., Ltd.
(investment trust account)

3.42%

Sumitomo Mitsui Trust
Bank, Ltd.

1.80%

Junichi Sahara(11) Name of Asset Management
Company

Nomura Real Estate AssetManagement Co., Ltd.

Top REIT Asset Management Co.,
Ltd.

(12) Location of Asset Management
Company

8-5-1 Nishi-Shinjuku, Shinjuku-ku,
Tokyo

1-3-7 Yaesu, Chuo-ku, Tokyo(13) Name and Post of Representative of Norio Ambe
Asset Management Company
President & Chief Executive Officer(14) Relationship Among Parties Involved

8

Tatsuya Chiba
President and Representative Director

Capital Ties

There is no capital tie requiring special mention among the parties involved in
the Merger and their asset management companies.

Personnel Ties

There is no personnel tie requiring special mention among the parties involved in
the Merger and their asset management companies.

Business Ties

There is no business tie requiring special mention among the parties involved in
the Merger and their asset management companies.

Status of Classification as
Affiliated Party

Neither of the parties involved in the Merger nor their asset managementcompanies fall under affiliated parties.

(15) Finance Results in Most Recent Three Fiscal Periods(i) NMF (Unit: million yen, unless otherwise stated)
Fiscal Period Ended--

Operating Revenue--

24,313Operating Income
Ordinary Income

-

-

6,483

-

-

4,050

Net Income

-

-

4,048

Net Income per Unit (yen)

-

-

1,087

Dividend per Unit (yen)

-

-

2,219

Net Assets per Unit (yen)--128,318

Net Assets--

477,601

Total Assets--

928,297

February 2016

(Note) As the date of incorporation of NMF is October 1, 2015 and its first fiscal period is the fiscal period ended
February 29, 2016, there are no descriptions regarding the finance results during fiscal periods prior to thefiscal period ended February 29, 2016. In addition, the fiscal period ended February 29, 2016 covers a periodof 152 days, which commenced from October 1, 2015 and ended on February 29, 2016.
(ii) TOP (Unit: million yen, unless otherwise stated)
Fiscal Period Ended

5.

October 2014

April 2015

October 2015

Operating Revenue

5,792

Operating Income
Ordinary Income

2,563

2,472

2,210

1,955

1,891

1,654

5,612

Net Income

1,954

1,831

1,674

Net Income per Unit (yen)11,107

10,408

9,513

Dividend per Unit (yen)11,107

9,680

9,761

Net Assets per Unit (yen)529,095

528,400

528,278

Net Assets

93,12092,99892,976

Total Assets

200,551

189,737

189,568

Post-Merger Status

(1)

5,368

Status of Surviving Corporation
Surviving Corporation

(1)

Name

(2)
(3)
(4)
(5)

Location
Name of Executive Director
Unitholders’ CapitalEnd of Fiscal Periods

Nomura Real Estate Master Fund, Inc.
8-5-1 Nishi-Shinjuku, Shinjuku-ku, Tokyo
Satoshi Yanagita
TBD (yet to be determined at this stage)
February and August(6)

Net Assets

TBD (yet to be determined at this stage)

9

(7)

Total Assets(8)

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

(9)

Location of Asset Management
Company
Name and Post of Representative ofAsset Management Company

(10)

(2)

TBD (yet to be determined at this stage)

8-5-1 Nishi-Shinjuku, Shinjuku-ku, Tokyo
President & Chief Executive Officer, Norio Ambe

Major Unitholders and their Unitholding Ratios Before and After Merger
Before Merger

NMF (as of February 29, 2016)
Japan Trustee Services Bank, Ltd. (trust
account)
The Master Trust Bank of Japan, Ltd. (trust
account)
Trust & Custody Services Bank, Ltd.
(securities investment trust account)
Nomura Real Estate Development Co., Ltd.
The Nomura Trust and Banking Co., Ltd.
(investment trust account)
STATE STREET BANK WEST CLIENT TREATY 505234
STATE STREET BANK - WESTPENSION FUND CLIENTS - EXEMPT
505233
THE BANK OF NEW YORK, NON –TREATY JASDEC ACCOUNTSIX SIS FOR SWISS NATIONAL BANKNOMURA BANK (LUXEMBOURG) S. A.

25.60%
7.18%
7.14%
5.66%

TOP (as of April 30, 2016)
Japan Trustee Services Bank, Ltd. (trust
account)
The Master Trust Bank of Japan, Ltd. (trust
account)
Trust & Custody Services Bank, Ltd.
(securities investment trust account)
The Nomura Trust and Banking Co., Ltd.
(investment trust account)

3.42% Sumitomo Mitsui Trust Bank, Limited
2.53%

NIPPON STEEL KOWA REAL ESTATE
CO., LTD.

1.65% OJI REAL ESTATE CO., LTD.
STATE STREET BANK AND TRUSTCOMPANY 505223
STATE STREET BANK - WEST PENSION
1.03%
FUND CLIENTS - EXEMPT 505233
The Asahi Fire And Marine Insurance
0.94%
Company, Limited

1.24%

21.08%
8.24%
3.98%
2.78%
1.80%
1.80%
1.80%
1.52%
1.29%
1.14%

After Merger(simple sum after taking into account the merger ratio)
Japan Trustee Services Bank, Ltd. (trust account)

25.10%The Master Trust Bank of Japan, Ltd. (trust account)

7.29%

Trust & Custody Services Bank, Ltd. (securities investment trust
account)

6.79%

Nomura Real Estate Development Co., Ltd.

5.04%

The Nomura Trust and Banking Co., Ltd. (investment trust
account)
STATE STREET BANK WEST CLIENT - TREATY 505234

3.35%
2.42%

STATE STREET BANK - WEST PENSION FUND CLIENTS EXEMPT 505233

1.61%

THE BANK OF NEW YORK, NON – TREATY JASDECACCOUNT

1.10%

SIX SIS FOR SWISS NATIONAL BANK

0.93%

NOMURA BANK (LUXEMBOURG) S. A.

0.93%(Note)The major unitholders and their unitholding ratios after t h e Merger are calculated based on the number ofinvestment units assuming that the investment units of NMF will be allotted in accordance with “2. Outline of the
Merger; (3) Ratio of Allotment under the Merger” above on the premise of the major unitholders’ unitholding ratios

10before the Merger above.

(3)

Asset Management Agreement
After the Merger, NMF is to keep effective the asset management agreement with NREAM to which NMF
currently entrusts its asset management, and continue to entrust the business concerning the management of
the assets. For the avoidance of doubt, the relevant asset management agreement is not scheduled to beamended. In addition, TOP is scheduled to terminate the asset management agreement with TRAM on theeffective date of the Merger on the condition that the Merger becomes effective, upon obtaining approval of
the general meeting of unitholders of TOP.

(4) Investment Policy
The investment policy of NMF, which is the surviving corporation, is not scheduled to be amended from that
described in “(Reference) SUMMARY OF FINANCIAL RESULTS (REIT) For the 1st Fiscal Period Ended
February 29, 2016” as of April 14, 2016.
(5) Agreement with Sponsors, Etc.
The agreement entered into by and between NMF and its sponsors etc. as of the date of this press release is
not scheduled to be amended.
The agreement for provision of information on real estate entered into by and between TOP and Oji, theagreement for provision of information about brokerage properties entered into by and between TOP and SMTB,
and the agreement for provision of warehousing function entered into by and among TOP and the both above
companies are scheduled to be terminated in connection to the Merger.
In addition, the asset custody agreement and each general administration agreement entered into by andbetween TOP and SMTB are scheduled to be terminated in connection to the Merger.
Meanwhile, today, NREAM and SMTB have entered into a memorandum of understanding concerning
leasing support etc., which will become effective as of the effective date of the Merger, on the condition
precedent that the Merger becomes effective. Pursuant to the memorandum of understanding, SMTB shallcontinue to cooperate on the new leasing of the properties. Further, concerning Akasaka Oji Building, Ginza Oji
Building and Sagamihara Shopping Center, after the Merger, Oji is expected to continue its property
management service.

6.

Overview of Accounting
The Merger constitutes an acquisition as provided in the Accounting Standard for Business Combinations(Accounting Standards Board of Japan Statement No. 21; revised on September 13, 2013) and is premised on
the purchase method being applied, whereby NMF is the corporation acquiring, and TOP is the corporation to
be acquired. Furthermore, positive goodwill is expected to result from the Merger, and the amount isprovisionally estimated to be JPY 23,460 million at this stage.
In addition, positive goodwill will be recorded as assets and be regularly amortized using the straight-line
method for twenty years. The amortization costs will vary for accounting and tax treatment (account and tax
discrepancy) and will be a cause for the imposition of taxation such as corporation tax; however, NMF will
avoid such taxation through the distribution of cash in excess of net income for the purpose of tax reduction
throughout the amortization period of positive goodwill.

7.

Future Outlook
For the forecasts of the management performance after the Merger, please refer to the press release of today, “Noticeconcerning Forecasts of Financial Results for the Fiscal Period Ending February 28, 2017 following the Merger
between Nomura Real Estate Master Fund, Inc., and Top REIT, Inc.”
The impact of the execution of the Merger Agreement on the finance results for NMF’s fiscal period ending
August 2016 (from March 1, 2016 to August 31, 2016) is expected to be minimal. Thus, no changes havebeen made to such finance results forecasts.

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The impact of the execution of the Merger Agreement on the finance results for TOP’s fiscal period ended April
2016 (from November 1, 2015 to April 30, 2016) and fiscal period ending October 2016 (from May 1, 2016 to
October 31, 2016) is expected to be minimal. In addition, as described in “Notice concerning Disposition of Trust
Beneficiary Interest in Real Estate in Japan ( Kojima×Bic Camera Kashiwa Store)” separately announced by TOP asof today, the trust beneficiary interests in Kojima×Bic Camera Kashiwa Store that TOP owns has been decided
today to be sold, and with respect to the impact of the execution of the such sale on the finance results for TOP,
please refer to the above mentioned press release.
The forecasts for finance results for TOP’s final fiscal period and the cash distribution on merger, when the
Merger is approved by the general meeting of unitholders of TOP, is not known at this stage, and will beannounced upon determination.

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(Note 1)
Nomura Securities has generally used the information provided by NMF and TOP and the publicly available information, in order
to conduct the merger ratio analysis. Nomura Securities has not conducted any independent verification on the accuracy orcompleteness of the materials and information, but rather has assumed that all such materials and information are accurate andcomplete. In addition, Nomura Securities has not made any independent valuation, appraisal or assessment of the assets or
liabilities (including the off-balance-sheet assets and liabilities, or any other contingent liabilities) of NMF and TOP. Nomura
Securities has not appointed any third-party institution for any such valuation, appraisal or assessment. Further, Nomura Securities
has assumed that the financial projections (including profit plan and other information) provided by NMF and TOP have been
prepared in a reasonable manner on the basis of the best estimates and judgment currently available by the management of NMF
and TOP.
(Note 2)In analyzing the merger ratio, Daiwa Securities has assumed that all of the information under analysis and consideration (including,but not limited to, the information provided by TOP and NMF and the publicly available information) was accurate and complete,and shall not bear the obligation to verify the accuracy or completeness of such information. In analyzing the merger ratio, Daiwa
Securities did not make any independent valuation, appraisal or assessment of all of the assets or liabilities (including, but notlimited to, derivative financial instruments, off-balance-sheet assets or liabilities, or any other contingent liabilities) of TOP and
NMF, including analysis and valuation of their individual assets and liabilities, nor shall Daiwa Securities bear the obligation torequest a third-party institution for any such valuation, appraisal or assessment. In analyzing the merger ratio, Daiwa Securities has
assumed that the financial forecasts provided by TOP and NMF have been prepared on the reasonable premises on the basis of thebest currently available estimates and judgments of the respective managements of TOP and NMF, and shall not bear the obligation
to verify the accuracy and viability of the relevant financial forecasts.

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