NEWS RELEASE
Dec 27, 2018

R&I Affirms A+, Stable: Nomura Real Estate Master Fund, Inc.
Rating and Investment Information, Inc. (R&I) has announced the following:
ISSUER:

Nomura Real Estate Master Fund, Inc.
Issuer Rating: A+, Affirmed
Rating Outlook: Stable

RATIONALE:
Nomura Real Estate Master Fund, Inc. (NMF) is Japan's largest diversified REIT that was establishedin October 2015 through the merger of three REITs operated by the Nomura Real Estate group. With afocus on the greater Tokyo area, NMF invests in various types of properties in a well-balanced manner.
Nomura Real Estate Holdings, Inc. serves as the sponsor of NMF.
NMF worked to improve the quality of its portfolio by conducting asset replacement worth
approximately 100 billion yen for the first two years or so after the merger. In March 2018, it implemented
a public offering for the first time since the merger and acquired new properties totaling 33.4 billion yen,which are mostly relatively new properties in the greater Tokyo area developed by the sponsor. The
average building age of the portfolio of 18.8 years (as of August 2018; the same applies hereinafter) is
expected to remain unchanged or be younger, given that NMF intends to acquire assets continuously
from the sponsor's stock of commercial properties.
NMF boasts an asset size of more than 950 billion yen, which is the third largest in the J-REIT
industry. The breakdown by geographic location and property type shows that properties in the greater
Tokyo area account for 82.1% of the portfolio, and that office buildings 45.5%, retail facilities 16.7%,
logistics facilities 16.8% and residential facilities 20.1%, respectively. The fact that the top ten properties
represent only 24.5% of its total assets suggests that the portfolio is highly diversified.
The performance of NMF's properties is sound on the whole. The occupancy rate of the portfolio has
been in the 99% range, and the rate of rent increases has been rising, especially at office buildings. The
REIT has also achieved relatively large rent increases from some retail facilities in station areas throughtenant turnover. Earnings from properties in other sectors, such as residential and logistic facilities, arebroadly stable.
The LTV ratio (calculated after excluding goodwill from total assets) was 48.4%. With the appraisal
value exceeding the book value by 9.9%, a certain level of unrealized gains is ensured.
NMF enjoys favorable funding conditions. With stable funding sources consisting primarily of majordomestic financial institutions, the average remaining term to maturity of debts is as long as 4.6 years anddue dates are staggered. Given an available committed line of credit totaling 50 billion yen, together withcash and deposits, it ensures sufficient liquidity.
The Rating Outlook is Stable. NMF has established a well-diversified portfolio mainly in the greater
Tokyo area. Earnings from office buildings are growing steadily and those from properties in other sectors
are solid as well. The funding base consisting primarily of long-term, fixed interest rate loans is robust. To
further improve the evaluation of the creditworthiness, management with an even lower LTV ratio would
be required.
The primary rating methodology applied to this rating is provided at "Rating Methodology for J-REIT".
The methodology is available at the web site listed below, together with other rating methodologies thatare taken into consideration when assigning the rating.
https://www.r-i.co.jp/en/rating/about/rating_method.html■Contact: Sales and Marketing Division, Customer Service Dept.
■Media Contact : Corporate Planning Division (Public Relations)Rating and Investment Information, Inc.

TEL.+81-(0)3-6273-7471 E-mail. infodept@r-i.co.jp
TEL.+81-(0)3-6273-7273

TERRACE SQUARE, 3-22 Kanda Nishikicho, Chiyoda-ku, Tokyo 101-0054, Japan https://www.r-i.co.jp

Credit ratings are R&I's opinions on an issuer's general capacity to fulfill its financial obligations and the certainty of the fulfillment of its individual obligations as promised (creditworthiness) and are notstatements of fact. Further, R&I does not state its opinions about any risks other than credit risk, give advice regarding investment decisions or financial matters, or endorse the merits of any investment.
R&I does not undertake any independent verification of the accuracy or other aspects of the related information when issuing a credit rating and makes no related representations or warranties. R&I is notliable in any way for any damage arising in relation to credit ratings (including amendment or withdrawal thereof). As a general rule, R&I issues a credit rating for a fee paid by the issuer. For details,
please refer to https://www.r-i.co.jp/en/docs/policy/site.html.
© Rating and Investment Information, Inc.

NEWS RELEASE
R&I RATINGS:ISSUER:RATING:

Nomura Real Estate Master Fund, Inc. (Sec. Code: 3462)
Issuer Rating
A+, Affirmed

RATING OUTLOOK:

StableUnsec. Str. Bonds No.2

Issue Date

Maturity Date

Issue Amount (mn)

Mar 16, 2005

Mar 16, 2020

JPY 5,000

RATING:

A+, Affirmed

Unsec. Str. Bonds No.7

Issue Date

Maturity Date

Issue Amount (mn)

Mar 19, 2007

Mar 17, 2028

JPY 4,500

RATING:

A+, Affirmed

Unsec. Str. Bonds No.10

Issue Date

Maturity Date

Issue Amount (mn)Nov 25, 2014

Nov 25, 2024

JPY 6,000

RATING:

A+, Affirmed■Contact: Sales and Marketing Division, Customer Service Dept.
■Media Contact : Corporate Planning Division (Public Relations)Rating and Investment Information, Inc.

TEL.+81-(0)3-6273-7471 E-mail. infodept@r-i.co.jp
TEL.+81-(0)3-6273-7273

TERRACE SQUARE, 3-22 Kanda Nishikicho, Chiyoda-ku, Tokyo 101-0054, Japan https://www.r-i.co.jp

Credit ratings are R&I's opinions on an issuer's general capacity to fulfill its financial obligations and the certainty of the fulfillment of its individual obligations as promised (creditworthiness) and are notstatements of fact. Further, R&I does not state its opinions about any risks other than credit risk, give advice regarding investment decisions or financial matters, or endorse the merits of any investment.
R&I does not undertake any independent verification of the accuracy or other aspects of the related information when issuing a credit rating and makes no related representations or warranties. R&I is notliable in any way for any damage arising in relation to credit ratings (including amendment or withdrawal thereof). As a general rule, R&I issues a credit rating for a fee paid by the issuer. For details,
please refer to https://www.r-i.co.jp/en/docs/policy/site.html.
© Rating and Investment Information, Inc.