NOMURA

October 16, 2014

MASTE R
FUND

3 rd

Analyst Meeting Presentation Material

Contents
1. Recent Acquired Property

・Overview of Newly Acquired Property

5. APPENDIX
2～3

2. Investment Highlights

・Investment Highlights
・3rd Fiscal Period Financial Overview

6～7
8

3. 3rd Fiscal Period Overview

・Effect of Consumption Tax Rate Hike
・Completion of Renewal of Morisia Tsudanuma
・Approach to Photovoltaic Power Generation
・Management Status of Portfolio
・Timing of Tenant Rent Renewals
・Appraisal Value Status (3rd Fiscal Period)
・Financial Status

10
11
12
13
14
15
16

4. Investment Management Strategy

・Road Map of Growth Strategy
・Main Property Development Status of the Sponsor
・Future Distribution Level

18
19～21

・Income Statement
・Balance Sheet・Cash Flow Statement
・Forecasts for the 4th and 5th Fiscal Period
・External Growth Strategy
・Overview of Equity Interest in Silent Partnership
・Portfolio Data
・Portfolio List
・List of End-of Period Appraisal Value・Portfolio Map
・Unitholders (at end of 3rd Fiscal Period)
・Tenant Status (at end of 3rd Fiscal Period)
・Changes in Financial Performance・Analyst Coverage, Inclusion to the Index
・Logistics Facilities Environment
・Retail Facilities Environment
・Overview of Nomura Master Fund
・Overview of the Asset Management Company

24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41

22

October 16, 2014

Recent Acquired Property

1Overview of Newly Acquired Property (1)Universal CityWalk OsakaTM

MAP

TM

Ⓡ

Overview
Completion

June, 2001

Location

Konohana-ku, Osaka-shi, Osaka

Acquisition Date

September 30, 2014

Contract Date

August 8, 2014

Acquisition Price¥15,500 million(Appraisal Value: ¥16,500 million)

NOI Yield

5.9% (Based on appraisal value)
TM & © Universal Studios.

All rights reserved. CR14-3504

2

Overview of Newly Acquired Property (2)Appeal of the Property

Appeal of the Location
The property is located in a major resort area that encompasses Universal
Studios Japan Ⓡ, the property and 4 official hotels.

The property is the only authorized commercial facility adjacent to Universal
Studios Japan Ⓡ.

The Wizarding World of Harry PotterTM was opened in July 2014 as a new area
in Universal Studios Japan Ⓡ

Expects stable flow of guests andfurther enhance its capacity to attract guests

Located in a colorful townscape presenting a taste of Hollywood, the property iscomprised of a wide variety of tenants with high entertainment quality.

Provides topicality and strong appeal to the users of the facility

Future Management Policy
Promote tenant
replacements

The keywords are “affinity with Universal Studios Japan Ⓡ,” “thematic character” and “entertainment quality”

Increase ofsales-linked rents“Further enhance collaboration with Universal Studios Japan Ⓡ” and “increase sales through co-promotion and implementation of
events, etc.”

Transition of visitors and sales“The Wizarding World of Harry PotterTM”
Opened July 15, 2014

(million)

12.0

8

Universal Studios JapanⓇ visitors(million)

10.0(¥ billion)

TM

Universal CityWalkTM sales(¥ billion)

Universal CityWalk customers(million)

7
6

8.0

5

6.0

4
3

4.0

2
2.0

1

0.0

0
FY2001

FY2002

FY2003

FY2004

FY2005

FY2006

FY2007

FY2008FY2009(Note)“Number of guests to Universal Studios JapanⓇ” is based on disclosure materials of USJ Co., Ltd. from fiscal 2001 to fiscal 2008 and onpress materials, etc. from fiscal 2009 onwards, and is prepared by Nomura Real Estate Asset Management Co., Ltd.

FY2010FY2011FY2012FY2013・・・™ & © Warner Bros. Entertainment Inc. Harry Potter Publishing Rights © JKR.
(s14)
® Universal Studios. CR14-3504

3

Investment Highlights

5Investment Highlights
Highlights for 3rd Fiscal Period

Dividend per Unit 2,450 yen (Forecast 2,400 yen)Concluded PSA of Universal CityWalk OsakaTM (August 8, 2014, Acquired on September 30, 2014)
Completed Leasing of EQUINIA Shinjuku (Contracted on August 29, 2014, Rent Started on October 1)

Investment Strategy
 Concluded Investment of Equity Interest in
Silent Partnership of Ryoke Capital G.K.

 Acquisition of Universal CityWalk OsakaTM
Acquisition Price： ¥15,500 mln

Investment Amount：

Leasable Floor Space： 42,840.91 m2

Leasable Floor Space ： 9,733.24 m2

Age (As of Aug. 31, 2014)：

Age (As of Aug. 31, 2014)¥500 mln

10.9 years：

13.2 years

 Portfolio Status

end of 2nd FP end of 3rd FP

end of 2nd FP end of 3rd FP

Number of Properties

：

55

55

Average Building Age： 13.3 years

13.8 years

Asset Size

： ¥238.0 bln¥238.0 bln

Average Lease Term

： 12.4 years

12.7 years

Portfolio NOI Yield

：

5.9 %

Ratio of Tokyo Area

：

6.6 %

84.6 %

84.6 %

6

Investment Highlights (2)Financial Strategy

Management Strategy
 Generation of stable cash flow backed by long lease periods

 Refinanced ¥16.5 bln of ST Loan, repaid partially
Repaid ¥4 bln with cash on hand
Ratio of contracts of
10 years or more:

2nd FP

3rd FP

70.9%

71.4%

⇒ Enhancement of cash efficiency
Refinanced ¥12.5 bln⇒ Promotion of long term fixed interest rate

 Maintenance of high occupancy rate through management skills backed by
the management experience of the Asset Management Company[Period-end Occupancy Rate]
2nd FP
Total： 99.8 %[Period-end Average Rent]

3rd FP

2nd FP

3rd FP

99.9 % ¥5,308/tsubo ¥5,296/tsubo

Logistics ： 100.0 %100.0 %

¥3,707/tsubo¥3,707/tsubo： 99.4 %99.6 %¥8,737/tsubo¥8,693/tsubo

Retail Diversification of repayment dates

Average Duration:

3rd FP

4.4 years

5.1 years

 Financial management that takes stability into
consideration

LTV: Increase of appraisal value

2nd FP

2nd FP

3rd FP

32.3%

31.3％

 Low level of Average Interest Rate

End of 2nd FP

End of 3rd FP

Average

2nd FP

3rd FP

Total Appraisal Value ：¥252.8 bln¥257.1 bln

Interest Rate:

0.98%

1.12%

Total Book Value：¥239.0 bln¥238.2 bln

Unrealized Gain：

+ ¥13.7 bln+ ¥18.9 bln

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

7

3rd Fiscal Period Financial Overview
Performance of the 3rd fiscal period and previous forecast
3rd Period(ended August. 31, 2014)

Operating Revenues¥9,468 million

3rd Period Forecasts(announced on Apr. 15, 2014)¥9,294 million

Decrease / Increase(comparison)+\174million

Major Difference

1.9%<Difference in NOI>
Morisia Tsudanmua Shortening of Downtime,¥7,127 million¥7,015 million+\112million

Rental Profit¥5,591 million¥5,485 million+\105million

1.9%

Operating Profits¥4,638 million¥4,564 million+\74million

1.6%

Ordinary Income¥4,081 million¥3,999 million+\82million

2.1%

NOI

1.6%

Penalty Charges
LP Hachioji Subsidy(+\89 mln)

Utility Charge(-\40 mln)(+\53 mln)

<Difference in Operating Profits>
Increase in Other Fees(-\35 mln)

<Difference in Net Income>Net Income¥4,079 million

Cash Distribution
per Unit¥2,450 /unit

Total Assets¥257,040 million

Interest-Bearing Debt

¥80,393 million

LTV

31.3 %¥3,998 million¥2,400 /unit+\82million+\50million

2.0%

2.1%

Reduction in Interest, Loan Arrangement
Fees(+\5 mln)

8

3rd Fiscal Period Overview

9Asset Management: Completion of Renewal of Morisia Tsudanuma
Increased sales and profitability of the entire facility through renovations with
“Kanade-no-Mori” development plan in mind
Effect of renewal～ Grand opened June 28, 2014 ～Investment Amount:¥210 million

Before Renewal

After Renewal(Initial estimate) (Note 1)

After Renewal(Result outlook) (Note 2)

Number of Customers(10 thousands / year)

1,097

Approx. 1,105 ( +8)

Approx. 1,105 ( +8)

Average Sales per
Customer (¥)

842

Approx. 878 ( +36)

Approx. 878 ( +36)

Sales (¥ mln / year)

9,246

Approx. 9,700 ( +460)

Approx. 9,700 ( +460)

Rent (¥ mln / year)916

Approx. 970 ( +50)

Approx. 971 ( +51)

Overview of renewal(West Corridor, 1F)(West Deck, 2F)(Note 1) Number of Customers, Average Sales per Customer, and Sales are based on estimate by Geo Akamatsu.
Rent is based on hearing to the tenants.

(Promotion Event)(Tsudanuma Walker)(Note 2) Based on Sales and Rent of July and August, after the renewal.

11Approach to Photovoltaic Power Generation
 Started roof rental of 5 properties of Landport from October 1, 2014, completed installation ofphotovoltaic power generation
Annual rental income¥18,240 thousand
Benefit Stable Income

Structure
Power Generation Company(TEPCO)Electricity sale

Revenue from salesof electric power

Photovoltaic Power Generation Company
Landport Urayasu(Yokohama Business Park Heating andCooling Supply)

Roof rental

Rental income

Target properties

Landport
Urayasu

Landport
KawagoeLandport
Atsugi

Landport
Hachioji

Landport
Kasukabe

Nomura Master Fund

12

Management Status of Portfolio
Tenant diversification (based on leased floor space)
Mitsui-Soko Logistics
Undisclosed

Total number of tenants

243 tenants

Total leased floor space

896,217.18㎡

ASKUL
Fukuyama Transporting
Otsuka Warehouse

Area
ratio

10.3%

7.8%

6.3%

5.6%

4.9%

Izumiya

4.7% 4.6% 4.2% 3.9% 3.9%

43.8%

Yokohama Okadaya
Shinkai Transport Systems

Neovia Logistics Services

Other

Amazon Japan Logistics

Diversification of lease maturity (based on rent)
福山通運
キャタピラー・ロジスティクス・サービセス

イズミヤ
横浜岡田屋

アマゾンジャパン・ロジスティクス
三井倉庫ロジスティクス

15.0%

0.1%

10.0%

Retail

1.1%
1.2%

5.0%

3.2%

10.3%

0.9%
4.6%
2.0%
0.0%

4.7%

4.2%
1.2%

2.3%

0.6%

1.8%

Logistics

10.2%
3.9%

3.5%
1.6%

6.7%

4.2%

2.2%

4.7%

0.3%

2.0%

0.4%

0.2%

0.3%

0.2%
1.1%

1.5%

FP4
FP5
FP6
FP7
FP8
FP9
FP10
FP11
FP12
FP13
FP14
FP15
FP16
FP17
FP18
FP19
FP20
FP21
FP22
FP23
2015/2 2015/8 2016/2 2016/8 2017/2 2017/8 2018/2 2018/8 2019/2 2019/8 2020/2 2020/8 2021/2 2021/8 2022/2 2022/8 2023/2 2023/8 2024/2 2024/8

13

Timing of Tenant Rent Renewals
Property Name

Tenant Name

Lease
Term

FP4

FP5

FP6

FP7

FP8

FP9

FP10

FP11

FP12

FP13

Feb. 2015

Aug. 2015

Feb. 2016

Aug. 2016

Feb. 2017

Aug. 2017

Feb. 2018

Aug. 2018

Feb. 2019

Aug. 2019

Logistics
Fukuyama Transporting

Fixed

Otsuka Warehouse 1

Fixed

Otsuka Warehouse 2

Fixed

Landport Kawagoe

KEIAI

Fixed

Sagamihara Tana Logistics Center

Neovia Logistics Services

Fixed

Sagamihara Onodai Logistics Center

Fukuyama Transporting

NormalHanyu Logistics Center

Nippon Express

Fixed

Ota Nitta Ligistics Center

Mitsui-Soko Logistics

NormalOta Higashishinmachi Logistics Center

VantecNormalLandport Urayasu

Ota Kiyohara Logistics Center Ota International Cargo Terminal

NormalRetailYamada Denki

Fixed

Aeon Retail

Fixed

Nitori Makuhari

Nitori

NormalKonami Sports Club Fuchu

Konami Sports & Life

NormalFESTA SQUARE

Yaoko

Fixed

Sundai Azamino

Sundai Education Promotion

Fixed

MegalosKanagawa

Megalos

NormalMerad Owada (Retail)Kansai Super Market

NormalMerad Owada (Logistics)

Kansai Super Market

NormalNot disclosed

Fixed

Not disclosed

Fixed

Morisia Tsudanuma

Land Only 4 properties(Shibuya, Setagaya,
Suginami, Ibaraki)
Land Only(Other than above)(Note) Extracted the tenants that the rent renewal becomes due by FP13 (Aug. 2019) and leasing area that is higher than a constant scale

14

Appraisal Value Status (3rd Fiscal Period End)
Status as of the end of 3rd FP
Total appraisal value¥257.1 billion

Total book value¥238.2 billion

Appraisal value¥252.8 billion¥257.1 billion

1.7%

Unrealized gain / loss

+ ¥18.9 billion

Logistics¥129.9 billion¥132.8 billion

2.3%<Reference>
Unrealized gain/loss per unit:

+ ¥ 11,358

Retail(excluding land)¥107.0 billion¥108.3 billion

1.3%

Net asset per unit:

¥ 99,204

NAV per unit:

¥ 110,563

Retail(land)¥15.8 billion¥15.8 billion

0.2%

End of 2nd period End of 3rd period Comparison

Change in total appraisal value and cap rate
Logistics(¥ mln)Retail (excluding land)(¥ mln)133,000

5.80%+¥2,933 million

5.60%

131,000

110,000

5.80%

129,000

5.20%

127,000

5.00%

2nd period

Appraisal value
Increase
Unchanged
Decrease

16
20

3rd period▲0.08%

Decrease
Flat
Increase

5.80%
5.60%

16,000+¥32 million

5.40%+¥1,340 million

106,000

5.20%

104,000

5.00%

Appraisal value
13
5
0

18,0005.60%

108,000

2nd period

Cap rate

Retail (land)▲0.02%

5.40%▲0.11%(¥ mln)Increase
Unchanged
Decrease

16
3
1

14,000Decrease
Flat
Increase

5.20%

12,000

3rd period

5.00%

2nd period

1730Increase
Unchanged
Decrease

3rd period

Cap rate

Appraisal value

Cap rate

5.40%

9
7
1

Decrease
Flat
Increase5120(Note 1) Cap rates are the weighted average of the appraisal value by direct capitalization approach15

Financial Status
Interest-bearing liabilities

Bank formation(¥ bln)Financial institution

Total Interestbearing liabilities

Average interest rate
1.12 %¥80.3 billion

Ratio of long-term
debt

Ratio of fixed-rate
debt

99.9 %

98.8 %* Including fixed interest by IR swap

LTV

Average remaining
duration

The Bank of TokyoMitsubishi UFJ

16.5

Development Bank of Japan

6.8

Sumitomo Mitsui Banking
Corp.

16.5

Mizuho Trust & Banking Co.

5.8

Mizuho Bank

11.3

Resona Bank

1.0

Mitsubishi UFJ Trust andBanking Corp.

6.8

Nippon Life Insurance

1.0

Sumitomo Mitsui Trust Bank

6.8

The Bank of Fukuoka

1.0

The Norinchukin Bank

6.8

Total Debt

80.3

Diversification of repayment dates(loan-to-value)

5.1 years

31.3 %(¥ bln)
16
14

13.0

12.2

12

10.8

10.0

10

9.0

8
5.5

6

Credit ratings

4.0

4
2

4.0

5.0

4.0
0.9

1.0

0

Rating agency

LT issuer rating

OutlookJCR

AA -Stable4th
Period6th
Period8th
Period10th
Period12th
Period14th
Period16th
Period18th
Period20th
Period22th
Period24th
PeriodCommitment line
Commitment line agreement
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
Sumitomo Mitsui Banking Corporation¥10 billion

Mizuho Bank, Ltd.

(Commitment period: 1year)

16

Investment Management Strategy

17

Road Map of Growth Strategy
External Growth
Pipeline by Nomura Real Estate GroupAcquisition Rout from Out Side

Medium-term asset
size target:¥400 bln¥253.5 bln¥238.0 bln¥227.6 bln

Universal CityWalk OsakaTM

Around 5 years
Pipeline

Supposition after
acquisition (Note)

FP1

FP2

FP3 As of today

40%

Operational LTV level: 30%~40%

LTV
30%

31%

32%

31%

Aim to diversify real estate under management and tenants by expanding asset size,
and realize the building of an increasingly stable portfolio(Note) Based on an assumption that the acquisition of the North Tokyo Distribution Center (Trust Beneficiary Interest) was realized. NMF has notdetermined to acquire the Trust Beneficiary Interest, and NMF does not guarantee to acquire the Trust Beneficiary Interest as of today.

18

Main Property Development Status of the Sponsor (1)(Tentative name) Landport Kashiwa-Shonan

GEMS Ichigaya

Property Name

Location

Completion Total Floor
Date
Space

RetailGEMS Ichigaya

Rokubancho, ChiyodaWard

Oct. 2014

Logistics(Tentative Name)
Landport Kashiwa-Shonan

Kashiwa South-Central Land
readjustment project placeMar. 2016

Logistics(Tentative name)Landport Hachioji II

Ishikawa-cho, HachiojiCity

Sep. 2016

453
Tsubo
15,344Tsubo
10,987
Tsubo(Tentative name) Landport Hachioji II(Note) NMF is not scheduled to acquire the properties stated above as of today

19

Main Property Development Status of the Sponsor (2)<Property Characteristics>
・Within approx. 30km radius from central Tokyo・Approx. 6km from Iwatsuki IC on Tohoku
Expressway
・Delivery not only within Saitama Prefecture but toGreater Tokyo and also wide-ranging areas of allof East Japan are possible through use of majorroads such as the Tohoku Expressway andNational Route 16
・Located inside northern industrial park, a rare spotnear Iwatsuki IC
・LED lighting employed throughout the entire
building(Tentative name) Landport Iwatsuki

RetailRetailLogistics

Property Name

Location

Completion
Date(Tentative Name)GEMS Shiba-daimon(Tentative Name)GEMS Kanda

Shiba-daimon,
Minato-Ward

Feb. 2016

Kanda area

Jun. 2016(Tentative name)Landport Iwatsuki

Iwatsuki-Ward,
Saitama-City

Sep. 2016

Total Floor
Space
425
Tsubo
361
Tsubo
7,276
Tsubo

(Note) NMF is not scheduled to acquire the properties stated above as of today20

Main Property Development Status of the Sponsor (3)Landport Atsugi Kaneda

NRE Kichijoji Building
Property Name
Logistics NREG Kawasaki Logistics Center
Logistics Landport Atsugi Kaneda
Retail

NRE Kichijoji Building

Location

Completion Total Floor
Date
Space

Kawasaki-Ward,
Mar. 2014
Kawasaki-City
Kaneda,Jan. 2015
Atsugi-City
KichijojiHoncho,
Jul. 2014
Musashino-City

15,017Tsubo
11,694
Tsubo
1,982
Tsubo

NREG Kawasaki Logistics Center(Note) NMF is not scheduled to acquire the properties stated above as of today

21Future Distribution Level
Forecasts for the 4th and 5th fiscal periods
3rd Period(ended August. 31, 2014)

4th Period Forecasts(w ill end Feb. 28, 2015)(Comparison)

5th Period Forecasts(w ill end Aug. 31, 2015)(Comparison)

Operating Revenues¥9,468 million¥9,953 million

5.1%¥10,146 million

1.9%

Operating Profits¥4,638 million¥4,648 million

0.2%¥4,658 million

0.2%

Net Income¥4,079 million¥4,030 million-1.2%¥4,030 million

0.0%

Cash Distribution
per Unit¥2,450 /unit¥2,420 /unit-¥30¥2,420 /unit

\0

LTV

31.3 %

35.4 %

4.1%

35.3 %-0.1%(Note) Forecasts of distributions for the periods ending February 28, 2015 and August 31, 2015 are based on Nomura Master Fund’s summary of financial results dated October 14, 2014 and maychange in the future depending on acquisitions and sales of real estate, etc., changes in the real estate market, etc. and other circumstances surrounding Nomura Master Fund. Moreover, theabove forecasts do not guarantee the amounts of distributions.

Change in distributions(¥ / unit)

3,000

2,500

¥2,450

+¥40

1,500

-¥21

¥2,420

+¥10

-¥29

+¥19

(forecast)・Acquisition of
UCW Osaka
+¥40

2,000

-¥49

・LP Hachioji subsidy-¥32
・Penalty charges-¥17

・Expences related toGeneral Meeting ofUnitholders-¥9・Others-¥12¥2,420(forecast)・Full-period operation of
UCW Osaka+¥10・Repair costs-¥66
・PM Fee+¥37

・Expences related toGeneral Meeting ofUnitholders+¥9・Others
+¥10

1,000

500

0
3rd FP
Cash Distribution

4th FP
Cash Distribution

5th FP
Cash Distribution

22

ＡＰＰＥＮＤＩＸ

23

Income Statement

Operating revenues
Real estate rental revenues*1

Rental revenues
Other rental revenues

2nd Fiscal Period

3rdFiscal Period

From Sep. 1, 2013

From Mar. 1, 2014

To Feb. 28, 2014
Amount(￥000)
9,176,390

To Aug. 31, 2014
Amount(￥000)
9,468,466

Difference(￥000)
292,076

Difference
Ratio (%)
3.2

9,176,390

9,464,316

287,925

3.1

8,478,425

8,663,942

185,516

2.2

697,965

800,373

102,408

14.7
(5.6)

3rd FP actual - 2nd FP actual

78,08673,750(4,336)

Incidental income*2578,563631,826

53,262

9.2

Other miscellaneous revenues*341,315

94,79753,482

129.5

Parking revenues

4,150

4,150

3,827,980-

4,830,263

1,002,282

26.2

2,918,848

3,872,940

954,092

32.7

185,676

216,187

30,51016.4

731,211731,211

Gain on investments in silent partnership
Operating expenses
Real estate rental expenses*1

Repairs and maintenance-

Property and other taxes

1,535,760

37,898

2.5

Other rental expenses

1,235,309

1,389,780

154,47112.5

750,575

791,954

41,3785.5

158,556

165,368

6,811

4.3

*4

Operating profit

5,348,409

4,638,203(710,206)(13.3)

Non-operating revenues

24,096

1,722(22,373)0.0

Non-operating expenses

510,792

558,695

47,902

9.4

Interest expense

398,386

443,425

45,03911.3

112,406

115,269

2,862

2.5

Ordinary income

4,861,713

4,081,230(780,482)(16.1)

Income before income taxes

4,861,713

4,081,230(780,482)(16.1)

904

1,239

335

37.1

4,860,808

4,079,991(780,817)(16.1)

Retained earnings brought forw ard

940

855

(85)

(9.0)

Retained earnings at end of period

4,861,749

4,080,846(780,902)(16.1)

Total cash distribution

4,860,893

4,079,887(781,006)(16.1)

Other non-operating expenses

Income tax, etc.
Net income*5:¥5,591,375 thousand(¥666,166) thousand)¥546,396 thousand

3. Other real estate rental revenues
Cancellation penalties, etc.

-

1,497,862

Other operating expenses

2. Incidental income
Utility charges-

Depreciation

Asset management fees

*Reference [3rd Fiscal Period]
1. Real estate rental profits:(Change from previous FP :4. Other operating expenses
Asset custody fee
Administrative service fees
Directors fee, etc.

:::

¥14,756 thousand¥63,232 thousand¥4,800 thousand

5. Other non-operating
expenses
Loan arrangement fees, etc.

:

¥114,227 thousand(reference) Renovation expenses
Repairs and maintenance:Capital expenditure
:
Total
:

¥216,187 thousand¥698,693 thousand¥914,881 thousand(60% of depreciation)*Figures are rounded dow n to the nearest thousand.

24Balance Sheet
Liabilities and net assets

AssetsCurrent assets

2nd Fiscal Period

3rd Fiscal Period

2nd Fiscal Period

3rd Fiscal Period

as of Feb. 28, 2014
AmountRatio(￥000)(%)
21,357,367
8.2

as of Aug. 31, 2014
AmountRatio(￥000)(%)
17,158,740
6.7

as of Feb. 28, 2014
AmountRatio

as of Aug. 31, 2014
AmountRatio(￥000)
18,774,345

7.2(￥000)
2,546,408

330,1370.1

408,449

Current Liabilities

(%)

(%)
1.0

Cash and bank deposits

8,271,101

3.2

11,339,370

4.4

Trade accounts payable

Cash and bank deposits in trust

12,717,717

4.9

5,288,296

2.1

Short-term debt

*2

16,500,000

6.3

-

-

368,5480.1

531,073

0.2

Current portion of long-term debt

*2

85,6000.0

85,6000.0

240,225,504

91.8

239,881,325

93.3

Other accounts payable

207,9460.1

267,880

0.1

91.2

Accrued income taxes

651

0.0

716

0.0

5.6

Accrued consumption taxes

179,1190.1

275,5280.1

10,0530.0

24,4890.0

1,459,897

0.6

1,482,281

0.6

939

0.0

1,463

0.0

76,826,372

29.4

89,292,405

34.7

67,850,200

25.9

80,307,400

31.2

525,160

0.2

539,430

0.2

Security deposits from tenants in trust

8,451,011

3.2

8,445,574

3.3

Total liabilities

95,600,717

36.5

91,838,814

35.7

Other current assets
Noncurrent assets
Property and equipment*1

Real estate

235,215,801
14,377,435

89.9
5.5

234,382,512
14,339,323

Buildings

3,460,368

1.3

3,416,117

1.3

Accrued expenses

Land

10,917,067

4.2

10,923,206

4.2

Rent received in advanceReal estate in trust

220,815,140

84.4

220,039,882

85.6

Buildings in trust

92,115,158

35.2

91,339,901

35.5

Land in trust

128,699,981

49.2

128,699,981

50.1

23,225

0.0

3,305

0.0

3,840,489

1.5

3,841,406

1.5

3,829,099

1.5

3,828,713

1.5

11,3890.0

12,6930.0

1,169,214

0.4

1,657,406

0.6Construction in Progress
Intangible assets
Leasehold rights in trust
Other
Investment and other assets
Investment securities--

487,473

0.2

Long-term prepaid expenses

613,8810.2

614,601

0.2

Long-term deposits

39,2050.0

39,2050.0

Security deposits
Total assets

516,1260.2

516,1260.2

261,582,872

100.0

257,040,065

100.0

Other current liabilities
Long-term Liabilities
Long-term debt

*2

Security deposits from tenants

Unitholders' equity

0.2

165,982,154

63.5

165,201,251

64.3

Unitholders' capital

161,120,405

61.6

161,120,405

62.7

Retained earnings

4,861,749

1.9

4,080,846

1.6

Total net assets

165,982,154

63.5

165,201,251

64.3

Total liabilities and net assets

261,582,872

100.0

257,040,065

100.0*2 Debt (long-term debt due whithin a year are included in the short-term debt)*1 Property and equipment

Real estate, etc.
Buildings
Land
Buildings in trust
Land in trust
Construction in Progress(unit : million of yen)
AcqisitionPrice

Accumulated
Depreciation(Depreciation for
current FP)

Book value
at FP end

238,114
3,522
10,923
94,964
128,699
3

3,731
106
－
3,624
－
－

(1,535)(61)－(1,473)－－

234,382
3,416
10,923
91,339128,699
3

Balance of interest-bearing debt (millions of yen)

80,393

Total asset interest-bearing debt ratio

Short-term debt＋Long-term debt
Total assets

31.3%

Long-term interest-bearing debt ratio

Long-term debt
Short-term debt＋Long-term debt

99.9%

25

Cash Flow Statement
2nd Fiscal Period

3rd Fiscal Period

Sep. 1, 2013 - Feb. 28, 2014

Mar. 1, 2014 - Aug. 31, 2014(¥000)(¥000)

I.Cash flows from operating activities
Income before income taxes
Depreciation
Interest income
Interest expenses
Decrease (increase) in rental receivables
Decrease (increase) in prepaid expenses
Decrease (increase) in consumption taxes receivable
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
Increase (decrease) in accrued consumption taxes
Increase (decrease) in rent received in advance
OthersSubtotalInterest received
Interest paid
Income taxes paid
Net cash provided by (used in) operating activities

4,861,713
1,499,067(1,873)398,386
30,30130,8804,713,348
34,719(104)
67,549(327,789)
179,119
124,471(88,137)
11,521,651
1,873(398,990)(1,903)
11,122,630

4,081,230
1,537,049(1,708)443,425(111,532)(39,190)－(719)－
78,312
7,575
96,40922,383(25,457)
6,087,777
1,708(428,989)(1,682)
5,658,814(10,873,920)(743,476)(5,350)(9,155)－－(11,364)
368,763(103,402)
49,652(200)(11,328,454)(23,225)(651,166)(2,677)(423)(511,356)
23,883(175)
14,445(78,994)
88,243－(1,141,448)

III.Cash flows from financing activities
Proceeds from short-term debt
Repayment of short-term debt
Proceeds from long-term debt
Repayment of long-term debt
Distributions to unitholders
Net cash provided by (used in) financing activities

5,000,000(5,000,000)
6,000,000(42,800)(1,222,645)
4,734,554－(16,500,000)
12,500,000(42,800)(4,835,718)(8,878,518)

IV.Net increase (decrease) in cash and cash equivalents
V.Cash and cash equivalents at beginning of period
VI.Cash and cash equivalents at end of period

4,528,730
16,460,088
20,988,819(4,361,152)
20,988,819
16,627,667

II.Cash flows from investing activities
Payments for purchases of property and equipment
Payments for purchases of property and equipment in trust

Payments for purchases of intangible assets
Payments for purchases of intangible assets in trust
Purchases of investment securities
Proceeds from withdrawal of investment securities
Reimbursement of security deposits to tenants
Proceeds from security deposits from tenants
Reimbursement of security deposits to tenants in trust

Proceeds from security deposits from tenants in trust
Payments for security deposits
Net cash provided by (used in) investing activities

26

Forecasts for the 4th and 5th Fiscal Period

3rd FP Result

4th FP Forecast

5th FP Forecast

From Mar. 1, 2014

From Sep. 1, 2014

From Mar. 1, 2015

Difference(4th FP - 3rd FP)

Difference(5th FP - 4th FP)

To Aug. 31, 2014
Amount(millions of yen)
9,468

To Feb. 28, 2015
Amount(millions of yen)
9,953

To Aug. 31, 2015
Amount(millions of yen)
10,146

Amount(millions of yen)
485

Amount(millions of yen)
192

9,464

9,940

10,136

476

196

4

12

9

8

(3)

4,830

5,304

5,487

474

183

3,872

4,359

4,495

486

136

Repairs and maintenance

216

246

357

30

111

Tax and public dues

731

731

753

0

22

Operating revenue
Real estate rental revenues
Gain on investments in silent partnership
Operating expenses

Assumptions【Properties】
Number of properties *：56 properties* Does not include Silent Partnership Interest of Ryoke Capital Godo Gaisha
Total amount of acquisition price：¥253,523 million【Repair expenses 】

Real estate rental expenses

Depreciation
Asset management fees

1,535

1,696

1,705

160

9

791

787

828

(4)

40

\498 million for 4th fiscal period (\251 million of which is capital expenditure)
Example)Atsugi Minami Logistics Center B (Installation of LED)：

¥99 million

Morisia Tsudanuma (Installation of LED)：

¥44 million

Other operating expenses

165

157

163

(7)

5

\715 million for 5th Fiscal Period (\357million of which is capital expenditure)

Operating profit

4,638

4,648

4,658

10

9

Example)Non-operating revenues

1

-

-

(1)

-

Non-operating expenses

558

617

626

58

9

557

616

626

59

9

【Loans】

Ordinary income

4,081

4,031

4,031

(49)

0

Total Interest-bearing debt
(as of Aug. 31, 2014)

Net income

4,079

4,030

4,030

(49)

0

Interest expenses,loan arrangement fees

Yokosuka More's City (Renewal of the exterior pachage 2nd phase)：¥108 million

Kawasaki Mores (Renewal of the escalator)：¥43 million：¥80,393 million

Interest-bearing debt repayment due during 4th FP

Number of investment units issued
Cash distribution per unit
Number of properties(units)(yen)

1,665,260

1,665,260

1,665,260

-

-

2,450

2,420

2,420

(30)

-

55

56

56

1

-

Repayment through loans：－ million

Agreed repayment (Nov. 2014, Feb. 2015)：¥42 million

Interest-bearing debt repayment due during 5th FP
Repayment through loans：－ million

Agreed repayment (May 2015, Aug. 2015)：¥42 million

27

External Growth Strategy
Locations of properties owned

Investment target• Invest with greater Tokyo area as core (at least 80% in principle)with strong demand• Acquire competitive properties no older than 10 years

SectorYield target

Comments

Logistics

5.0% ～ 6.0%

High-functioning logistics facilities incompetitive locations with quality specs
regardless of size

Retail(residential area)

5.0% ～ 6.0%

NSC centering on food supermarkets with
dense population areas

Retail(station area)

Around 4.5%

Retail buildings (services, sales andrestaurants) near train stations in areas ofcommercial accumulation: Logistics: Retail28

Overview of Equity Interest in Silent Partnership
Summary of silent partnership equity<Photo>Ryoke Capital Godo Gaisha

Beneficiary interest in realestate in trust, etc.
¥11,440 million

Non-recourse loans¥8,640 million
Silent partnership equity¥2,800 million• The Fund acquired¥500 million (17.9%)• Obtained preferential
right to purchase thebeneficiary interest inreal estate<MAP>

Summary of the property (NIPPON EXPRESS CO.,LTD. North Tokyo Distribution Center)

Completion Date

October 2003

Location

Ryoke, Kawaguchi-City, Saitama

Access1.5km from Kawaguchi-Motogo
Station on the Saitama Railway line

Appraisal Value¥11,000 million (as of Oct. 31, 2013)

Appraisal NOI
yield

5.2%

Leasable floor
space

42,840.91m2 (12,959.37 tsubo)

Occupancy rate

100.0% (as of Aug. 31, 2014)NIPPON EXPRESS CO., LTD.
North Tokyo Distribution Center

29

Portfolio Data (as of August 31, 2014)
Portfolio building age

Incorporation by use

Diversification by region
5.4%

5.8%

20.0%

10.0%

Retail : Logi.

GreaterTokyo area

48.7% : 51.3%

84.6 %

Average age 45.4%

51.3%

48.8%

13.8 years

28.7%
84.6%

Greater Tokyo area

Kinki area

Others

Logistics

Retail (station)

Lease term(based on leased floor space)
2.2%
26.1%

12.7 years
71.4%

5 to 10 years

Less than 5 years

Lease term remaining(based on leased floor space)

21.7%

Averagelease term

10 years or more

Retail (residential)

18.6%

Averageremaininglease term

6.1 years 24.8%
34.9%

10 years or more

5 to 10 years

10 years or more

5 to 10 years

2 to 5 years

Less than 2 years

2 to 5 years

Less than 2 years

30Portfolio List
Type

Location

AcquisitionPrice(in millions)

Morisia Tsudanuma

Narashino City, Chiba

16,6007.0

17,30039,624.63

98.6

4.70

Yokosuka More’s City

Yokosuka City, Kanagawa

13,6405.7

14,70029,383.65

100.0

6.89

3.73

Recipe SHIMOKITA

Setagaya-ku, Tokyo

10,407

4.4

10,6006,295.22

99.5

4.38

100.0

6.15

EQUINIA Shinjuku

Shinjuku-ku, Tokyo

4,260

1.8

4,340

3,611.59

88.3

5.81

50,450.00

100.0

4.32

Kawasaki More’s

Kawasaki City, Kanagawa

4,000

1.7

4,300

14,446.48

100.0

7.39

9,530

57,448.03

100.0

7.30

EQUINA Ikebukuro

Toshima-ku, Tokyo

3,990

1.7

4,200

2,693.93

100.0

8.36

3.5

8,720

34,896.32

100.0

5.79

covirna machida

Machida City, Tokyo

3,440

1.4

4,090

2,891.32

100.0

10.85

7,340

3.1

8,050

29,630.48

100.0

5.90

Nitori Makuhari

Chiba City, Chiba

3,080

1.3

3,320

14,367.98

100.0

3.90

4,660

2.0

5,060

30,641.98

100.0

3.40

Konami Sports Club Fuchu

Fuchu City, Tokyo

2,730

1.1

3,110

12,385.18

100.0

2.76

Atsugi City, Kanagawa

4,590

1.9

4,960

24,909.96

100.0

6.15

FESTA SQUARE

Saitama City, Saitama

2,600

1.1

2,810

7,480.63

100.0

5.40

Hanyu City, Saitama

3,810

1.6

4,250

24,850.80

100.0

2.72

GEMS Shibuya

Shibuya-ku, Tokyo

2,490

1.0

2,520

1,791.34

100.0

4.18

Kawaguchi Logistics Center B Tower Kawaguchi City, Saitama

3,750

1.6

4,150

13,648.70

100.0

2.92

Sundai Azamino

Yokohama City, Kanagawa

1,700

0.7

1,820

2,286.47

100.0

4.89

Kawaguchi Logistics Center A Tower Kawaguchi City, Saitama

2,830

1.2

3,150

12,003.57

100.0

2.92

EQUINIA Aobadai

Yokohama City, Kanagawa

1,560

0.7

1,720

2,457.36

93.0

9.33

Megalos Kanagawa

Yokohama City, Kanagawa

1,000

0.4

1,230

6,217.85

100.0

9.06

Izumiya Senrioka

Suita City, Osaka

8,930

3.8

10,10024,399.12

100.0

5.43

14,941.54 (Retail)100.0

Merad Owada

Osaka City, Osaka

6,640

2.8

7,060
5,856.50 (Logistics)

100.0

Location

AcquisitionPrice(in millions)

Investment
Rate
(%)

Landport Urayasu

Urayasu City, Chiba

17,400

7.3

Landport Itabashi

Itabashi-ku, Tokyo

15,710

6.6

Landport Kawagoe

Kawagoe City, Saitama

13,700Landport Atsugi

Atsugi City, Kanagawa

Sagamihara Tana Logistics Center

AppraisalValue(in millions)
19,10070,045.85

100.0

4.16

17,30052,794.55

100.0

6.42

5.8

14,60071,569.89

100.0

11,4104.8

12,50047,995.23

Sagamihara City, Kanagawa

10,600

4.5

11,300

Sagamihara Onodai Logistics Center Sagamihara City, Kanagawa

8,700

3.7

Landport Hachioji

Hachioji City, Tokyo

8,250

Landport Kasukabe

Kasukabe City, Saitama

Funabashi Logistics Center

Funabashi City, Chiba

Atsugi Minami Logistics Center B Tow er

Hanyu Logistics Center

PML
(%)

Tokyo Area

Logistics

Atsugi City, Kanagawa

2,690

1.1

3,030

9,825.52

100.0

5.36

Ota Nitta Logistics Center

Ota City, Gunma

3,430

1.4

3,690

42,328.00

100.0

1.40

Ota Higashishinmachi Logistics Center

Ota City, Gunma

2,170

0.9

2,390

23,584.72

100.0

1.35

Ota Kiyohara Logistics Center

Ota City, Gunma

Chiyodamachi Logistics Center

Oura-Gun, Gunma

Logisticsl Subtotal (18 properties)

650

0.3

704

9,397.38

100.0

1.03

330

0.1

356

4,592.00

100.0

3.76

122,02051.3

132,840

610,612.98

100.0

3.03

Area

Kinki Area

Other

Atsugi Minami Logistics Center A Tow er

TypeRetail other than land-only property

Occupancy
Rate(%)

Property nameTokyo Area

Leasable Space
(㎡)

Area

Other

Investment Securities
Tokyo
Area

Ryoke Capital Godo Kaisha
Kawaguchi City, Saitama

500

-

-

－

－

－

Silent Partnership Equity Interest

Property name

Investment
Rate
(%)

AppraisalValue(in millions)Leasable Space(㎡)

Occupancy
Rate
(%)

PML
(%)

3.33

Tokyo Area

Land-only retail property

Kinki
Area

Izumiya Yao

Yao City, Osaka

4,406

1.9

4,830

34,198.01

100.0

3.97

Izumiya Obayashi

Takarazuka City, Hyogo

3,020

1.3

3,510

11,714.36

100.0

3.89

Ichibancho stear

Sendai City, Miyagi

4,700

2.0

5,040

4,582.81

100.0

2.42

EQUINIA Aobadori

Sendai City, Miyagi

1,640

0.7

1,790

4,030.37

100.0

Mitsubishi Motors Meguro

Meguro-ku, Tokyo

2,740

1.2

2,810

3,381.19

100.0－

Mitsubishi Motors Chofu

Chofu-shi, Tokro

1,760

0.7

1,840

4,183.63

100.0－

Mitsubishi Motors Shibuya

Shibuya-ku, Tokyo

1,570

0.7

1,740

1,421.31

100.0－

Mitsubishi Motors Nerima

Nerima-ku, Tokyo

1,240

0.5

1,270

1,725.61

100.0－

Mitsubishi Motors Kawasaki

Kawasaki City, Kanagawa

950

0.4

1,020

3,057.02

100.0－

Mitsubishi Motors Takaido

Suginami-ku, Tokyo

850

0.4

898

1,923.64

100.0－

Mitsubishi Motors Katsushika

Katsushika-ku, Tokyo

800

0.3

816

1,930.05

100.0－

Mitsubishi Motors Higashikurume

Higashikurume City, Tokyo

800

0.3

823

4,105.00

100.0－

Mitsubishi Motors Setagaya

Setagaya-ku, Tokyo

770

0.3

784

1,305.78

100.0－

Mitsubishi Motors Suginami

Suginami-ku, Tokyo

740

0.3

804

1,831.00

100.0－

Mitsubishi Motors Sekimachi

Nerima-ku, Tokyo

600

0.3

614

989.77100.0－

Mitsubishi Motors Higashiyamato

Higashiyamato City, Toyko

450

0.2

490

2,783.79

100.0－

Mitsubishi Motors Motosumiyoshi

Kawasaki City, Kanagawa

370

0.2

376

1,646.97

100.0－

Mitsubishi Motors Kawagoe

Kawagoe City, Saitama

350

0.1

361

2,462.40

100.0－

Mitsubishi Motors Edogawa

Edogawa-ku, Tokyo

200

0.1

210

892.56100.0－

Mitsubishi Motors Sayama

Sayama City, Saitama

160

0.1

167

1,793.00

100.0

－

－

1.57

Mitsubishi Motors
820

0.3

870

5,704.24

100.0

Retail Subtotal (37 properties)

Ibaraki City, Osaka

116,00348.7

124,283

286,793.30

99.6

3.06

Total (55 properties)

238,023100.0

257,123

897,406.28

99.9

2.68

Ibaraki Maintenance Center

31

List of End-of Period Appraisal ValueBook Valueat 3rd Period End

Appraisal Valueat 3rd Period End

Appraisal Valueat 2nd Period End(¥ mln)(¥ mln)(¥ mln)Landport Urayasu

17,40017,253

19,100Landport Itabashi

15,71015,606

Landport Kawagoe

13,700Landport Atsugi

11,410

Sagamihara Tana Logistics Center
Sagamihara Onodai Logistics Center

Appraisal Valueat 3rd Period End

Appraisal Valueat 2nd Period End(¥ mln)(¥ mln)(¥ mln)Morisia Tsudanuma

16,60016,841

17,30017,300--

2.4%

Yokosuka More’s City

13,64013,737

14,70014,400

300

2.1%

600

4.3%

Recipe SHIMOKITA

10,407

10,814

10,60010,600

-

-

400

3.3%

EQUINIA Shinjuku

4,260

4,297

4,340

4,330

10

0.2%

-

-

Kawasaki More’s

4,000

4,067

4,300

4,200

100

2.4%

170

1.8%

EQUINA Ikebukuro

3,990

4,013

4,200

4,140

60

1.4%

covirna machida

3,440

3,624

4,090

3,840

250

6.5%

Nitori Makuhari

3,080

3,039

3,320

3,310

10

0.3%

Konami Sports Club Fuchu

2,730

2,712

3,110

3,050

60

2.0%

FESTA SQUARE

2,600

2,562

2,810

2,810

-

-

GEMS Shibuya

2,490

2,506

2,520

2,500

20

0.8%

Sundai Azamino

1,700

1,678

1,820

1,790

30

1.7%

EQUINIA Aobadai

1,560

1,571

1,720

1,700

20

1.2%

Megalos Kanagawa

1,000

1,018

1,230

1,210

20

1.7%

Izumiya Senrioka

8,930

8,878

10,10010,000100

1.0%

Merad Owada

6,640

6,642

7,060

6,960

100

1.4%

Izumiya Yao

4,406

4,367

4,830

4,710

120

2.5%

0.3%

Izumiya Obayashi

3,020

3,198

3,510

3,270

240

7.3%

2.3%

Ichibancho stear

4,700

4,688

5,040

5,170

▲130

▲2.5%

EQUINIA Aobadori

1,640

1,602

1,790

1,760

30

1.7%

Mitsubishi Motors Meguro

2,740

2,764

2,810

2,810

-

-

Mitsubishi Motors Chofu

1,760

1,776

1,840

1,840

-

-

Mitsubishi Motors Shibuya

1,570

1,586

1,740

1,740

-

-

Mitsubishi Motors Nerima

1,240

1,251

1,270

1,270

-

-

Mitsubishi Motors Kawasaki

950

959

1,020

1,010

10

1.0%

Mitsubishi Motors Takaido

850

859

898

898

-

-

Mitsubishi Motors Katsushika

800

808

816

815

1

0.1%

Mitsubishi Motors Higashikurume

800

808

823

815

8

1.0%

Mitsubishi Motors Setagaya

770

779

784

783

1

0.1%

Mitsubishi Motors Suginami

740

748

804

793

11

1.4%

Mitsubishi Motors Sekimachi

600

606

614

614

-

-

Mitsubishi Motors Higashiyamato

450

455

490

488

2

0.4%

Mitsubishi Motors Motosumiyoshi

370

375

376

375

1

0.3%

Mitsubishi Motors Kawagoe

350

355

361

356

5

1.4%

Mitsubishi Motors Edogawa

200

204

210

210

-

-

Mitsubishi Motors Sayama

160

163

167

166

1

0.6%

Change18,600500

2.7%17,30016,900400

13,502

14,60014,000

11,202

12,50012,10010,60010,877

11,30011,300

8,700

8,600

9,530

9,360

Landport Hachioji

8,250

8,131

8,720

8,710

10

0.1%

Landport Kasukabe

7,340

7,205

8,050

7,710

340

4.4%

Funabashi Logistics Center

4,660

4,677

5,060

4,930

130

2.6%

Atsugi Minami Logistics Center B Tower

4,590

4,533

4,960

4,850

110

2.3%

Hanyu Logistics Center

3,810

3,736

4,250

4,180

70

1.7%

Kawaguchi Logistics Center B Tower

3,750

3,743

4,150

4,080

70

1.7%

Kawaguchi Logistics Center A Tower

2,830

2,835

3,150

3,090

60

1.9%

Atsugi Minami Logistics Center A Tower

2,690

2,675

3,030

2,970

60

2.0%

Ota Nitta Logistics Center

3,430

3,347

3,690

3,690

-

-

Ota Higashishinmachi Logistics Center

2,170

2,121

2,390

2,380

10

0.4%

Ota Kiyohara Logistics Center

650

632

704

702

2

0.3%

Chiyodamachi Logistics Center

330

328

356

355

1

Logistics Subtotal (18 properties)

122,020

121,011

132,840

129,907

2,933

Decrease

12
1

2nd Period ⇒3rd Period

41
12
2

Other

±0

42

Tokyo Area

Land-only retail property

Increase

Other

Comparison with the previous period
1st Period ⇒2nd Period

Kinki Aera

OtherBook Valueat 3rd Period End

Property Name

Retail other than land-only property

Logistics

Tokyo Area●

AcquisitionPrice(¥ mln)Difference
between(¥ mln)Tokyo Area

AcquisitionPrice(¥ mln)Property Name

Difference
between(¥ mln)ChangeMitsubishi Motors
Ibaraki Maintenance Center

820

829

870

878

▲8

▲0.9%

Retail Subtotal (37 properties)

116,003

117,196

124,283

122,911

1,372

1.1%

Total (55 properties)

238,023

238,207257,123

252,818

4,305

1.7%

（Ａ）

（Ｂ）

Difference between Book Value and Appraisal Value¥18,915 mln(¥11,358/unit)（Ｂ）－（Ａ）

32

Portfolio Map
Logistics

Retail01 Landport Urayasu
02 Landport Itabashi
03 Landport Kawagoe
04 Landport Atsugi
05 Sagamihara Tana Logistics Center
06 Sagamihara Onodai Logistics Center
07 Landport Hachioji
08 Landport Kasukabe
09 Funabashi Logistics Center
10 Atsugi-Minami Logistics Center B Tower
11 Hanyu Logistics Center
12 Kawaguchi Logistics Center B Tower
13 Kawaguchi Logistics Center A Tower
14 Atsugi-Minami Logistics Center A Tower
15 Ota Nitta Logistics Center
16 Ota Higashi-Shinmachi Logistics Center
17 Ota Kiyohara Logistics Center
18 Chiyodamachi Logistics Center

20
19

17
15
18
15
37
18
16 17

16
11

01 Morisia Tsudanuma
02 Yokosuka More’s City
03 Recipe SHIMOKITA
04 EQUINIA Shinjuku
05 Kawasaki More’s
06 EQUINIA Ikebukuro
07 Covirna machida08 Nitori Makuhari
09 Konami Sports Club Fuchu
10 FESTA SQUARE
11 GEMS Shibuya
12 Sundai Azamino
13 EQUINIA Aobadai
14 Megalos Kanagawa
15 Izumiya Senrioka
16 Merad Owada
17 Izumiya Yao
18 Izumiya Obayashi
19 Ichibancho stear
20 EQUINIA Aobadori
21 Mitsubishi Motors Meguro (Land)
22 Mitsubishi Motors Chofu (Land)
23 Mitsubishi Motors Shibuya (Land)
24 Mitsubishi Motors Nerima (Land)
25 Mitsubishi Motors Kawasaki (Land)
26 Mitsubishi Motors Takaido (Land)
27 Mitsubishi Motors Katsushika (Land)
28 Mitsubishi Motors Higashikurume (Land)
29 Mitsubishi Motors Setagaya (Land)
30 Mitsubishi Motors Suginami (Land)
31 Mitsubishi Motors Sekimachi (Land)
32 Mitsubishi Motors Higashiyamato (Land)
33 Mitsubishi Motors Motosumiyoshi (Land)
34 Mitsubishi Motors Kawagoe (Land)
35 Mitsubishi Motors Edogawa (Land)
36 Mitsubishi Motors Sayama (Land)
37 Mitsubishi Motors Ibaraki Maintenance Center(Land)

33

Unitholders (at end of 3rd Fiscal Period)
Number of unitholders

Breakdown of financial institutions: 141 (0.5%)
・Financial institutions
・Other domestic corporations : 575 (2.0%): 145 (0.5%)
・Foreign corporations
End of 2nd FY(2014/2/28)
Unitholders
28,583End of 2nd period

Individuals and others:
27,722 (97.0%)

Banks40,102 units

2.41% 49,913 units

3.00%

Trust banks

570,945 units

34.29% 694,302 units

41.69%

Life insurance companies

23,299 units

1.40% 28,325 units

1.70%

0.04%

999 units

0.06%

77,764 units

4.67% 78,706 units

4.73%

712,813 units

42.80% 852,245 units

51.18%

703 units

Non-life insurance companies: 140 (0.6%)
・Financial institutions
・Other domestic corporations : 416 (1.8%): 185 (0.8%)
・Foreign corporations
End of 3rd FY(2014/8/31)
Unitholders
23,094

Other financial institutions

Individuals and others:
22,353 (96.8%)

Top 10 unitholders
Unitholder

Number of investment units
End of 2nd FY(2014/2/28)
No. of Units
1,665,260

446,603(26.8%)

712,813(42.8%)

177,306 328,538(10.6%) (19.7%)

852,245(51.2%)

151,431
(9.1%)

361,466(21.7%)

Individuals and others

Financial institutions

Other domestic corporations

Foreign corporations

Number of units

Ratio

1 Japan Trustee Services Bank, Ltd.

307,93118.49%

2 The Master Trust Bank of Japan, Ltd.

171,633

10.31%

3 Trust & Custody Services Bank, Ltd.

125,892

7.56%

4 Nomura Real Estate Development Co., Ltd.

87,8205.27%

5 The Nomura Trust and Banking Co., Ltd.

72,928

4.38%

6 Nomura Bank Luxembourg SA

44,347

2.66%

23,474

1.41%

8 State Street Bank and Trust Company

19,545

1.17%

9 The Bank of New York, Non-Treaty JASDEC Account18,082

1.09%

10 Mitsubishi UFJ Morgan Stanley Securities Co., Ltd.

17,294

1.04%

888,94653.38%

7
End of 3rd FY
End of 1st FY(2014/8/31)
300,118(2013/8/31)
No. of Units(18.0%)
1,665,260

End of 3rd period

NOMURA PB NOMINEES LIMITED OMNIBUS-MARGIN(CASHPB)

Total

34

Tenant Status (at end of 3rd Fiscal Period)
Top 10 tenants (based on leased area)
TenantUse

Property Name

Total leased area
(㎡)

Ratio
(%)

92,389.48

10.3

70,311.49

7.8

Landport Urayasu
1

Fukuyama Transporting Co., Ltd.

Logistics
Sagamihara Onodai Logistics Center
Izumiya Senrioka

2

Izumiya Co., Ltd.

RetailIzumiya Yao
Izumiya Obayashi

3

Amazon Japan Logistics K.K.

Logistics

Landport Kawagoe

56,377.76

6.3

4

Neovia Logistics Service

Logistics

Sagamihara Tana Logistics Center

50,450.00

5.6

5Yokohama Okadaya

Retail

43,830.13

4.9

Yokosuka More’s City
Kawasaki More’s
6

Mitsui-Soko Logistics Co., Ltd.

Logistics

Ota Nitta Logistics Center

42,328.00

4.7

7

Undisclosed (Note)

Retail(land)

Mitsubishi Motors (Total 17 properties)

41,136.96

4.6

8

ASKUL Corporation

Logistics

Landport Itabashi

37,276.71

4.2

9

Otsuka Warehouse Co., Ltd.

Logistics

Landport Urayasu

35,104.40

3.9

10

Shinkai Transport Systems, Ltd.

Logistics

Landport Hachioji

34,896.32

3.9504,101.25

56.2

Top 10 tenants total(Note) The name of the tenant is undisclosed due to unavoidable circumstances.

35

Changes in Financial Performance
1st FP

2nd FP

3rd FP

Operating Revenues

million yen

3,683

9,176

9,468

Operating Profits

million yen

2,089

5,348

4,638

Net Income

million yen

1,251

4,860

4,079

Asset Total

million yen

252,265

261,582

257,040

Interest-bearing Debt Total

million yen

78,47884,43580,393

Net Asset

million yen

162,371

165,982

165,201

Return on Assets (ROA)

%

2.5

3.8

3.1

Return on Equity (ROE)

%

3.5

6.0

4.9

FP End Capital Adequacy Ratio

%

64.4

63.5

64.3

LTV

%

31.1

32.3

31.3

times

9.6

13.2

10.2

Weighted Average Interest Rate

%

0.99

0.98

1.12

Debt Average Remaining Duration

years

4.8

4.4

5.1

million yen

3,123

7,755

7,127

%

6.26

6.57

5.94

FFO

million yen

1,950

6,359

5,617

Number of Properties

properties

54

55

55

Acquisition Price Total

million yen

227,616

238,023

238,023

Book Value Total

million yen

229,489

239,044

238,207

Appraisal Value Total

million yen

239,326

252,818

257,123

NAV per Unit

thousand yen

103

107

110

Interest Coverage Ratio

Rent NOINOI Yield (acquisition price base)

ROA=Current Profits/[(Total Asset Value at Start of FP+Total Asset Value at FP End)÷2]x100 *annual basis

Rent NOI=Real Estate Rental Business Revenues-Real Estate Rental Business Income+Current FP Depreciation and Amortization*For the total asset value at start of 1st FP, total assets amount on the date of commencement of the actual asset management (June 13, 2013) is usedNOI Yield (Acquisition Price Base)=Rent NOI/Total Acquisition Price x 100 *annual basis

ROE=Net Income/[(Net Asset at FP Start+Net Asset at FP End)÷2]x100 *annual basis

FFO=Net Income+Current FP Depreciation and Amortization+Investment Corporation Bond Issuance Ammortization-Real Estate Disposition Profit & Loss

*For the net asset at start of 1st FP, total net asset amount on the date of commencement of the actual asset management (June 13, 2013) is used

NAV per Unit=[Net Asset Total-(Income Statement Total-Appraisal Value Total)]/Total Number of Investment Units Issued

Capital Adequacy Ratio at FP End=Net Asset at FP End/Total Asset at FP End x 100*annual basis=each measure/operating days x 365 days

LTV=Total Interest-bearing Debt at FP End/Total Asset at FP End x 100
Interest Coverage Ratio=Net Income Before Interest Depreciation/(Interest Expenses+Investment Coroporation Bond Interest)36

Analyst Coverage, Inclusion to the Index
Inclusion to the index

Analyst coverage

Security Firm

AnalystCoverage Date

Tomohiro Araki

July 26, 2013

Hiroshi Torii

Mitsubishi UFJ Morgan Stanley

Index

Inclusion Date

FTSE EPRA/NA-REIT
Global Real Estate Index

June 24, 2013

January 10, 2014

TSE REIT Index

July 31, 2013

Kazufumi Takeuchi

January 16, 2014

Russel Global Index

October 1, 2013

Daiwa

Tomohiro Sumiya

March 12, 2014MSCI Japan Small Cap Index

November 26, 2013

Credit Suisse

Masahiro Mochizuki

May 29, 2014

S&P Global Property Index

March 24, 2014

Yosuke Ohata

August 28, 2014

GPR 250 Index

NomuraSMBC Nikko

MizuhoSeptember 22, 2014

Trading status after listing(units)160

250,000

150
200,000

140
130

150,000

120
100,000

110
100

50,0009080
2013/060
2013/072013/08
2013/09
Trading Volume (units)

2013/102013/11(Note) Indexed with the closing price of listing date as 100.

2013/12NMF

2014/01

2014/02

2014/03
2014/04
TSE REIT Index

2014/05

2014/06
2014/07
2014/08
2014/09
TSE Retail & Logistics, Others Index

2014/10(Source) Prepared by Nomura Real Estate Asset Management Co., Ltd. based on Bloomberg

37

Logistics Facilities Environment
Change in the size of the e-commerce retail market
and the number of home delivery service
Number of parcels
handled(million)
3,700(¥ billion)
6,000

Warehouse stock in greater Tokyo area
<Left axis>
Clothes andaccessories

5,000

3,500

Spots, books，music
and toys

4,000

3,300

Pharmaceuticalcosmetics

3,000

3,100

2,000

2,900

Furniture,
household goods,
etc.

1,000

2,700

General retail

2,500<Right axis>
Number of parcels
handled

2,500(thousand㎡) in greater Tokyo area
Warehouses
New supply > New demand
33 million tsubo 100.0%

2,000

Large-scale warehouses 13.2
7.4 million tsubo 22.5%

Food

1,500

0
2007

2008

2009

2010

2011

2012

2013

1,000

（2007 ＝ 100）

New large-scale warehouses
8.7
3.6 million tsubo 11.1%

500
3.9

Supply-demand balance of rentable0large scale
logistics facilities(tsubo)

130

13.1

8.2

Change in 3PL sales
140

New demand > New

2006

2007

2008

3.3
2009

2010

350,000
New supply

New demand

2011

Vacancy rate

300,000

120

18%

15%

250,000
12%

110
200,000
9%100
150,00090

6%100,000

80

3%50,00070

2014 Q2

60
2007

2008

2009

2010

2011

2012

2013

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

(Source) Prepared by Nomura Real Estate Asset Management Co., Ltd. based on public data of the Ministry of Economy, Trade and Industry and the Ministry of Land, Infrastructure, Transport and Tourism (upper left), public data of the
Ministry of Internal Affairs and Communications and the Ministry of Economy, Trade and Industry (upper right), and CBRE, Inc. (lower left and lower right).

38

Retail Facilities Environment
Retail sales (by item)

Change in retail industry corporate performance¥ trillion (total retail sales)
140
45
120

40

1.5

400

1

200

0.5

0

0

Total retail industry sale (excluding fuel)2005

Change in Economy Watcher’s index

2006

2007

DI for current business conditions

2010

2012

4-6

1-3

7-9

10-12

4-6

1-3

7-9

2011

10-12

4-6

1-3

7-9

10-12

4-6

1-3

7-9

10-12

4-6

7-9

1-3

2009

2013

(Reference) Impact of consumption tax hike (April 1997)
Non-Durable Goods( DI )
65

2008

10-12

1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013

4-6

0

1-3

7

0

7-9

Mechanical equipment

20
10-12

11

5

5

2

600

40

Automobile retail

Clothing and accessories

800

60

4-6

12

10

2.5

1-3

16

15

17

1,000

7-9

Commodities

80

10-12

21

20

3

4-6

25

3.5

1,200

1-3

Other retail

30

1,400

100

7-9

33

4.5

4

10-12

35

35

(%)

Operating profit on sales

1,600

4-6

Food and beverage

45

Ordinary income(¥ billion)
1,800

1-3

¥ trillion (sales by item)
50

Semi-Durable Goods

Non-Durable Goods

Services6%

DI for future conditions

4%

60
2%

55

0%

50
45

-2%

40

-4%

35

-6%

30

-8%

25

-10%

20

-12%

15
2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

Limited impact on non-durable goods (beverages, food, etc.) and services(Source) Prepared by Nomura Real Estate Asset Management Co., Ltd. based on public data of the Ministry of Economy, Trade and Industry (upper left), public data of the Ministry of Finance (upper right) and public data of the
Cabinet Office (lower left and lower right).

39

Overview of Nomura Master Fund
Structure
Specified Related Party

Investment Corporation

Asset custodyagreement

Parent company of the asset
management company

Sumitomo Mitsui Trust Bank, Ltd.

Nomura Real Estate
Master Fund, Inc.

Nomura Real Estate
Holdings, Inc.

Unitholder’s Meeting
Asset Management
Company
Nomura Real Estate
Asset Management Co., Ltd.

Asset managementagreement

Executive Director: Takashi kataoka
Supervisory Director: Sadahiko Yoshimura
Supervisory Director: Shuhei Yoshida

AuditorInformation provider
Ernst & Young Shin Nihon LLC
Development Co., Ltd.

General administration
Agreement /Transfer agency
agreement

General Administrator
and Transfer Agent
Mitsubishi UFJ Trustand Banking Corporation

Board of Directors

Information provisionagreement

Nomura Real Estate

CustodianHistory
January 28, 2013
Filing of incorporation by the founder (Nomura Real Estate
Asset Management Co., Ltd) under Article 69 of theInvestment Trusts Act.
January 31, 2013
Registration of incorporation under Article 166 of theInvestment Trusts Act, Incorporation of NMF
February 1, 2013
Application for registration under Article 188 of theInvestment Trusts Act.
February 22, 2013
Registered with the Prime Minister of Japan under Article
187 of the Investment Trusts Act.
(Registration No. 82, Kanto Local Finance Bureau)
June 12, 2013
Listed on the Tokyo Stock Exchange

40

Overview of the Asset Management Company
Overview

Statutory Auditors

Corporate Planning

Internal Audit

Nomura Real Estate Asset Management Co., Ltd.

Shareholder

Nomura Real Estate Holdings, Inc. (100%)

Location

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

Accounting

Investment Performance Analysis Section

President & CEO

Board of Directors

Company name

Legal & Compliance

Discretionary Investment Management Section

Finance

Contact Information +81-3-3365-8767
Registration,
License, etc.

Client Relations & Marketing
Investment Management

Memberships

Chief Strategy Officer

Project Screening Committee

NPR Valuation Committee

Risk Management Committee

Compliance Committee

Product Management

Investment Committee

General Meeting of Shareholders

Board of Statutory Auditors

Organizational chart

nmf3285@nomura-re.co.jp

・Financial instruments business operator registration:
Commissioner of the Kanto Local Finance Bureau(Financial Instruments) No. 374
・Licensed for discretionary proxy in realty trading:
Minister of Land, Infrastructure and Transport
Permit No.18
・Licensed for real estate trading: Governor of Tokyo (3)No. 81679
・The Investment Trusts Association, Japan; The Japan
Investment Advisers Association, The Association
for Real Estate Securitization, etc.

Research & Analysis Section
Acquisitions
Investment Management Planning
NOF Investment Management
NRF Investment Management
NMF Investment Management
NPR Investment Management

41This document has been prepared for the purpose of provision of information only, and should not be construed
as an offer, solicitation or commercial conduct of any nature associated with any specific products. Investors
wishing to purchase the investment units of Nomura Real Estate Master Fund, Inc. should contact their own
securities brokers or dealers. A fee may be charged by your financial instruments business operator in relation
to the sale or purchase of investment units.
For management fees that the Fund pays to Nomura Real Estate Asset Management Co., Ltd., please refer tothe terms and conditions of the Fund, asset management reports, etc.
The forward-looking statements with respect to the future financial results contained in this document are basedon the current facts about the investment policy of the Fund, applicable laws and regulations, the market
environment, business practice, etc., as of the preparation date of this document and do not reflect or consider
any changes in the circumstances after the preparation date. These forward-looking statements inherently
reflect uncertainty about known risks as well as unknown risks and other factors and may deviate from theactual operating and management results, financial conditions, etc., of the Fund.
Investment in real estate investment securities may result in a loss due to a decline in the transaction pricecaused by, for example, changes in the price or the revenue-generating capability of the underlying properties
or deterioration of the financial conditions of the issuer.
Although the information contained in this document is intended to be complete and thorough, there is no
assurance of precision and safety of the same. Please note that the contents of this document is subject tochange or cancellation without prior notice.
It is prohibited to make duplication, reproduction, distribution or use of any part or whole of the information
contained in this document without express prior written consent.