[For Translation Purposes Only]

April 25, 2017

Nomura Real Estate Master Fund, Inc.
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. +81-3-3365-8767 nmf3462@nomura-re.co.jp

Notice Concerning Property Acquisition
Nomura Real Estate Master Fund, Inc. (“Nomura Master Fund” or the “Fund”) announced thedecision made today by Nomura Real Estate Asset management Co., Ltd., a licensed investment trust
management company retained by the Fund to provide asset management services, that it will acquire
asset (the “Acquisition”), as described below.

1．Summary of Asset scheduled to be Acquired
Property name

Use

Type of asset(Scheduled)
Date ofagreement(Scheduled)
Date ofacquisition

Seller(Scheduled)
Acquisition price(¥million)(Note 1)

Summit Store
Naritahigashi (Land)

RetailReal estate

April 28,
2017

April 28,
2017

Undisclosed(Note 2)700(Note 1)The amount excluding acquisition related costs, property tax, city planning tax, consumption tax and local
consumption tax is stated.
(Note 2)Undiscoled, since concent have not obetained from the seller.
(Note 3)This property is scheduled to acquire using cash on hand.

2．Reason for the Acquisition
In accordance with the Medium to Long-term Management Strategy it announced in November
2015, Nomura Master Fund designated the next three years as its Quality Phase and has been
implementing various related measures.
One key measure is Strategic Property Replacement (SPR), which is aimed at improving the qualityof our portfolio. As part of this measure, the Fund decided to acquire the Property at this time.
The Fund evaluated the points below concerning the acquisition of the Property.

－ １ －• Suginami Ward, where the Property is located, is a very popular place to live and experiencing
ongoing population growth(Note) due to its convenient access to central Tokyo and pleasantresidential environment.
• Within a 1-km radius of the Property, there are around 26,000 households, and the commercial
areas boast excellent supermarkets.
• For this area, which features high ratio of category I residential zones where retail facility
development is limited, the Property is unusual in that it is zoned for retail use.
(Note) Reference: Suginami Ward Statistical Report (2016), 2. Population

3．Property Summary of Asset
Property Name
Type of AssetRegistry
Location(Note 1)StreetAccessCompletion Date
Use
StructureLand
Area(Note 1)
Floor Area
Type ofOwnershipLand

Building
Building Coverage Ratio
Floor Area Ratio
Collateral
Property Management
Company(Note 5)
Seismic Risk (PML)

Notes

Acquisition Price(Scheduled)Summit Store Naritahigashi (Land)
Real estate
1-182-2, 182-3, 182-5, 182-8, 182-9 Naritahigashi, Suginami Ward, Tokyo
1-35-12 Naritahigashi, Suginami Ward, Tokyo
13-minute walk from both Minami-Asagaya Station and Shin-Koenji Station on the Tokyo
Metro Marunouchi Line
1,607.89 ㎡(Note 2)
Ownership
90％・60％(Note 3)
300％・100％(Note 4)
None
Nomura Real Estate Partners Co., Ltd.
• The property management company, Nomura Real Estate Partners Co., Ltd. isconsidered a related party under the Act on Investment Trusts and Investment
Corporations (“Investment Trust Act”).
• Should the Fund attempt to sell the Property to a third party, the tenant of the Property
shall be granted preferential negotiation rights for a period of time regarding said sale.
¥700 million¥737 million（Based on the capitalization approach as of March 1, 2017）（Appraiser: Japan Real Estate Institute）
Appraisal NOI(Note 6)¥29 million
Leasing Status (As of April 25, 2017) （Note 7）
Total Number of Tenants
1
Appraisal Value and Method

Total Rental Income

Undisclosed

Security Deposits

Undisclosed

Occupancy Rate100％

Total Leased Floor Space

1,607.89 ㎡

Total Leasable Floor Space

1,607.89 ㎡

Occupancy Rates in the Past
（Note 8）February,2013

February,2014

February,
2015(Note 1) Location and other Items
Location (registry), and Area are based on the information in the real estate registry.

－ ２ －February,
2016

February,
2017
-

-

(Note 2) Area
The land area includes a 91.8-m2 section recognized as road based on Article 42, Paragraph 2 of the Building Standards
Law (a no less than two-meter wide strip of land measured from either side of the centerline of a roadway must be set
aside for use as a road) and another 91.8-m2 section that was converted to a road and is currently used as a private road.
(Note 3) Building Coverage Ratio
Measuring south from the road boundary on the north side of the Property, the area lying in the first 20 meters is in aneighborhood commercial zone where the fundamental building coverage ratio (BCR) is set at 80%. However, because
the land is on a corner, an additional 10% is allowed, bringing the applicable BCR up to 90%. The area past the 20-metermark is in a category I low-rise residential zone, however, and the fundamental BCR is set at 50%. But with the additional
10% allowance for being on a corner, the applicable BCR stands at 60%. The weighted average of the land area ratio isused for these calculations.
(Note 4) Floor Area Ratio
The area lying in the first 20 meters as measured south from the road boundary on the north side of the Property is300%, and the area beyond 20 meters south is 100%. The weighted average of the land area ratio is used for thesecalculations.
(Note 5) Property Management Company
Refers to the Property Management Company that is scheduled to be appointed.
(Note 6) Appraisal NOI“Appraisal NOI” indicates the annual NOI (operating income-operating expenses) described in the real estate appraisal
report with March 1, 2017 as the appraisal date.
(Note 7) Leasing Status
The total number of tenants is based on the fixed-term business-use land lease agreement that is expected to take effecton the date of the acquisition.
Total rental income and security deposits are not disclosed because the tenant has not granted permission to do so.
Total leased floor space is listed as the contracted floor space outlined in the fixed-term business-use land lease agreement.
(Note 8) Occupancy Rates in the Past
The past occupancy rates are not measured as the Property was self-owned.

4．Seller Profile
As the Fund has not obtained an agreement with the Seller, who is Japanese General Operating
Company, this information is not disclosed. There is no capital involvement, personnel involvement ortransaction involvement between the Seller and the Fund or asset management company as of today.
The Seller is not Related Parties under the Investment Trust Law of the asset management company.
5．Status of Owners
None. The current owner of the property is aJapanese General Operating Company, and there is no
special relation between the said company and the Fund or asset management company.

－ ３ －6．Broker Profile
Company Name
Nomura Real Estate Development, Co., Ltd.
Head Office
1-26-2 Nishi-Shinjuku, Shinjuku Ward, Tokyo
Representative
Seiichi Miyajima, President & CEO
Principal Business
Real Estate
Capital¥2,000 million (as of April 1, 2017)
Established
April 15, 1957
Relationships with the Fund and/or the Asset Management Company
Nomura Real Estate Development, Co., Ltd. holds 5.04% of the Fund’sinvestment units (as of February 28, 2017). As a wholly owned subsidiary of
Nomura Real Estate Holdings, Inc., which also holds 100% ownership of theCapitalAsset Management Company, Nomura Real Estate Development, Co., Ltd. isa related party of the Asset Management Company as defined in theInvestment Trust Law.
The Asset Management Company’s employees and officers are dispatched
Personalfrom Nomura Real Estate Development, Co., Ltd.
The Fund’s property management consignor is a lessee of real estate owned by
the Fund. In addition, the asset management company and the broker haveTransactions
signed an agreement to share information and a basic agreement regarding theleasing business value chain.
Nomura Real Estate Development, Co., Ltd. does not fall under the definition
Related Partyof a related party of the Fund. However, as stated above, the said company is
Statusa related party of the Asset Management Company as they are fellow
subsidiaries of a common parent company.
Commission¥21million (excluding consumption taxes and local consumption taxes)

7．Transaction with Related Parties（1）Broker
The brokerage of the transaction is a Related Party under the Investment Trust Act. Therefore, theAsset Management Company determined the transfer and the terms and conditions of the transaction,
including the commission and the other conditions to the restrictions and formalities concerning thetransactions with related parties as set forth in the Investment Trust Act and the Asset Management
Company’s bylaws and duly authorized by the Asset Management Company’s Compliance Committee
and Investment Committee pursuant to its Investment Committee Rules, Rules of Compliance,
Compliance Manual, Rules Concerning Transactions with Related Parties, and other relevant rules andguidelines.
（2）The property management company
The property management company of the Property, Nomura Real Estate Partners Co., Ltd., is a
Related Party under the Investment Trust Law, as stated above. Accordingly, the fees and other termsof the consignment of property management as well as the lease period, rental rate, and other leasing
terms related to the Property have been duly examined and authorized by the Asset Management
Company’s Compliance Committee and Investment Committee pursuant to its Investment Committee
Rules, Rules of Compliance, Compliance Manual, Rules Concerning Transactions with Related Parties,
and other relevant rules and guidelines.
8. Form of Payment, etc.
With respect to the purchase price of the Asset, Nomura Master Fund plans to make a package
payment to the Seller of the purchase price through cash on hand on the scheduled date of theacquisition.

－ ４ －9．Schedule for Acuisition
April 28, 2017Conclusion of agreement on purchase and sale for the acquisition of
the Asset, and Delivery of real estate of the Asset.

10．Forecasts of Financial Results
There is only small impact to Nomura Master Fund’s forecasts of financial results for the fiscal
period ending August 31, 2017 (March 1, 2017 to August 31, 2017), there is no revision to theforecast of financial results.

－ ５ －11．Appraisal Summary
Property Name

Summit Store Naritahigashi (Land)

Appraisal Value¥737,000,000

Appraiser

Japan Real Estate Institute

Appraisal Date

March 1, 2017
(Yen)

Amount orpercentage

Item
Capitalization approach price

Grounds

737,000,000

Price calculated by the direct capitalization
approach(1) Operating income (a)-(b)(a) Gross rental income

744,000,000
35,000,000
35,000,000(b) Losses due to vacancies, etc.
(2) Operating expenses
MaintenanceUtilities costs
Repair costs

05,602,000000Property management fees

480,000

Advertisement for leasing, etc.
Taxes

5,118,000

0Insurance premium
Other expenses(3) Net operating income from leasing
business (NOI=(1)-(2))(4) Profit through management of
temporary deposits, etc.
(5) Capital Expenditure Reserve(6) Net Cash Flow (NCF = (3)+(4)(5))

4,000
0

350,0000

4.0％

Estimated based on an investment yield of 1%.
There is no capital expenditure reserve.

Estimated with comprehensive consideration given
to the conditions of the property’s location,
existing building and existing agreements.

729,000,000

Terminal capitalization rate
3.9％Matters noted inreconciliation of indicatedvalue anddetermination ofappraisal value

There are no maintenance costs.
There are no utility costs.
There are no repair costs.
Estimated based on expected payments andpayments from similar real estate properties.
There are no advertisement costs.
Projected medium- to long-term taxes estimatedbased mainly on average taxes for fiscal 2016.
Estimated based on expected insurance premiums
and insurance premium rates for similar real estate
properties.
There are no other costs.

29,748,000

4.2％

Cost Approach Price
Ratio of land
Ratio of building

Estimated based on fair rent levels deemed stable
over the medium to long term.
Deemed unnecessary to calculate losses due tovacancies in light of the content of the agreement
and the characteristics of the lessee.

29,398,000(7) Capitalization rate
Price calculated by the Discounted Cash
Flow Approach
Discount rate

Estimated based on the income-based value
calculated using the direct capitalization approachand the income-based value calculated using thediscounted cash flow approach.
Estimated by reducing stable medium- to longterm net income by the capitalization rate.

Estimated with reference to the yield of similar
real estate transactions and comprehensive
consideration of the property's particularcharacteristics.
Estimated with reference to the yield of similar
real estate transactions and with comprehensive
consideration given to yield trends, the risk
involved with the property as an investment,
general forecasts of economic growth, future realestate prices and rent trends.

－－－
The Fund expects to establish a fixed-term business-use land lease agreement for theproperty. Due to its potential for stable profitability, the land is of investment quality.
Because it is thus classified as investment property, typical market participants that mightbuy such a property are real estate investors who possess fund procurement
capabilities.Considering the above, the Fund determined the appraisal value using an
income-based value that accurately reflects return on investment.

－ ６ －【Exhibits】
Exhibit 1

Portfolio Over View after Acquisition

Exhibit 2

Photo of the Asset

Exhibit 3

Map of the Asset*<Nomura Real Estate Master Fund, Inc> URL: http://www.nre-mf.co.jp/en/－ ７ －Exhibit 1
Portfolio Overview after Acquisition of the Asset

Asset Type

OfficeRetailLogistics

Residential

OthersGrand Total

Area (Note 1)(Scheduled)
Acquisition Price(mln)

Percentage tototal (%)
(Note 2)

Tokyo Area

348,330

37.0

Other Area

71,9307.6

Total

420,260

44.7

Tokyo Area

108,367

11.5

Other Area

65,9967.0

Total

174,363

18.5

Tokyo Area

146,930

15.6

Other Area

10,0401.1

Total

156,970

16.7

Tokyo Area

151,518

16.1

Other Area

32,527

3.5

Total

184,045

19.6

Tokyo Area

4,900

0.5

Total

4,900

0.5

-

940,538

100.0(Note 1)“Tokyo Area” refers to Tokyo Prefecture, Kanagawa Prefecture, Chiba Prefecture and Saitama Prefecture.
“Other Areas” refers to cabinet-order designated cities, prefectural capitals, and cities having a population of atleast 100,000 and their peripheral areas, excluding Tokyo Area.
(Note 2)“Percentage to Total” indicates the ratio of the total (Scheduled) acquisition price of properties for respective
uses and in respective areas to the total (Scheduled) acquisition price of the entire portfolio based on(Scheduled)acquisition prices. Furthermore, as the figures were rounded to the first decimal place, the total may
not necessarily be 100%.
(Note 3)Figures in the above table assume the successful dispositions of Ito-Yokado Higashi-Narashino Store(announced in the December 20, 2016 press release entitled “Notice Concerning Property Disposition”), thesuccessful dispositions of Mitsubishi Motors Shibuya and Mitsubishi Motors Suginami (announced in the
March 21, 2017 press release entitled " Notice Concerning Property Acquisition and Disposition"), and thesuccessful dispositions of Tennozu Park Side Building (announced in the April 4, 2017 press release entitled "Notice Concerning Property Disposition").

Exhibit 2
Photo of the AssetExhibit 3
Map of the Asset