Supplement Documentation for Press Release“Disposition of the Assets” dated today
December 20,2016

Regarding the Management of the Ito-Yokado Higashi-Narashino Store

Since receiving notice of the cancellation of the lease contract in June 2016, we have considereda wide range of options with regard to the management of this property.
Retaining
the asset

Received noticein June 2016 ofcontract
cancellation inJune 2017Marketsurvey

Leasing（Retail）
Redevelopment
ExternalSale

SponsorRedevelopment

After studying each option as detailed below, Nomura Master Fund has determined the optimal
approach is to sell the property to its sponsor on the condition that the property is redeveloped.
Study Results
The sale of the property to the sponsor predicated on redevelopment...
✔ will enable redevelopment that fully unleashes the property's potential.
·With a floor space index (as defined by the Building Standards Act) of 200% and 134% of that being used, the property harbors great
potential for increased revenue following redevelopment.
· NMF expects the property to be redeveloped into a distribution facility likely to have competitive advantages, including its transportation
infrastructure.

✔ will secure external growth opportunities in the near future.
· By selling the property while retaining the right of first refusal, NMF secures opportunities to acquire premium properties safe from biddingcompetition.

1

Regarding the Management of the Ito-Yokado Higashi-Narashino StoreNMF believes other options harbor the potential risks listed below.
Leasing（Retaining the asset）

Situation in this property’s area

✔ As a retail facility, stable operation is a concern.
· Limited number of prospective retail tenant businesses· Lowered competitiveness due to proximity of a number ofcompeting stores· Lowered revenue between leases and during renovations
RetailLogistics
Manufacturing

Redevelopment（Retaining the asset）✔ Lowered revenue could impact dividends.
· Construction delays and extended leases may negatively
impact development.

Sale for External✔ External growth opportunities could be lost due tothe sale of an asset with untapped potential.
· Amid fierce competition to acquire properties, sustainableassets could be shortsightedly transferred to external parties.

· Retail facilities are concentrated within a 1-km radius, andcompetition is heating up.
· Being 30 km from central Tokyo and 7.1 km from the Higashi-Kanto
Expressway's Chiba Kita Interchange, the location boasts excellent
transport access for a distribution center.

Main reasons NMF decided to sell the property to its sponsor oncondition of redevelopment① Fully leverages the asset's potential② Dispels risks to dividends③ Secures medium-term growth opportunities

2External Growth with property acquisition pipeline◆ NMF, which is a diversified REIT, and Nomura Real Estate Development, which possesses diverse developmental capabilities,
are working to maximize the asset’s latent value through redevelopment that entails a change in the use of the property.
◆ The sales contract provides NMF with the right of first refusal following redevelopment, thus securing a property acquisition
pipeline in the near term.（Note 1）

Transaction with the Sponsor
as for 2nd fiscal period

Large Highperformance
Logistics（Note 1）

Acquisition of “Landport Kashiwa

Development

Acquisition

Acquisition

Shonan II” developed by the Sponsor.

¥10.8 bln

Acquisition Price ：Disposition of 3 properties for thethe Ito-Yokado
HigashiNarashino Store

Strategic Property
Replacement（SPR）

Disposition

AssetManagement

Possible forredevelopment
Inadequate forredevelopment

Sponsor that are aging but inDisposition

Redevelopment
Entailing a Change in Use

excellent locations.

NOF Nihonbashi
Honcho (49%)

NOF Tameike

Disposition price ：NOF Minami
Shinjuku¥18.1 bln

With this property transfer, NMF has achieved a cumulative total of ¥39.7 billion
in sales toward its asset replacement goal of ¥50.0 billion. （Note 2）
NMF is fast-tracking SPRs in consideration of the sales market.

(Note 1) This is the plan at present and does not guarantee the content of the relevant development plans or the acquisition by NMF.

(Note 2) In the Mid- to Long-term Management Strategy announced in November 2015, NMF has positioned the next three years as the Quality phase and has set a goal of replacing property worth a totalof ¥50.0 billion during said phase.

3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 yourfinancial 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., pleaserefer to the terms and conditions of the Fund, etc.
The forward-looking statements with respect to the future financial results contained in thisdocument are based on the current facts about the investment policy of the Fund, applicable lawsand regulations, the market environment, business practice, etc., as of the preparation date of thisdocument 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 the actual 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 thetransaction price caused by, for example, changes in the price or the revenue-generating capabilityof 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 to change or cancellation without prior notice.
It is prohibited to make duplication, reproduction, distribution or use of any part or whole of theinformation contained in this document without express prior written consent.