[For Translation Purposes Only]

January 27, 2022

For Immediate Release
To Whom It May Concern
Nomura Real Estate Master Fund, Inc.
Securities Code: 3462
Shuhei Yoshida, Executive Director
Asset Management Company:
Nomura Real Estate Asset Management Co., Ltd.
Koki Miura, President & Chief Executive Officer
Inquiries:

Hiroshi Ishigooka
Executive Officer
Head of NMF Investment Management GroupTEL +81-3-3365-8767 nmf3462@nomura-re.co.jp

Notice Concerning Property Acquisition and Disposition
Nomura Real Estate Master Fund, Inc. (“NMF” or the “Fund”) announces the decision made today by Nomura
Real Estate Asset Management Co., Ltd., a licensed asset management company retained by the Fund to provide asset
management services, to acquire or dispose of a property (the “Acquisition” or the “Disposition” or collectively the“Transaction”), as described below.

1. Summary of Assets to Be Acquired/Disposed of(1) Summary of Asset to Be Acquired
Property NamePMO Hamamatsucho Ⅱ
PROUD FLAT Togoshi-Ginza(Note 2)

Date of
Purchase andSale Agreement

Use
OfficeResidential

Scheduled
Date of
Acquisition
April 1, 2022

January 28,
2022

March 1, 2022

AnticipatedAcquisition
Price (million)

Seller(Note 1)

Nomura Real
EstateDevelopment,
Co., Ltd.

Total

5,500
2,550
8,050

(Note 1)The amounts stated exclude acquisition-related costs, property tax, city planning tax, consumption tax and local consumption tax.
(Note 2)The asset to be acquired is a compartmentalized ownership building, and the Fund is to acquire a part of the building.
(Note 3)There is no brokerage involved in the acquisition of the asset to be Acquired.

The above property is referred to hereinafter as the “Assets to be Acquired.”(2) Summary of Asset to Be Disposed of
Property Name

Sundai Azamino

Use

RetailScheduled
Date ofAgreement

Scheduled
Date of
Disposition

January 31,
2022

January 31,
2022

Transferee

ScheduledTransferPrice(¥ million)

Undisclosed

Undisclosed(Note 2)

(Note 3)

- 1 -

Book
Value
(¥ million)(Note 4)1,450

Difference(¥ million)(Note 5)

Undisclosed(Note 3)

Ichibancho stear

January 27,
2022

RetailMarch 18,
2022

Undisclosed

Undisclosed(Note 2)

(Note 3)

Total

6,582

4,405
5,856

Undisclosed(Note 3)725

(Note 1)The amounts stated exclude adjustment amounts of both property taxes and city planning taxes, as well as consumption taxes
and local consumption tax, etc.
(Note 2)Undisclosed, since a consent has not obtained from the transferee.
(Note 3) The purchase price of Ichibancho stear is undisclosed since the transferee’s consent has not been obtained. Accordingly, thepurchase price of Sundai Azamino and the difference between the purchase price and the book value of both assets are also
undisclosed. The purchase price of Ichibancho stear surpasses the anticipated book value at the date of disposition and theappraisal value as of the end of the previous fiscal period (as of August 31, 2021.). While the purchase price of Sundai Azamino
is below the anticipated book value at the date of disposition, it surpasses the latest appraisal value (as of December 31, 2021)
which reflects the scheduled move-out of the tenant.
(Note 4) Anticipated book value at the date of disposition.
(Note 5) This is only a reference value which is the difference between the scheduled transfer price and the anticipated book value,
therefore, it is different from gain or loss on sale.
(Note 6)The brokerage involved in the disposition of the asset to be Disposed of is not considered a related party under the Act on
Investment Trusts and Investment Corporations (“Investment Trust Act”).
(Note 7)The asset to be Disposed of are a trust beneficial interest in trust of real estate.

The above property is referred to hereinafter as the “Assets to be Disposed of.” The Assets to be Acquired andAssets to be Disposed of may be separately referred to as the “Asset.”

2. Reasons for the Transaction
The Fund determined that the Transaction would help secure stable income and steady growth of the Fund’s
portfolio over the medium to long term, in line with the asset management objectives and policies specified in the
Fund’s Articles of Incorporation. As an external growth strategy, the Fund will mainly acquire sponsor-developed
properties and will sell properties where there are concerns about their future competitive advantage. This Transaction
is a crossover deal that crosses over sectors, taking advantage of the strengths of a diversified type REIT. Whiledisposing of retail facilities where there are concerns about future profitability, the Fund also plans to acquire recently
built and well-located offices and residential facilities developed by the sponsor, Nomura Real Estate Development Co.,
Ltd. Through the asset replacement of the Transaction, which utilizes such sponsor support, the Fund will improve thequality of the portfolio as follows. Please refer to “3. Summary of Assets to Be Acquired/Disposed of” below for
details of the reasons for Assets to be Acquired and the reasons for Assets to be Disposed of.
While a loss of 302 million yen for the fiscal period ending February 28, 2022 (September 1, 2021 to February 28, 2022),
is expected to be realized on sale of Sundai Azamino, a portion of internal reserves will be drawn down to cover thefull loss and avoid impacting distributions. At the same time, a profit of 757 million yen for the fiscal period ending
August 31, 2022 (March 1, 2022 to August 31, 2022), is expected to be realized on sale of Ichibancho stear, which will
be directed to internal reserves to cover this draw-down.
Reference: Asset age and Green certification status
Asset to be Disposed of
Sundai Azamino

Ichibancho stear

Asset age (Note 1)

13.2 years

16.1 years

Greencertification
status (Note 2)

-

-

- 2 -

Asset to be Acquired
PMO
PROUD FLAT
Hamamatsucho Ⅱ
Togoshi-Ginza
1.7 years
2.0 years
DBJ Green Building
Certification: ★★★
BELS Certification:★★

(Note 1) The asset age entered is as of the scheduled transfer date for the Asset to be Disposed of and as of the scheduled date of Acquisition
for the Asset to be Acquired.
(Note 2) The number of stars entered in the certification is as of today.

Reference: Changes in Portfolio Diversification by Property TypeGreater Tokyo Area : 83.2%
Other 0.5%

Greater Tokyo Area : 83.7%

Hotels 0.6%

other 0.5%

Retail (Residential
areas)5.4%

Retail (Residential
areas) 5.4%
Retail (Station

Retail (Station
areas)11.2%

Residential

Hotels 0.6%

areas) 10.6%

OfficeResidential

43.5%

18.7%

Office
44.0%

18.9%

Logistics

Logistics

20.1%

20.1%

After the Transaction

January 27, 2022
(Note) Based on the (scheduled) acquisition
price

3.

Summary of Assets to Be Acquired/Disposed of(1)Summary of Asset to Be Acquired
PMO Hamamatsucho Ⅱ＜Reasons for the Acquisition＞
The main strengths of the Asset to be Acquired are as follows.
・ The Asset is a six-minute walk from Hamamatsucho Station on the JR Yamanote and Keihin-Tohoku Lines andMonorail Hamamatsucho Station on the Tokyo Monorail Line, a two-minute walk from Daimon Station on the
Toei Asakusa and Oedo Lines, and a seven-minute walk from Shibakoen Station on the Toei Mita Line.
Accordingly, with access to three stations on five lines, the Asset is excellent for convenient transportation to
major business areas in central Tokyo.
・ The Asset is also located very close to JR Tokyo Station and JR Shinagawa Station, where the Shinkansen stops.
Therefore, it is very convenient for transportation to various regions in Japan and demand from tenants is
expected, including the Tokyo branches of manufacturers and companies headquartered in rural areas. In
addition, it has excellent access to Haneda Airport, so demand from foreign companies is also expected to behigh. Accordingly, stable demand from tenants can be expected.
・ Various redevelopment projects, including a large-scale redevelopment project in front of the station, areunderway in the vicinity of JR Hamamatsucho Station and the convenience for businesses and concentrationof companies are expected to be strengthened further in the future.
・ The Asset has high equipment specifications, including a standard floor ceiling height of 2,750 mm and anelectric capacity of 60 VA/m2.

(PMO Series)
・ “PMO (Premium Midsize Office)” Series is the core brand of offices developed by the sponsor, Nomura
Real Estate Development Co., Ltd. With functions and grades equivalent to large -sized buildings, this- 3 -series of office buildings features medium-sized buildings that meet the diverse business needs of thetimes.
・ In addition to boasting a range of tangible innovations and textures, this series also provides intangible
services in response to customer feedback, with community spaces, places to exchange informa tion, andother added value that is unique to the Nomura Real Estate Group.

<Summary of the Asset to be Acquired>
Property Name
Type of AssetRegistry
Location(Note 1)StreetAccessCompletion Date (Note 1)
Use (Note 1)
Structure (Note 1)
Architect
Builder
Building Inspection Agency
Land
Area (Note 1)
Floor Area
Land
Type ofOwnership
Building
Building Coverage Ratio
Floor Area Ratio
Collateral
Property Management
Company (Note 3)
Master Leasing Company(Note 4)

Type of Master Leasing (Note 4)
Seismic Risk (PML)(Note 5)

Notes

Green certification status
AnticipatedAcquisition PriceAppraisal Value and Method
Appraisal NOI (Note 6)

PMO Hamamatsucho Ⅱ
Real estate
2-101-2 Shibakoen, Minato Ward, Tokyo
2-3-6 Shibakoen, Minato Ward, Tokyo
2-minute walk from Daimon Station on the Toei Asakusa and Oedo Lines
6-minute walk from Hamamatsucho Station on the JR Yamanote and KeihinTohoku Lines and Monorail Hamamatsucho Station on the Tokyo Monorail Line
7-minute walk from Shibakoen Station on the Toei Mita Line
July 29, 2020
OfficeNine-floor steel-framed structure with flat roof
Nomura Real Estate Development Co., Ltd., First-Class Architect Office
Ichiken Co., Ltd., Tokyo OfficeUrban Housing Evaluation Center
494.24 m2
3,109.42 m2
Land lease rightOwnership
100% (Note 2)
600%
None
Nomura Real Estate Development Co., Ltd.
Nomura Real Estate Development Co., Ltd.
Pass through1.54% (Based on the Earthquake PML Appraisal Report as of January 2022 by
Sompo Risk Management Inc.)• The property management company and master leasing company, Nomura Real
Estate Development Co., Ltd., is considered a related party under the Investment
Trust Act.
• If an attempt should be made to dispose of the land lease right, associated with
the Asset’s land, to a third party, the lessor shall be granted preferential
negotiation rights for a period of time regarding ownership of the Asset’sbuilding.
DBJ Green Building Certification 2020: ★★★
BELS Certification: ★★
¥5,500 million¥5,950 million (Based on the capitalization approach as of January 1, 2022)(Appraiser: Japan Real Estate Institute)¥200 million

Leasing Status (As of January 27, 2022) (Note 7)
Total Number of Tenants

7

- 4 -

Total Rental
Income(Annual)
Security Deposits
Occupancy Rate
Total Leased Floor Space
Total Leasable Floor SpaceHistorical Occupancy Rates(Note 8)¥255 million (Including common area management fee)
¥253 million
87.5%
2,275.77 m2
2,600.88 m2
August2017—

August2018

August2019——

August2020
0%(Note 9)

August2021
87.5%(Note 1)

Location and Other Items
Location (registry), Completion Date, Use, Structure and Area are based on the information in the real estate registry.
(Note 2) Building Coverage Ratio
The Asset is located in a commercial zone where the building coverage ratio is 80% in principle. However, because theAsset is a certified fireproof building in a fire prevention zone, the applied coverage ratio is 100%.
(Note 3) Property Management Company
Refers to the property management company that is scheduled to be appointed after acquisition.
(Note 4) Master Lease
Upon the acquisition of the Asset to be Acquired, the Fund plans to enter into a master lease agreement with Nomura
Real Estate Development Co., Ltd. Under this agreement, the entire building of the Asset to be Acquired will becollectively leased to Nomura Real Estate Development Co., Ltd. for the purpose of subleasing. The master leaseagreement is a pass-through scheme, in which Nomura Real Estate Development Co., Ltd., the master lease company,
pays to the Fund the same amount as the total sum of the rent based on the lease agreements that the master lease
company concludes with end tenants.
(Note 5) PML (Probable Maximum Loss)PML shows the probable losses which would be caused by a maximum size earthquake (a great earthquake which is
expected to occur once every 475 years, or with 10% probability of once every 50 years) during the anticipated periodof use (i.e. 50 years as expected life time of a standard building), as a percentage of the expected recovery cost to thereplacement cost.
(Note 6) Appraisal NOI“Appraisal NOI” is the annual NOI (operating income - operating expenses) described in the real estate appraisal reportwith January 1, 2022 as the appraisal date.
(Note 7) Leasing Status“Total Number of Tenants” is the total number of end tenants actually leasing space in the building of the Asset to
be Acquired as of today.
“Total Rental Income” is the amount obtained by multiplying by 12 the monthly rent and common area charges statedin the lease agreements by the total number of end tenants as of today actually leasing space in the building of theAsset (rounded down to the nearest million yen). The figure does not include any other incidental rent that may be
agreed upon in connection with the said lease agreements, such as parking fees, signboard fees and warehouse fees.
“ Security Deposits” indicates the amount of security and other deposits specified in the aforementioned leaseagreements (rounded down to the nearest million yen).
“Occupancy Rate” is calculated by dividing Total Leased Floor Space as of today by Total Leasable Floor Space.
“Total Leased Floor Space” indicates the total floor space leased to end tenants as of today.
“Total Leasable Floor Space” is the total floor space of offices, retail facilities, logistics facilities, residential facilities,
hotels, etc. within the Asset to be Acquired that can be leased as of today (If the common area, etc. is leased, the floor
space thereof is included).
(Note 8) Historical Occupancy Rates
There are no applicable occupancy rates for the end of August 2019 and before because the building was not yet
completed. The historical occupancy rates are based on the information from the seller.
(Note 9) The occupancy rate as of the end of August 2020 is set at 0% because the leasing activity was scheduled to start on
September 1, 2020, although the construction was comleted.

PROUD FLAT Togoshi-Ginza＜Reasons for the Acquisition＞
The main strengths of the Asset to be Acquired are as follows.
・ The Asset is a four-minute walk from Togoshi-ginza Station on the Tokyu Ikegami Line and a six-minute walkfrom Togoshi Station on the Toei Asakusa Line. Using these stations, it has easy access to the business areasand commercial areas of Shinagawa, Shinbashi and Gotanda making the Asset excellent for convenienttransportation.
・ The Asset is well located with a four-minute walk from Togoshi-ginza Station, the nearest station. The Togoshiginza Shopping Street, which extends east and west of the station, has an abundance of convenient facilities- 5 -necessary for living, such as supermarkets and drugstores. Therefore, demand can be expected from single
workers and DINKs who seek convenient living conditions and superior living environments.

(PROUD FLAT Series)
・ “PROUD FLAT” Series is the core brand of residential facilities developed for rental by the sponsor, Nomura
Real Estate Development Co., Ltd. Utilizing the information network and know-how of the Nomura Real EstateGroup’s housing development and sales business, this rental housing series was developed to provide location
choices suited to urban rental housing.
・ In addition to simple yet beautiful and refined designs, these buildings combine solid quality control withappropriate operation and management, with attention to detail in all aspects of construction, facilities, disaster
preparedness and security based on the extensive know-how of the Nomura Real Estate Group.

<Summary of the Asset to be Acquired>
Property Name
Type of AssetRegistry
Location(Note 1)StreetAccessCompletion Date (Note 1)
Use (Note 1)
Structure (Note 1)
Architect
Builder
Building Inspection Agency
Land
Area (Note 1)
Floor Area
Land
Type ofOwnership
Building
Building Coverage Ratio
Floor Area Ratio
Collateral
Property Management
Company (Note 6)
Master Leasing Company(Note 7)

Type of Master Leasing(Note 7)

Seismic Risk (PML)(Note 8)
Notes
AnticipatedAcquisition PriceAppraisal Value and Method
Appraisal NOI (Note 9)

PROUD FLAT Togoshi-Ginza
Real estate2-619-2 Hiratsuka, Shinagawa Ward, Tokyo
2-11-1 Hiratsuka, Shinagawa Ward, Tokyo
4-minute walk from Togoshi-ginza Station on the Tokyu Ikegami Line
6-minute walk from Togoshi Station on the Toei Asakusa Line
February 18, 2020
Apartment and Store
Eleven-floor steel-reinforced concrete structure with flat roof
Form Architect Planning Co., Ltd.
Daioh Shinyo Co., Ltd.
Ippan Zaidan Hojin Jutaku Kinyu Fukyu Kyokai
557.74 m2 (Note 2)
2,839.75 m2 (Note 3)
Right of site
Compartmentalized ownership (96.2%)
85.51% (Note 4)
432.69% (Note 5)
None
Nomura Real Estate Partners Co., Ltd.
Nomura Real Estate Partners Co., Ltd.
Pass through
4.65% (Based on the Earthquake PML Appraisal Report as of January 2022 by
Sompo Risk Management Inc.)
・The property management companies, Nomura Real Estate Partners, Co., Ltd., isconsidered a related party under Investment Trust Act.
¥2,550 million¥2,640 million (Based on the capitalization approach as of January 1, 2022)(Appraiser: The Tanizawa Sogo Appraisal Co., Ltd.)¥108 million

Leasing Status (As of December 31, 2021) (Note 10)
Total Number of Tenants

1

- 6 -

Total Rental
Income(Annual)
Security Deposits
Occupancy Rate
Total Leased Floor Space
Total Leasable Floor SpaceHistorical Occupancy Rates(Note 11)¥138 million (Including common area management fee)
¥20 million
96.7%
2,200.23 m2
2,276.02 m2
August2017—

August2018

August2019—(Note 1)—

August2020
88.3%

August2021
91.4%

Location and Other Items
Location (registry), Completion Date, Use, Structure and Area are based on the information in the real estate registry.
(Note 2) Land Area
“Land Area” is the total area of the entire building site, and the share of the right of site (co-ownership interest) is
227,602/236,682.
(Note 3) Floor Area
“Floor Area” is the total area of the entire building. The exclusive area of the compartmentalized ownership to beacquired by the Fund is 2,180.59 m2.
(Note 4) Building Coverage Ratio
The building coverage ratio is 80% for the 432.61 m2 of this Asset’s land area classified as commercial zone, and 60%
for the 125.13 m2 classified as semi-industrial zone. A mitigation ratio of +10% (the ratio designated for corner lots
by the specified government agency) is applied to the weighted average figures that reflect the proportions of the twoparts.
(Note 5) Floor Area Ratio
The entire property spans both commercial and semi-industrial zones, for which the mandated floor area ratios differ,
namely, they are 500% and 200%, respectively. Taking this into account, floor area ratio for the entire property isdetermined on a weighted average basis that reflects the proportions of the two parts.
(Note 6) Property Management Company
Refers to the property management company that is scheduled to be appointed after acquisition.
(Note 7) Master Lease
Upon the acquisition of the Asset to be Acquired, the Fund plans to enter into a master lease agreement with Nomura
Real Estate Partners Co., Ltd. Under this agreement, the entire building of the Asset to be Acquired will be collectively
leased to Nomura Real Estate Partners Co., Ltd. for the purpose of subleasing excluding the exclusive area subject tothe self-use by other compartmentalized owners. The master lease agreement is a pass-through scheme, in which
Nomura Real Estate Partners Co., Ltd., the master lease company, pays to the Fund the same amount as the total sumof the rent based on the lease agreements that the master lease company concludes with end tenants.
(Note 8) PML (Probable Maximum Loss)PML shows the probable losses which would be caused by a maximum size earthquake (a great earthquake which is
expected to occur once every 475 years, or with 10% probability of once every 50 years) during the anticipated periodof use (i.e. 50 years as expected life time of a standard building), as a percentage of the expected recovery cost to thereplacement cost.
(Note 9) Appraisal NOI“Appraisal NOI” is the annual NOI (operating income - operating expenses) described in the real estate appraisal reportwith January 1, 2022 as the appraisal date.
(Note 10) Leasing Status“Total Number of Tenants” is stated as “1” because, for the purpose of subleasing, all of the rooms are leased as a
block, and then the lessee under such lease agreement (the master lease agreement) sub-leases each of the rooms to
the end tenants.
“Total Rental Income” is the amount obtained by multiplying by 12 the monthly rent and common area charges statedin the lease agreements by the total number of end tenants as of December 31, 2021, actually leasing space in thebuilding of the Asset (rounded down to the nearest million yen). The figure does not include any other incidental rent
that may be agreed upon in connection with the said lease agreements, such as parking fees, signboard fees andwarehouse fees.
“ Security Deposits” indicates the amount of security and other deposits specified in the aforementioned leaseagreements (rounded down to the nearest million yen).
“Occupancy Rate” is calculated by dividing Total Leased Floor Space as of December 31, 2021, by Total Leasable
Floor Space.
“Total Leased Floor Space” indicates the total floor space leased to end tenants as of December 31, 2021.
“Total Leasable Floor Space” is the total floor space of offices, retail facilities, logistics facilities, residential facilities,
hotels, etc. within the Asset that can be leased as of December 31, 2021 (if the common area, etc. is leased, the floor
space thereof is included).
(Note 11) Historical Occupancy Rates
There are no applicable occupancy rates for the end of August 2019 and before because the building was not yet
completed. The historical occupancy rates are based on the information from the seller.

- 7 -(2)Summary of Asset to Be Disposed of
Sundai Azamino＜Reasons for the Disposition＞
The Asset to be Disposed of has been occupied entirely by the same tenant since acquisition and has maintained highprofitability, but the tenant plans to move out on November 28, 2023, prior to the lease expiry. In light of the current rent
levels and increase in future repair costs associated with the age of the Asset, and after full consideration of such things as
uncertainly surrounding securing a new tenant and risk of decrease in income, the Fund has decided that disposal of theAsset, even at a price below book value, would be more advantageous to the Fund over the medium to long term thanmaintaining ownership. This is because the sale terms would exceed the Appraisal Value (with December 31, 2021, as theappraisal date), which is based on the move-out of the tenant.

＜Summary of the Asset to be Disposed of＞
Property Name
Type of Asset
TrusteeTerm of Trust Agreement
Registry
Location(Note 1)Street (Note 2)
AccessCompletion Date (Note 1)
Use (Note 1)
Structure (Note 1)
Area (Note 1)

Sundai Azamino
Trust beneficiary interest in real estate
Mitsubishi UFJ Trust and Banking Corporation
From November 28, 2008 to June 30, 2023
1-4-13 Azamino, Aoba Ward, Yokohama City, Kanagawa Prefecture
1-4-13 Azamino, Aoba Ward, Yokohama City, Kanagawa Prefecture
4-minute walk from Azamino Station on the Tokyu Den-en-toshi Lineand Yokohama Municipal Subway Line
November 11, 2008
Training center
Five-floor steel-framed structure with flat roofLand

742.63 m2

Floor Area

2,145.85 m2

LandType ofOwnership
Building
Building Coverage Ratio
Floor Area Ratio
Collateral
Property Management Company
Master Leasing Company
Type of Master Leasing
Seismic Risk (PML)(Note 3)
Notes
Acquisition Price
Scheduled Transfer PriceBook Value(Note 5)
Difference
Appraisal Value and Method (Note 6)

Ownership
Ownership
80%
300%
None
Nomura Real Estate Partners Co., Ltd.
4.89% (Based on the Earthquake PML Appraisal Report as of
September 2021 by Sompo Risk Management Inc.)
・The property management companies, Nomura Real Estate Partners,
Co., Ltd., are each considered a related party under Investment TrustAct.
¥1,700 million
Undisclosed(Note 4)¥1,450 million
Undisclosed(Note 4)¥1,170 million (Based on the capitalization approach as of December
31, 2021) (Appraiser: Japan Real Estate Institute)¥55 million

Appraisal NOI (Note 7)
Leasing Status (As of January 27, 2022) (Note 8)
Total Number of Tenants
1
Total Rental Income(Annual)
Undisclosed
Security Deposits
Undisclosed
Occupancy Rate
100.0%- 8 -Total Leased Floor Space
Total Leasable Floor SpaceHistorical Occupancy Rates(Note 1)
(Note 2)
(Note 3)(Note 4)(Note 5)(Note 6)(Note 7)(Note 8)2,286.47 m2
2,286.47 m2
August2017

August2018

August2019

August2020

August2021

100.0%

100.0%

100.0%

100.0%

100.0%

Location and Other Items
Location (registry), Completion Date, Use, Structure and Area are based on the information in the real estate registry.
Street Address
As the Street Address is not indicated officially, the building location in the real estate registry is noted.
PML (Probable Maximum Loss)PML shows the probable losses which would be caused by a maximum size earthquake (a great earthquake which is expected
to occur once every 475 years, or with 10% probability of once every 50 years) during the anticipated period of use (i.e. 50
years as expected life time of a standard building), as a percentage of the expected recovery cost to the replacement cost.
As the purchase price of Ichibancho stear is undisclosed as the transferee’s consent has not been obtained, the purchaseprice of the Asset and the difference between the purchase price and the book value of the Asset are also undisclosed.
While the purchase price of the Asset is below the anticipated book value at the date of disposition, it surpasses thelatest appraisal value (as of December 31, 2021) which reflects the scheduled move-out of the asset tenant.
Book Value
Anticipated book value at the date of disposition.
Appraisal Value“Appraisal Value” is the appraisal value described in the real estate appraisal report with December 31, 2021, as theappraisal date. This Appraisal Value reflects the move-out of the Asset tenant planned for November 28, 2023.
Appraisal NOI“Appraisal NOI” is the annual NOI (operating income - operating expenses) described in the real estate appraisal reportwith December 31, 2021 as the appraisal date.
Leasing Status“Total Number of Tenants” is the total number of end tenants actually leasing space in the building of theProperty.
“Total Rental Income (annual)” and “Security Deposits” are not disclosed because consent of the end tenant
to such disclosure has not been obtained.
“Total Leased Floor Space” indicates the total floor space leased to end tenants as of today.
“Total Leasable Floor Space” is the total floor space of offices, retail facilities, logistics facilities, residential
facilities, hotels, etc. within the Asset that can be leased as of today (if the common area, etc. is leased, thefloor space thereof is included).

Ichibancho stear＜Reasons for the Disposition＞
The Occupancy Rate (50.7% as of January 27, 2022) of the Asset to be Disposed of has fallen due to the impact of
the spread of COVID-19 and other factors, so securing a new tenant for the lease is an immediate issue. Under thesecircumstances, and despite the Asset having an excellent location, in light of recent changes in the environment surrounding
retail tenants and neighboring retail market environments, and after full consideration of such things as a protracted leasing
period and risk of a future decrease in income, the Fund has decided to dispose of the Asset.

＜Summary of the Asset to be Disposed of＞
Property Name
Type of Asset
TrusteeTerm of Trust Agreement
Registry
Location(Note 1)StreetAccessCompletion Date (Note 1)
Use (Note 1)
Structure (Note 1)

Ichibancho stear
Trust beneficiary interest in real estateMizuho Trust & Banking Co., Ltd.
From January 31, 2005 to June 30, 2023
3-8-4 (etc.) Ichibancho, Aoba Ward, Sendai City, Miyagi Prefecture
3-8-8 Ichibancho, Aoba Ward, Sendai City, Miyagi Prefecture
7-minute walk from JR Sendai Station
3-minute walk from Hirose-dori Station on the Sendai Municipal Subway
Line
February 20, 2006
Store
Four-floor steel-framed steel-reinforced concrete structure with flat roof
and one underground level- 9 -Area (Note 1)Land

2,098.18 m2

Floor Area

6,637.53 m2

Land
Type ofOwnership
Building
Building Coverage Ratio
Floor Area Ratio
Collateral
Property Management Company
Master Leasing Company
Type of Master Leasing
Seismic Risk (PML)(Note 3)
Notes
Acquisition Price
Scheduled Transfer PriceBook Value(Note 5)
Difference
Appraisal Value and Method

Ownership
Ownership
100% (Note 2)
600%
None
Nomura Real Estate Retail Properties Co., Ltd.
2.42% (Based on the Earthquake PML Appraisal Report as of
September 2021 by Sompo Risk Management Inc.)・ The property management companies, Nomura Real Estate Retail
Properties, Co., Ltd., are each considered a related party under
Investment Trust Act.
¥4,700 million
Undisclosed(Note 4)¥4,405 million
Undisclosed(Note 4)¥5,270 million (Based on the capitalization approach as of August 31,2021) (Appraiser: The Tanizawa Sogo Appraisal Co., Ltd.)¥227 million

Appraisal NOI (Note 6)
Leasing Status (As of January 27, 2022) (Note 7)
Total Number of Tenants
5
Total Rental Income(Annual)¥292 million (Including common area management fee)
Security Deposits¥271 million
Occupancy Rate
50.7%
Total Leased Floor Space
2,345.73 m2
Total Leasable Floor Space
4,627.35 m2
AugustAugustAugustAugust
2017
2018
2019
2020
Historical Occupancy Rates
92.3%

100.0%(Note 1)100.0%

93.8%

August2021
53.7%

Location and Other Items
Location (registry), Completion Date, Use, Structure and Area are based on the information in the real estate registry.
(Note 2) Building Coverage Ratio
The Asset is located in a commercial zone where the building coverage ratio is 80% in principle. However, because theAsset is a certified fireproof building in a fire prevention zone, the applied coverage ratio is 100%.
(Note 3) PML (Probable Maximum Loss)PML shows the probable losses which would be caused by a maximum size earthquake (a great earthquake which is expected
to occur once every 475 years, or with 10% probability of once every 50 years) during the anticipated period of use (i.e. 50
years as expected life time of a standard building), as a percentage of the expected recovery cost to the replacement cost.
(Note 4) The purchase price of the Asset is undisclosed as the assignee’s consent has not been obtained. Accordingly, thedifference between the purchase price and the book value of the asset is also undisclosed. The purchase price of theAsset surpasses the anticipated book value at the date of disposition and the appraisal value as of the end of theprevious fiscal period (as of August 31, 2021.)(Note 5) Book Value
Anticipated book value at the date of disposition.
(Note 6) Appraisal NOI“Appraisal NOI” is the annual NOI (operating income - operating expenses) described in the real estate appraisal reportwith August 31, 2021 as the appraisal date.
(Note 7) Leasing Status“Total Number of Tenants” is the total number of end tenants actually leasing space in the building of the Property.
“Total Rental Income” is the amount obtained by multiplying by 12 the monthly rent and common area charges stated in
the lease agreements by the total number of end tenants as of today actually leasing space in the building of the Asset(rounded down to the nearest million yen). The figure does not include any other incidental rent that may be agreed uponin connection with the said lease agreements, such as parking fees, signboard fees and warehouse fees.
“Security Deposits” indicates the amount of security and other deposits specified in the aforementioned lease agreements(rounded down to the nearest million yen).
“Total Leased Floor Space” indicates the total floor space leased to end tenants as of today.

- 10 -

“Total Leasable Floor Space” is the total floor space of offices, retail facilities, logistics facilities, residential facilities, hotels,
etc. within the Asset that can be leased as of today (if the common area, etc. is leased, the floor space thereof is included).

4. Profile of Seller of the Asset to be Acquired
Company Name

Nomura Real Estate Development Co., Ltd.

Head Office

1-26-2 Nishi-Shinjuku, Shinjuku-ku, Tokyo

Representative

Daisaku Matsuo, President & CEO

Principal Business

Real Estate

Capital¥2,000 million (as of April 1, 2021)

Established

April 15, 1957

Net Assets¥193.0 billion (as of March 31, 2021)

Total Assets¥1,432.0 billion (as of March 31, 2021)

Major Shareholder
Nomura Real Estate Holdings, Inc. (100.0%)(Shareholding Ratio)
Relationships with the Fund and/or the Asset Management Company and the Seller

CapitalPersonal

Transactions

Related Party
Status

Nomura Real Estate Development Co., Ltd. holds 4.47% of the Fund’s investment
units (as of August 31, 2021). As a wholly owned subsidiary of Nomura Real Estate
Holdings, Inc., which also holds 100% interests in the shares of the AssetManagement Company, Nomura Real Estate Development Co., Ltd. is a related partyof the Asset Management Company as defined in the Investment Trust Act.
The Asset Management Company’s employees and officers are seconded from
Nomura Real Estate Development Co., Ltd.
Nomura Real Estate Development Co., Ltd. is a property management company of
the Fund and a lessee of real estate properties owned by the Fund. Moreover, theAsset Management Company has entered into an agreement on provision of
information and a basic agreement on the leasing value chain with the said company.
Nomura Real Estate Development Co., Ltd. does not fall under the definition of a
related party of the Fund for the accounting purpose. However, the said company isa related party of the Asset Management Company as it is a subsidiary of a common
parent company, as stated above.

5. Profile of Transferee of the Asset to be Disposed of
As the Fund has not obtained consent of the Purchaser of the Asset, which is a domestic joint ‐stockcompany and consolidated company, this information is not disclosed. As of today, neither the Fund nor the
Asset Management Company has any notable capital, personnel or transactional relationship with the Purchaser,
and the Purchaser is not a related party of either the Fund or the Asset Management Company.

6. Status of Owner of the Asset to be Acquired
Status of Owner

Current Owner and/or Trustee

Company Name

Nomura Real Estate Development
Co., Ltd.

Relationship with Parties

Please refer to “4. Profile of Seller

with Special Interestof the Asset to be Acquired” above

Background/Reasons for
Acquisition, etc.

For development for later sale- 11 -

Previous Owner and/or Trustee———

Acquisition Price(Including Other RelatedExpenses)Acquisition Date—

(Note)———(Note) Omitted because, for the land, the current owner owned for more than one year, and, for the building, there is no previous owner.

7. Transactions with Related Parties(1) Transactions related to the acquisition of the Asset to be Acquired
The acquisition of the Asset to be Acquired is considered to fall under transactions with a related party underthe Investment Trust Act as stated above. Accordingly, the acquisitions of each property, the acquisition prices,and other relevant terms have been duly examined and authorized by the Asset Management Company’s
compliance committee and investment committee pursuant to its investment committee rules, rules ofcompliance, compliance manual, rules concerning transactions with related parties, and other relevant internal
rules and guidelines.
(2) Transactions related to the disposition of the Asset to be Disposed of
There is no transactions with related parties.
(3) The property management and master lease transactions of PMO Hamamatsucho II
The property management company and master leasing company of PMO Hamamatsucho II, Nomura Real
Estate Development Co., Ltd., is considered a related party under the Investment Trust Act as stated above.
Accordingly, the fees and other terms of the consignment of property management, as well as the lease period,
rental rate, and other leasing terms, related to PMO Hamamatsucho II have been duly examined and authorized
by the Asset Management Company’s compliance committee and investment committee pursuant to relevantinternal rules and guidelines.
(4) The property management and master lease transactions of PROUD FLAT Togoshi-Ginza
The property management company and master leasing company of PROUD FLAT Togoshi-Ginza, Nomura
Real Estate Partners Co., Ltd., is considered a related party under the Investment Trust Act as stated above.
Accordingly, the fees and other terms of the consignment of property management, as well as the lease period,
rental rate, and other leasing terms, related to PROUD FLAT Togoshi-Ginza have been duly examined andauthorized by the Asset Management Company’s compliance committee and investment committee pursuant torelevant internal rules and guidelines.
Since none of the transactions described in (1), (3) and(4) above falls under the category of transactions between
the Fund and a related party of an asset management company as set forth in Article 201-2, Paragraph 1 of theInvestment Trust Act, the approval of the Board of Directors of the Fund has not been obtained.

8. Form of Payment, etc.
(1) Form of Payment
Regarding the disposition, on the scheduled sale date, the Fund will receive from the seller the entire purchase priceof the Property to Be Sold in a lump sum. The Fund plans to use the cash obtained through the sale of the Property
for portfolio management, including the repayment of borrowings and the acquisition of properties.
Regarding the acquisition, The Fund will complete settlement by a lump-sum payment on the date of acquisition
by paying the agreed price for the property in full to the seller using cash on hand.
(2) Impact on the Financial Position of the Fund in Case of a Failure to Fulfill Our Forward Commitment
The sale agreement associated with the Acquisition (the “Sale Agreement”) is considered to be a forward
commitment (Note) as stipulated in the Financial Services Agency’s Comprehensive Guidelines for Supervision of- 12 -

Financial Instruments Business Operators, etc. The Sale Agreement includes the provisions below.
(Note)

Defined as purchase and sale agreements or similar contract which are signed one month or more in advance of the actual
date on which the purchase price is paid and the property is transferred to the purchaser.

i.

Under the Sale Agreement, procuring funds through the issuance of new investment units by theacquisition date is set forth as a condition precedent for the obligation of the buyer.
Where there is material breach of terms of the contract by the seller or buyer (hereinafter such seller orbuyer shall be referred to as the “violating party”), the other party may cancel the contract if such breachis not remedied after the passage of a prescribed period following the date of the non-violating party
issuance of a notification requiring the violating party to perform its obligation or if such breach isobjectively and reasonably deemed impossible to remedy.
If the contract is cancelled in accordance with paragraph ii) above, the non-violating party may require theviolating party to pay a penalty charge that is equivalent to 20% of the acquisition price.The penalty charge
is the liquidated damages amount, and neither party may request an increase or decrease of the penalty
charge irrespective of whether the monetary damage actually suffered by the canceling party due to thecancellation exceeds or fails to reach an amount that is equivalent to 20% of the acquisition price.
The buyer may negotiate with the seller to change the acquisition price if the buyer has obtained an
appraisal report of the Asset to be Acquired by the scheduled date of acquisition and the appraisal value
shown in the appraisal report goes below the acquisition price. In such case, the buyer may cancel thecontract without any indemnification or compensation, if the parties have failed to agree on theacquisition price by the scheduled date of acquisition.

ii.

iii.

iv.

9. Schedule for the Transaction
January 27, 2022

Conclusion of purchase and sale agreements for the disposition of Ichibancho
stear

January 28, 2022

Conclusion of purchase and sale agreements for the acquisition of the Assets

January 31, 2022

Conclusion of purchase and sale agreements for the disposition of Sundai
Azamino
Delivery of trust beneficiary rights of Sundai Azamino

March 1, 2022

Acquisition of PROUD FLAT Togoshi-Ginza

March 18, 2022

Delivery of trust beneficiary rights of Ichibancho stear

April 1, 2022

Acquisition of PMO Hamamatsucho Ⅱ

10. Outlook
There is currently no revision to the forecast of financial results for the fiscal period ending February 28, 2022
(September 1, 2021 to February 28, 2022) due to this Transaction. This is because, while a loss of 302 million yen
for the fiscal period is expected to be realized on sale of Sundai Azaminokou, a portion of internal reserves
equivalent to the amount of the loss will be drawn down.
There is also currently no revision to the forecast for the fiscal period ending August 31, 2022 (March 1, 2022 toAugust 31, 2022). This is because the impact of the Transaction on operation of the entire portfolio for the fiscal
period is minimal. Furthermore, a profit of 757 million yen for the fiscal period is expected to be realized on saleof Ichibancho stear, from which an amount equivalent to the above loss of 302 million yen will be directed tointernal reserves to cover the amount appropriated from internal reserves for the fiscal period ending February 28,
2022. In consideration of stabilizing medium- to long-term distributions, any remaining amount will be directed
to dividends as part of distributions or internal reserves for the fiscal period ending August 31, 2022.
- 13 -

Appraisal Summary(1)Asset to Be Acquired
Property Name

Hamamatsucho Ⅱ

Appraisal Value¥5,950,000,000

Appraiser

Japan Real Estate Institute

Appraisal Date

January 1, 2022
(Yen)

Item
Capitalization Approach Price
Price Calculated by the Direct
Capitalization Approach(1) Operating Income (a)-(b)(a) Gross Rental Income(b) Losses due to Vacancies,etc.
(2) Operating Expenses
Maintenance Costs
Utilities Costs
Repair Costs
Property Management Fees
Advertisement for Leasing
Costs, etc.
Taxes

Amount orPercentage

Grounds

5,950,000,000
6,070,000,000
268,783,000
282,834,000
14,051,000
16,600,000
8,690,000
1,343,000
6,720,000
2,168,000
10,539,000
198,000

Other Expenses

21,600,000

Temporary Deposits, etc.

(5) Capital Expenditure Reserve(6) Net Cash Flow (NCF =(3)+(4)-(5))(7) Capitalization Rate
Price Calculated by the Discounted Cash
Flow ApproachCalculated based on appropriate rent levels
recognized as stable over the medium to long term.
Calculated assuming a stable medium- to long-term
occupancy rate.

67,858,000

Insurance Premium(3) Net Operating Income from
Leasing Business (NOI=(1)-(2))(4) Profit through Management ofCalculated taking into account the Capitalization
Approach Price determined using both the direct
capitalization approach and the discounted cash flow
approach.
Calculated by reducing the stable medium- to longterm net cash flow by the capitalization rate.

Calculated based on scheduled maintenance andmanagement costs and costs at similar properties.
Calculated based on actual costs at similar properties
and the occupancy rate of the leased portion of theproperty.
Calculated based on costs at similar properties and theaverage annual maintenance and renewal fees given in
the engineering report.
Calculated based on agreed-upon fee rates and fee
rates for similar properties.
Calculated as an annualized amount based onassumed tenant turnover rates.
Calculated based on standard taxable values in the2021 tax year.
Calculated based on insurance quotes and thepremiums of similar properties.
Calculated as fees paid for the use of land andadjacent parking lots.

200,925,000
2,601,000

Calculated based on an investment yield of 1.0%.

3,300,000

Calculated based on the assumption of average
allocations each period, capital expenditure levels at
similar properties, the building’s age and the averageannual maintenance and renewal fees given in theengineering report.

200,226,000
3.3%
5,820,000,000- 14 -

Discount Rate

2.9%

Terminal Capitalization Rate
3.5%

Cost Approach Price

Calculated based on a comprehensive considerationof such factors as the yield on investment in similar
properties and the property’s specific characteristics.
Calculated based on a comprehensive considerationof such factors as the yield on investment in similarbuildings, the probable future movement of the yield
on investment, risks of the property as an investment,
general forecasts of the economic growth rate andprice trends in real estate and rents.

4,810,000,000

Ratio of Land
Ratio of Building

Matters Noted in Reconciliation ofIndicated Value and Determinationof Appraisal Value

77.2%
22.8%
The Asset is a two-minute walk from Daimon Station on the Toei Asakusa and Oedo
Lines, and a six-minute walk from Hamamatsucho Station on the JR Yamanote andKeihin-Tohoku Lines and Shibakoen Station on the Toei Mita Line, and since it isaccessible from multiple lines, it is an excellent location offering convenienttransportation to various places in central Tokyo as well as Haneda Airport.
The Building is newly-built and designed as a high-value-added office building,offering superior quality and high-standard facilities compared to the office buildingsof similar size. In view of the above factors, the appraisal value was determined.

Property NamePROUD FLAT Togoshi-Ginza

Appraisal Value¥2,640,000,000

Appraiser

The Tanizawa Sogo Appraisal Co., Ltd.

Appraisal Date

January 1, 2022
(Yen)

Item

Capitalization Approach Price
Price Calculated by the Direct
Capitalization Approach(1) Operating Income (a)-(b)(a) Gross Rental Income(b) Losses due to Vacancies,etc.
(2) Operating Expenses
Maintenance Costs

Amount orPercentage

Grounds

2,640,000,000

2,670,000,000
137,258,654
144,211,514
6,952,860

An income-based value was calculated using thecapitalization approach by using the value calculatedusing the discounted cash flow approach as thebaseline and evaluating it using the direct
capitalization approach.
Calculated by reducing a standard level of net cash
flow by the capitalization rate.
Calculated based in part on market rent levels.
Calculated based on the standard stable medium- tolong-term vacancy rate.

29,524,230

3,735,188

Calculated based in part on the management rules andmanagement agreement.
Calculated based on the balance results, etc.
Repair costs for the building are calculated based on
restoration costs, with reference to the Engineering
Report, the building’s age, costs recorded at similar
properties and other factors.
Calculated based on the PM/BM service term sheet.

3,886,503

Calculated based on the PM/BM service term sheet.

Taxes

7,710,100

Calculated based on materials for fiscal 2021.

Insurance Premium

139,540

Calculated based on insurance quotes.

Other Expenses

4,392,277

Calculated based on the balance results, etc.

Utilities Costs

7,374,305
136,561

Repair Costs
2,149,756
Property Management Fees
Advertisement for Leasing
Costs, etc.

- 15 -

(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))(7) Capitalization Rate

107,734,424
186,889

Calculated based on an investment yield of 1.0%.

1,160,000

Calculated with reference to the Engineering Report,
the building’s age, amounts recorded at similar
properties and other factors.

106,761,313

4.0%

Price Calculated by the Discounted Cash
Flow Approach

2,630,000,000

Discount Rate

4.1%

Terminal Capitalization Rate

4.2%

Cost Approach Price

Calculated based mainly on the yield of similar rental
condominium transactions, with reference to thecharacteristics of the area surrounding the property,
the property’s particular characteristics and otherfactors.

Calculated with reference to the individual risks forthe property and other factors.
Calculated based on the capitalization rate, withconsideration given to levels of future uncertainty.

2,540,000,000

Ratio of Land
Ratio of Building

Matters Noted in Reconciliation ofIndicated Value and Determinationof Appraisal Value

75.2%
24.8%
The Property consists of a high-rise condominium and its site and is approximately
4-minute walk from “Togoshi-ginza” Station on the Tokyu Ikegami Line. The
condominium is relatively new and is of a grade required for rental condominiums,
satisfying the high standards required for rental-condominium facilities. In addition,
the Property is adjacent to the areas such as of Shinagawa, Osaki, Gotanda, etc. where
the business functions are concentrated, and is in close proximity to the city center.
Therefore, it can be judged that the Property has reasonable competitiveness, mainly
among single persons and DINK households that are oriented toward proximity to
the city center and convenience.
In view of the above factors, the appraisal value was determined.

(2)Asset to Be Disposed of
Property Name
Appraisal Value
Appraiser
Appraisal Date

Sundai Azamino¥1,170,000,000
Japan Real Estate InstituteDecember 31, 2021
(Yen)

Item
Capitalization Approach Price
Price
Calculatedbythe
DirectCapitalization Approach(1) Operating Income (a)-(b)(a) Gross Rental Income(b) Losses due to Vacancies,etc.
(2) Operating Expenses
Maintenance Costs

Amount orPercentage
1,170,000,000
1,180,000,000

Grounds
Calculated taking into account equally the
Capitalization Approach Price determined using
both the direct capitalization approach and thediscounted cash flow approach.
Calculated by reducing the stable medium- to longterm net cash flow by the capitalization rate.

Undisclosed
Undisclosed
Undisclosed(Note)

Undisclosed
Undisclosed- 16 -

Utilities Costs

Undisclosed

Repair Costs

Undisclosed

Property Management Fees

Undisclosed

Advertisement for Leasing
Costs, etc.

Undisclosed

Taxes

Undisclosed

Insurance Premium

Undisclosed

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))(7) Capitalization Rate

Undisclosed
55,829,000
Undisclosed
Undisclosed
50,651,000

4.3％

Price Calculated by the Discounted Cash
Flow Approach

4.4％
Terminal Capitalization Rate
4.8％

57.4％

Ratio of Building

42.6％

Indicated Value and Determinationof Appraisal Value

Calculated based on a comprehensive considerationof such factors as the yield on investment in similar
properties
andtheproperty’s
specific
characteristics.
Calculated based on a comprehensive considerationof such factors as the yield on similar propertytransactions, the probable future movement of theyield on investment, risks of the property as aninvestment, general forecasts of the economic
growth rate and price trends in real estate and rents.

1,130,000,000

Ratio of Land
Matters Noted in Reconciliation of

Calculated based on such factors as the yield on
investment in similar properties, future
uncertainties, and yield on similar propertytransactions while adjusting spread according to theproperty’s
locational
conditions,building
conditions, lease agreement conditions and anyother conditions.

1,160,000,000

Discount Rate

Cost Approach Price(Note)

Notice of cancellation has been presented by the tenant currently leasing the entire
building on the property, so the Appraisal Value has been set in consideration of suchthings as rents and cancellation times in the current leasing agreement, and rent levels
and other factors if a new tenant for the property is secured.

(Note) These items contain information for which the Fund owes a duty of confidentiality to the lessees or information that could be
used to calculate such information. The disclosure of these items could result in a breach of said duty of confidentiality, which
could negatively impact the Fund and thus the interests of its unitholders. Accordingly, these items are undisclosed.

Property Name
Appraisal Value
Appraiser
Appraisal Date

Ichibancho stear¥5,270,000,000
The Tanizawa Sogo Appraisal Co., Ltd.
August 31, 2021
(Yen)

- 17 -

Item

Capitalization Approach Price
Price
Calculatedbythe
DirectCapitalization Approach(1) Operating Income (a)-(b)(a) Gross Rental Income(b) Losses due to Vacancies,etc.
(2) Operating Expenses
Maintenance Costs
Utilities Costs

Amount orPercentage
5,270,000,000

5,140,000,000
350,557,603
368,869,056
18,311,453
14,437,332
40,535,586
5,895,000

Advertisement for Leasing
Costs, etc.
Taxes
Insurance 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))(7) Capitalization Rate

Price Calculated by the Discounted Cash
Flow Approach
Discount Rate

Terminal Capitalization Rate
Cost Approach Price

An income-based value was calculated using thecapitalization approach by using the value calculatedusing the discounted cash flow approach as thebaseline and evaluating it using the direct
capitalization approach.
Calculated by reducing a standard level of net cash
flow by the capitalization rate.
Calculated based in part on market rent levels.
Calculated based on the standard stable medium- tolong-term vacancy rate.

122,762,372

Repair Costs

Property Management Fees

Grounds

5,334,526
9,444,055
29,338,400
249,593
17,527,880

Calculated based in part on the managementagreement.
Calculated based on the balance results, etc.
Repair costs for the building were estimated withreference to the Engineering Report, the building’s
age, costs recorded at similar properties and otherfactors.
Calculated based on the property managementagreement.
Calculated based on the property managementagreement.
Calculated based on materials for fiscal 2021.
Calculated based on relevant insurance premium
rate tables.
Calculated based on the balance results, etc.

227,795,231
2,377,593

Calculated based on an investment yield of 1.0%.

14,410,000

Calculated with reference to the Engineering
Report, the building’s age, amounts recorded atsimilar properties and other factors.

215,762,824

4.2％

Calculated based mainly on the yield of similar retailfacility transactions, with reference to thecharacteristics of the area surrounding the property,
the property’s particular characteristics and otherfactors.

5,320,000,000
4.3% (until 5th
fiscal year)
4.4% (from 6th
fiscal year)

Calculated with reference to the individual risks forthe property and other factors.

4.4％

Calculated based on the capitalization rate, withconsideration given to levels of future uncertainty
and other factors.

5,140,000,000

Ratio of Land

86.9％

Ratio of Building

13.1％- 18 -

Matters Noted in Reconciliation ofIndicated Value and Determination-of Appraisal Value

Exhibits
Exhibit 1 Overview of the Portfolio after the Transaction
Exhibit 2 Photos and Maps of the Asset to be Acquired*Nomura Real Estate Master Fund, Inc.’s website: https://www.nre-mf.co.jp/en/- 19 -

Exhibit 1
Overview of the Portfolio after the Transaction(¥ million)
Area

Greater Tokyo
Area (Note 1)

Sector(Anticipated) Total
Other Areas

Acquisition Price(by Sector)

Investment Ratio(%) (Note 2)

Office407,155

69,610476,765

44.0

Retail109,888

64,155174,044

16.0

Logistics

214,7223,460

218,182

20.1

Residential

171,269

33,328204,597

18.9

Hotels

―

6,250

6,250

0.6

Others

4,900

―

4,900

0.5

(Anticipated)
Total Acquisition Price(by Area)

907,935

176,803

1,084,739

100.0

83.7

16.3

100.0

Investment Ratio (%)(Note 2)

(Note 1) “Greater 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 at least 100,000 andtheir peripheral areas, excluding those in Greater Tokyo Area.
(Note 2) “Investment Ratio” indicates the ratio of the (anticipated) total acquisition price of properties for each use or in each area
to the (anticipated) total acquisition price of the entire portfolio. As the figures are rounded to the first decimal place, they
may not add up to exactly 100%.

Exhibit 2
Photos and Access Map of the Asset to be Acquired
PMO Hamamatsucho Ⅱ

PROUD FLAT Togoshi-Ginza