[For Translation Purposes Only]
December 19, 2017
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.
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 Partial Revision of the Asset Management Guidelines
Nomura Real Estate Asset Management Co., Ltd. (the “Asset Management Company”), the asset managementcompany to which Nomura Real Estate Master Fund. Inc. (the “Fund”) entrusts the management of its assets, will
today begin investing in hotels. Accordingly, the Fund announces the partial revision of the Asset Management
Guidelines (the “Management Guidelines”) pertaining to the management of its assets. Details are as follows.

1.

Summary of and Reasons for the Revision

The Fund was established as a diversified REIT on October 1, 2015 through the consolidation type merger of theformer Nomura Real Estate Master Fund, Inc., Nomura Real Estate Office Fund, Inc. and Nomura Real Estate
Residential Fund, Inc. By combining a “diversified type strategy,” in which investments are made in logistics, retail,office, residential and a variety of other facilities, a “large-scale REIT strategy” and a “leasing value chain,” NMF aims
to secure stable income over the medium to long term and the steady growth of assets under management.
In the J-REIT market, sectors targeted for investment have been diversifying, with increased funds being directed
toward hotels, healthcare facilities and other property types. In particular, demand for hotels and other lodging
facilities is expected to continue expanding, driven by the 2020 Tokyo Olympics as well as steady tourism- andcommerce-related domestic demand that is reflective of governmental policies aimed at promoting tourism
nationwide as well as an anticipated rise in the number of overseas visitors to Japan over the long term.
Furthermore, hotels are distinguished from properties in other sectors by the potential upside presented by both
fixed-rent and variable-rent cash flows. They are therefore expected to improve the portfolio’s profitability.
In these circumstances, the Fund’s sponsor, the Nomura Real Estate Group, has decided to enter the hotelbusiness. Its first property in this business, under the new brand NOHGA HOTEL, is scheduled to open in 2018.
Going forward, the Fund expects business in this area to further reinforce the leasing value chain (the property supply
pipeline and management pipeline).
At the start of its fifth fiscal period (ending February 28, 2018), the Fund transitioned to the Growth phase of its
Medium- to Long-term Management Strategy, announced in November 2015. As the name implies, during theGrowth phase, the Fund aims to achieve sustained external and internal growth. The Fund believes that investing inhotels is consistent with its Growth stage management strategy as such investment will help expand the Fund’sinvestment opportunities and increase the portfolio’s profitability.

－ １ －In light of the conditions of the investment environment and the Fund’s management strategy described above, inaddition to the four main sectors in which it has invested to date, the Fund plans to invest in hotels. This revision tothe Management Guidelines will therefore clarify the Asset Management Company’s investment policy regarding
investments in hotels.

2.

Date of the RevisionDecember 19, 20173.

Content of the Revision

Focused on investment in hotels, the amendment establishes standards for selecting hotels for acquisition; theleasing policy for such properties; and standards for selecting operators for such properties. For details, please see theattached “Guidelines Prior to and Following the Revision (Excerpts).”

4.

OthersThis partial revision to the Management Guidelines will not affect the Fund’s operating results for the fifth
fiscal period (September 1, 2017 to February 28, 2018). In accordance with the Financial Instruments andExchange Act, the Fund has submitted an extraordinary report, dated December 19, 2017, to the Director ofthe Kanto Local Finance Bureau regarding this amendment.

*<Nomura Real Estate Master Fund, Inc> URL: http://www.nre-mf.co.jp/en/－ ２ －Attachment

Guidelines Prior to and Following the Revision (Excerpts)

The main revised passages of the Management Guidelines are shown below. The excerpts of both the existing and arevised Management Guidelines presented here are mainly the passages that have been revised (with changesunderlined); other sections of the guidelines are omitted.
Management Guidelines Prior to Revision
II.

Investment Policy
2-1 Investment standards (property selection
standards and portfolio composition standards)

Management Guidelines Following Revision
II.

Investment Policy
2-1 Investment standards (property selection
standards and portfolio composition standards)

1.

(Omitted)1.

(No change)

2.

Property selection standards
When investing in Real-Estate Related Assets, theAsset Management Company shall individually
select assets to be real estate under management
based on the following criteria. In said selection,
particular weight shall be given to the ability ofassets to secure stable earnings based on such factors
as location, building specifications and past earnings
in accordance with the Basic Asset Management
Policies laid out in Article 27 of the Articles ofIncorporation, namely that of securing stableearnings for the medium and long term.

2.

Property selection standards
When investing in Real-Estate Related Assets, theAsset Management Company shall individually
select assets to be real estate under management
based on the following criteria. In said selection,
particular weight shall be given to the ability of assets
to secure stable earnings based on such factors aslocation, building specifications and past earnings inaccordance with the Basic Asset Management
Policies laid out in Article 27 of the Articles ofIncorporation, namely that of securing stableearnings for the medium and long term.

(1) Property selection standards for specificproperty uses(i)–(iv) (Omitted)(Newly added)(1) Property selection standards for specificproperty uses(i)–(iv) (No change)(v) Hotelsa) Standards for determining a property’s use
Upon acquisition, the leasable floor space,rent revenue and other factors attributable toeach use of the acquired real estate shall beassessed to determine its main use;
properties’ whose main use is thus found tobe as h otels shall be considered hotels. Notethat hotels include any attached restaurants,
meeting rooms, banquet halls, spas or similar
facilities.
b) Standards for determining the contract type
In principle, hotels to be acquired shall be
managed as leased facilities (including
variable-rent leases), and Nomura Real Estate
Master Fund, Inc. shall not directly
commission their operation.
c) Property selection policy
When investing in hotels, in addition to theprovisions of “(2) Property selection
standards applied regardless of property use,”
below, the Asset Management Company’s
property selection policy shall be to invest
with balanced consideration of profitabilityand stability.
In particular, hotels shall be selected withregard to their location in light of such factors
as the strength of the local economy, trends invisitors from overseas and the potential
impact on the surrounding area of natural
disasters. Furthermore, as the profitability of
hotels is greatly impacted by such factors as
the ability of the operator and brand strength,
particular weight shall be given to theconditions of the property’s lease contract
and the operator’s creditworthiness andsubstitutability. Consideration shall also begiven to the division between the AssetManagement Company and the operator of
assets, including furniture, fixtures andequipment, as well as the division of theburden for repairs and renovations.
(v) Other uses
There are a wide range of uses for otherinvestment real estate, and investment
standards vary greatly by use. Accordingly,
for properties with other uses, theseGuidelines do not set out specific restrictions
on such factors as property size, butinvestment shall be made based oncomprehensive consideration of such factors
as the location and surrounding area, ease ofsecuring a replacement tenant and versatilityof use of each piece of investment realestate.
(2) Property selection standards applied regardlessof property use.
The following standards shall apply to theacquisition of all properties, regardless ofproperty use.

(vi) Other uses
There are a wide range of uses for otherinvestment real estate, and investment
standards vary greatly by use. Accordingly, forproperties with other uses, these Guidelines
do not set out specific restrictions on suchfactors as property size, but investment shallbe made based on comprehensive
consideration of such factors as the locationand surrounding area, ease of securing a
replacement tenant and versatility of use ofeach piece of investment real estate.
(2) Property selection standards applied regardlessof property use
The following standards shall apply to theacquisition of all properties, regardless ofproperty use.

(i)–(vii) (Omitted)(i)–(vii) (No change)(viii) Tenant composition
The Asset Management Company shallinvest in properties with tenants that haveadequate creditworthiness and whose
purpose of use of the property isappropriate.
In principle, the Asset Management
Company shall invest in multi-tenant
properties. Investment decisions regarding
properties with a single tenant or small
number of tenants shall be made based oncomprehensive consideration of such factors
as the details of the lease contracts; thetenants’ creditworthiness as judged based on
their commercial registration, the report of acorporate research firm or other factors;
prospects for attracting replacement tenants
if present tenants leave; and the specificity ofthe property’s use.

(viii) Tenant composition
The Asset Management Company shall invest
in properties with tenants that have adequate
creditworthiness and whose purpose of useof the property is appropriate.
With the exception of hotels, in principle,
the Asset Management Company shall invest
in multi-tenant properties. Investment
decisions regarding properties with a single
tenant or small number of tenants shall bemade based on comprehensive considerationof such factors as the details of the lease
contracts; the tenants’ creditworthiness as
judged based on their commercial
registration, the report of a corporate
research firm or other factors; prospects for
attracting replacement tenants if present
tenants leave; and the specificity of theproperty’s use.

(ix)(Omitted)(ix) (No change)

3.–4. (Omitted)

3.–4. (No change)

II. Investment Policy
3-1 Portfolio management policy (Basic strategy 1.
Leasing policy)

II. Investment Policy
3-1 Portfolio management policy (Basic strategy 1.
Leasing policy)

1.

1.

(Omitted)

2. Leasing policy
2-1 Common provisions for all uses (excludingresidential facilities)(1) Understanding the state of the relevant market
The Asset Management Company shall analyze
the forecast tenant demand, rent levels,
occupancy rates and trends at competing
properties in the markets to which its real estate
under management belongs based on suchinformation as its own research, third-party
market reports and information provided byreal estate brokers or other market actors. In
cases where the surrounding market isundergoing structural change (such as a trend
toward the new development of rental realestate, the opening of new transportation
systems or new stations, etc.), the AssetManagement Company shall analyze theimpact of such changes.

(2)–(5) (Omitted)(Newly added)

2–2 (Omitted)(No change)

2. Leasing policy
2-1 Common provisions for all uses (excluding residentialfacilities)(1) Understanding the state of the relevant market
The Asset Management Company shall analyze
the forecast tenant demand, rent levels,
occupancy rates and trends at competing
properties in the markets to which its real estate
under management belongs based on suchinformation as its own research, third-party
market reports and information provided byreal estate brokers, consultants or other market
actors. In cases where the surrounding market
is undergoing structural change (such as a trend
toward the new development of rental realestate, the opening of new transportation
systems or new stations, etc.), the AssetManagement Company shall analyze the impactof such changes. For hotels, in addition to theabovementioned structural changes, the AssetManagement Company shall analyze suchfactors as trends at nearby tourist facilities andtrends related to tourists, including those fromoverseas.
(2)–(5) (No change)(6) Operator selection standards
The profitability of a hotel depends in greatpart on the ability of the operator. Accordingly,
the Asset Management Company shall consider
such factors as the operator’s financial
condition and past record of operating hotels.
2–2 (No change)