2nd Fiscal Period Semi-Annual Report
September 1, 2013 to February 28, 2014
NOMURA REAL ESTATE MASTER FUND, INC.
8-5-1, Nishi-Shinjuku, Shinjuku Ward, Tokyo

Delivering on Our Strategy

Stable Returns for Investors

Nomura Master Fund is committed to delivering stable income anddividends. Stability is delivered through implementation of our strategy
of a consumption-based portfolio of logistics and retail facilities.

Logistics

RetailThe continuous execution of growth and finance strategies is the key
to realizing the objective of stable returns through a robust portfolio.
Superior Pipeline Enabledby the Nomura Real Estate GroupIs delivered through aTokyo-centric portfolio (84.6%)

Is provided through a balanced portfolio of
logistics (51.3% of portfolio) and retailproperties (48.7%)

Is achieved by incorporating
established Nomura brands
Landport (logistics) and
GEMS (retail)Stability

Takashi Kataoka
Executive Director
Nomura Real Estate Master Fund, Inc.

Noriaki Ido
Executive Officer
Head of Acquisitions Division
Nomura Real Estate Asset Management Co., Ltd.

Masato Yamauchi

Chief Investment Officer, NMF
Nomura Real Estate Asset Management Co., Ltd.

Executive Officer
Head of Finance Division
Nomura Real Estate Asset Management Co., Ltd.

Is delivered through long-term
contracts often 10 years ormore in length (70.9%)

Motomi Uki

Senior Managing Director
Asset Management
Nomura Real Estate Asset Management Co., Ltd.

Is evidenced through a stablefinancial base with an averageborrowing period of more than
4.4 years and up to 11 years

Disclaimer
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 withany specific products. Investors wishing to purchase the investment units of Nomura Real Estate Master Fund, Inc. (NMF) should contact their own securities brokers or dealers. A fee may
be charged by your financial instruments business operator in relation to the sale or purchase of investment units.
For management fees that NMF pays to Nomura Real Estate Asset Management Co., Ltd., please refer to the terms and conditions of NMF, asset management reports, etc.
The forward-looking statements with respect to the future financial results contained in this document are based on the current facts about the investment policy of NMF, applicable laws
and regulations, the market environment, business practice, etc., as of the preparation date of this document and do not reflect or consider any changes in the circumstances after the
preparation date. These forward-looking statements inherently reflect uncertainty about known risks as well as unknown risks and other factors and may deviate from the actual operating
and management results, financial conditions, etc., of NMF.
Investment in real estate investment securities may result in a loss due to a decline in the transaction 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 its accuracy and reliability. Please note that the contents of thisdocument are subject to change or deletion without prior notice.

Is evidenced through ahigh long-term issuer
rating of AA-

Is delivered through 99.8%
occupancy primarily tied up in
long-term contracts

Note: The above figures are based on data as of February 28, 2014.

Contents
Japan Report
Top Message: Delivering on Our Strategy
Portfolio Management: External Growth
Portfolio Management: Internal Growth
Finance Strategy

2-3
4-5
6-9
10-11
12-13

Portfolio Gallery
Corporate Governance
Financial Section
Independent Auditor’s Report
Investor Information

14-17
18
19-33
34
35

The duplication, reproduction, distribution or use of any information, in whole or in part, contained in this document without the express prior written consent of NMF is strictly prohibited.

Nomura Real Estate Master Fund

1

Japan Report

Waiting gameW

hat does this mean for real estate andlogistics? “No major impact yet,” says Pelham
Higgins of Goodman Group. His company
aims to raise $1.5 billion for investment in Japan forJapanese logistics. Last year, it bought Goodman Sakai,
a four story facility in Osaka with 160,000 sq. meters ofspace for lease that opened April 9. Space in the facility
was fully leased upon opening.
Higgins says that Abenomics has spurred sentiment,
and created better conditions for logistics companies inJapan. Confidence has certainly increased in this sector
with more tenants now willing to commit for longer
leases.
That sentiment has spurred the entire market. Last year,
Real Estate Investment Trusts invested 780 billion yen(about $7.4 billion) on logistics facilities. A number offactors are behind the growth in the market. Abenomics
has renewed interest in Japan, and sparked hopes for asustained economic rebound. The growth of smartphone
and Internet use, and the online commerce that comeswith it, has also increased the need for facilities forstoring goods before transport.

Economic Prospects Deliver Indeed, there is the possibility that the tax hike could
have helped the logistics market. Shopping websites,
Greater Impact than Worries easy to access and often offering goods for cheaperPrime Minister Shinzo Abe faces his biggest
challenge yet as he attempts to steer the economy
into safer waters after implementing a 3% rise in
the sales tax April 1. Worries abound that consumption
will slow as the population refuses to spend more on
durable goods and other big ticket items.
Abenomics, as the prime minister’s set of policies
to pull Japan out of deflation and resuscitate theeconomy have come to be known, had wage rises as acenterpiece. Yet on April 1, few workers were dancing inthe streets because of their newfound wealth. At smaller
companies, 83.4% chose not to hike wages, according
to a Shinkin Central Bank survey. At large businesses,
many raised wages, but not as much as unions would
have hoped.
Still, all appears well in Japan -- around 65% of the
250 companies capitalized at more than 1 billion yen(about $9.5 million) in mid-April said they had been able
to keep sales steady or increase them after the hikein a Reuters survey. And a Ministry of Finance survey
released April 23 said that economic conditions acrossJapan were continuing to improve despite the tax hike.

than bricks-and-mortar stores, are likely to attract moreinterest from consumers in the coming months. But they
are also likely to see higher costs.
Online costs may be hit by increased delivery
charges (rising fuel and labor charges) so not allitems are cheaper if you include delivery charges
and not all items have free delivery

says Matthew Zann of Bear Logi, a Tokyo-based logistics
real estate consultant and real estate managementcompany.
Higgins at Goodman says
Demand from e-commerce players
has always been growing
which makes it difficult to make judgements on how
the tax hike will impact the economy and logistics
operations.

WorriesI

nternational Monetary Fund analysts are concernedthat Abenomics is beginning to show signs of failure.
“A successful transition to self-sustained, deﬂationfree growth remains uncertain,” the fund wrote in a

recent report. “Without additional reforms Japan risks
falling back into lower growth and deﬂation, a further
deterioration in the ﬁscal situation, and an overrelianceon monetary stimulus.”
Those reforms are beginning to take shape. The Abegovernment in late March announced six special
economic zones that it will use as test sites fornationwide regulatory reform. The greater Tokyo area will
look to attract international business through tax breaks,
deregulation and advisory centers that will assist
businesses looking for ways to dismiss employees
protected by Japan’s famed “jobs for life” legal
framework. In the Kansai area that encompasses Kyoto,
Osaka and Nara, the focus will be on pharmaceuticalbusiness. Okinawa will aim to promote tourism, Fukuoka
startups, and two zones -- Yabu and Niigata -- aim to
help agricultural businesses by encouraging innovationand consolidating farmland.
Will these first steps work? Perhaps. But Zann isconcerned that too much, too soon could have a
detrimental effect.
There is more than enough liquidity in the market
he says. “It could be argued that ‘doing more’ may overstimulate the construction cycle which could potentiallyresult in demand-supply imbalances.” In other words,
Abe has done enough for now to attract the interest forsustainable investment, and must take care not to bringin too much cash, without knowing there will be people
able to appreciate the projects undertaken. That may
take time.
Big words from the prime minister when he came into
office promised a Japan resurrection, fueled by economic
growth and a new national pride. Underpinning all of thiswas to be wages. Mr. Watanabe, Japanese everyman,
was going to see his pay rise, which would mean he andhis wife were able to sleep safely, knowing they had a
bit more for leisure spending, and every so often buy
those big ticket items that may require a few months ofscrimping. Here is Abe in January:

In these companies, which tend to pay employees
more, disposable income is set to rise. Will it trickle
down? Abe thinks so; many do not. The service sector
sentiment index in Japan, on which anything under 50 is
considered bearish, stood at 34.7 for March, the mostrecent reading available. The index had declined for
four consecutive months, pointing to short-term worries
among services professionals.
But the logistics market is not heading for disaster.
“Short term price fluctuations are smoothed out overtime,” says Zann. “One way a logistics company canoffset temporary price increases is via fuel surcharges
over the top of normal freight rates.”

Prospects

So what happens next? For real estate, the signs
are good. Property prices in Japan’s major
metropolitan areas continue to rise. A fundconnected with the Singapore government, for example,
plans to buy Meguro Gajoen, a commercial facility with
office space, for around $1.2 billion. Another recent
headline-grabbing deal in Tokyo was Mitsubishi Corp.’s$345 million purchase of the Ralph Lauren Building in
Omotesando.
REITs are also doing well. The total capitalization of
the trusts in Japan was 7.585 trillion yen (about $72.2
billion) in April, up from 7.094 trillion yen (about $67.5
billion) in May last year. A legal change, implemented
April 1, also improves conditions for the trusts in Japan.
As well as monitoring them more closely to prevent
insider trading, the changes will make it easier for thetrusts to invest overseas and offer preferential treatment
to current investors when new shares are issued.
Outside of Japan’s metropolitan areas, things are also
improving. As property prices in the major cities continue
to rise, some developers have begun to invest in areas
outside of major cities, seeing opportunities to bolster
infrastructure.

The wage surprise stands out, because only when
the long-missing link between corporate profitability
and wages is restored will investment in houses, cars,and other durables, and household consumption in
general, finally rid Japan of its deflation and put its
economy on a sustained growth path.

Sony, meanwhile, is getting into real estate. The
electronics maker, which has struggled in the faceof increasing competition, will launch a real estatebusiness in August. Sony Real Estate will offer
consulting services, invest in property and include a
brokerage. It will attempt to leverage the data gathered
through its devices to develop new ways of doing
business.

Anecdotal evidence is not the facts. According toa Keidanren survey, wages have on average grown
2.39% at large Japanese enterprises, led by more
traditional sectors such as steel, autos and electronics.

The reasoning, it appears, is Sony believes in the futureof real estate in Japan. Many others seem to feel thesame way.
Richard Smart

Note: The dollar amounts in brackets have been calculated using $1 = 105 yen.
Reference: Project Syndicate, Japan’s Coming “Wage Surprise,” January 6, 2014.

2

Nomura Real Estate Master Fund

Nomura Real Estate Master Fund

3

Top Message

Delivering on Our Strategy

Top Message: Delivering on our strategy

Path Toward Growth

On behalf of the Nomura Real Estate Management Fund, Inc.
(Nomura Master Fund), let me begin by voicing our thanks to you,
our unitholders, for your steady support.

Increase investment unit price

I am excited to report a distribution of 2,919 yen, which exceeds
our forecast by more than 100 yen. Since our IPO on June 12, 2013,
which was the largest ever for a Japanese REIT, we have expanded
our portfolio to 55 properties and assets under management of
238 billion yen. Our size and management continue to be highly
appraised and we are now included in five key indices such as our
new addition to the S&P Global Property Index and continuingpresence in the FTSE EPRA/NAREIT Global Real Estate Index Series.
All of the above are signs that we are delivering on our investment
strategy of investing in Japan’s economic and industrial
infrastructure by acquiring logistics and retail assets. Of our assets,
84.6% are now located in Tokyo, the economic and political hub ofJapan, and in-place leases have an average length of 12.4 years.
We will continue to maximize our portfolio’s value throughproactively- and prudently-executed investment, management andfinancing strategies. We are confident that we will deliver on our 400
billion yen medium-term portfolio goal while maintaining our LTV
between 30% and 40%. We will maximize value by diversifying ourportfolio of logistics and retail properties, diversifying our tenants
and maximizing the income potential inherent in such properties.

Realize
Stable Growth

Aim to realize stable distribution based on clear concepts

Maximize real estate value

Takashi Kataoka
Executive Director
Nomura Real Estate Master Fund, Inc.
Chief Investment Officer, NMF
Nomura Real Estate Asset Management Co., Ltd.
Joined Nomura Real Estate Development in 1991. Involved in the asset
management business from 2003. Appointed to current position in 2013 afterworking in fund procurement for listed REITs and fund procurement andfund management for private funds.

Secure stable income

Investment strategy

Operating strategy• Set medium-term asset size target• Build a stable portfolio• Expand external acquisition pipeline

Against backdrop of long-term lease agreements• Maintain a high occupancy rate
• Maintain and enhance rent levels

Financial strategy• Build a stable ﬁnancial base
• Finance in response to the market

Image of Growth Strategy

The following pages deliver proof of our execution.
Thank you again for your support.

Nomura Value Chain Drives
Stability and Growth

Nomura Value ChainFirst Look Support of the Robust Pipeline
Nomura Real Estate Development, one of the leading
developers in Japan and Nomura Master Fund’s sponsor,
develops a wide variety of real estate from residential andoffice to logistics, retail and others. Nomura Real Estate
Asset Management Co., Ltd., the asset manager of Nomura
Master Fund, enjoys the robust support of its sponsor
through an information provision agreement that, inessence, provides the asset manager with first looks when
Nomura Real Estate Development is selling any property
that generally meets the asset manager’s property selection
criteria. Property acquisitions that form the nucleus of
this pipeline will be the core assets of Nomura Master
Fund’s future growth, enabling it to execute its strategy
and deliver steady asset growth and stable income over the
medium- to long-term.

Diversified Management Support from the Nomura
Real Estate GroupAs a member of the Nomura Real Estate Group, adiversified real estate group, Nomura Master Fundpossesses the inherent advantage of being able toutilize the Group’s extensive capabilities in leasing,administration and property management. By applying thisexpertise, Nomura Master Fund ensures it will be able tocontinuously improve tenant satisfaction by maintaining
and increasing the value of the assets it manages, and inturn deliver this stability and quality to its investors.
Nomura Real Estate Development has assumed
responsibility for executing the planning, development andleasing of logistics and retail facilities in Nomura Master
Fund’s portfolio.

Information provision agreement

4

Nomura Real Estate Master Fund

Nomura Real Estate Master Fund

5

Portfolio Management

External Growth

Portfolio Management / External Growth

The Robust Nomura Real Estate Pipeline

Q1

Are you satisfied with the growth to date?

Yes. We successfully listed as the largest J-REIT listing ever.
Since then we have been able to acquire both a retail asset and alogistics asset. We have made a good start.

Q2

I s your growth strategy entirely dependent
on the Nomura Real Estate Group?

Our strong ties with the Nomura Real Estate Group mean we havea robust foundation for medium-term growth. But we are notentirely dependent on the Nomura Real Estate Group. Our two
recent acquisitions were sourced through our own network. Recipe
SHIMOKITA was acquired for less than its appraisal value this fiscal
period. We have also acquired equity interest in a silent partnershipmanaged by Ryoke Capital G.K. in the third fiscal period. This
interest comes with preferential negotiation rights for beneficiary
trust interests primarily owning the Nippon Express North Tokyo
Distribution Center.

Q3

What is your medium-term portfolio target?

Our goal is a portfolio of 400 billion yen, built around stationfront retail, residential-oriented retail and logistics properties.
We intend to accomplish this goal while keeping our LTV
between 30% and 40%.

Noriaki Ido

Nomura Real Estate is a diversified property development company that sources land and develops a wide variety ofproperties, including logistics and retail. This proven track record of development, combined with the Nomura Real EstateGroup’s extensive sourcing network, mean that Nomura Master Fund has a robust pipeline for sourcing properties. This is adistinct advantage as Nomura Master Fund works to realize a portfolio of 400 billion yen in five years.

Executive Officer
Head of Acquisitions Division
Nomura Real Estate Asset Management Co., Ltd.

Joined Nomura Real Estate Development in 1992. Worked indevelopment and operational management of office buildings for
8 years. After working in the acquisition, retail facility, office andinvestment discretion businesses within the asset management
section, he was appointed to his current position in 2013.

Q4

How do you intend to grow while
maintaining stability?

We deliver stability to our investors by using the Nomura
pipeline and our proprietary networks to source and acquire
properties with long leases that deliver continuous, steady cash
flows. The combination of the Nomura Group’s value chain andour own unique network will provide unique opportunities forstable growth going forward.

Logistics

Retail●●Investment focused on large, high-performance logistics
facilities●●Investment in retail facilities with stable demand achievedby providing daily necessities, food/beverages, etc.

●●Ability to apply Nomura expertise●●S tation-front retail: Investment in facilities in close
proximity to stations with dense traffic●●A bility to take advantage of large, high performance
facilities emerging as industry structure changes●●Residential-oriented retail: Investment in facilities inresidential areas with high populations

Growth Without Sacrificing Stability

Third Fiscal Period Acquisition
Overview of Silent Partnership
Ryoke Capital G.K.

Beneficiary trustinterests
11.4 billion yen

Non-recourse Loan
8.6 billion yen
Silent partnership
2.8 billion yen

Landport Hachioji II(Tentative Name)GEMS Ichigaya●●0.5 billion yen (17.9%) of this was
acquired by Nomura Master Fund●●Nomura Master Fund also acquired
the preferential negotiation rights tothese beneficiary trust interests
Nomura Master Fund acquired equity interest in a silent partnership primarily holding beneficiary trust interests in
the Nippon Express North Tokyo Distribution Center. The silent partnership is managed by Ryoke Capital, G.K. The
Distribution Center was built in October 2003 at Kawaguchi City, Saitama Prefecture, with excellent access to highways
and train stations. The Center itself is appraised at 11 billion yen and is fully occupied as of February 28, 2014.

Landport Kashiwa Shonan(Tentative Name)

Kichijoji Project(Tentative Name)

Note: Nomura Master Fund has no plans to acquire the above properties as of the printing of this publication.

6

Nomura Real Estate Master Fund

Nomura Real Estate Master Fund

7

Portfolio Management / External Growth

Portfolio Distribution

Portfolio Table (as of the end of the 2nd fiscal period)

The geographical diversification, portfolio composition and portfolio age distribution are clear evidence that
Nomura Master Fund is executing its strategy through its asset manager’s expertise.

A Balanced Portfolio Delivering Stability and Potential for GrowthGeographical Diversification
Other Areas
Kinki Area

5.4%
10.0%

Distribution of Portfolio Age
20.0%

Retail

48.7%

Logistics

Less than 5 years

51.3%

10 years or more

15.2%

Average 45.1%
property age

28.7%

Other

84.6%

Logistics

Residential
facility typeTokyo

Portfolio Composition by Property TypeTokyo Area
investment ratio

13.3 years

Station-front type

39.6%
5 to 10 years●●Investment is focused on the Tokyo Area (80% ormore of portfolio in principle), where there will be
continued strong demand.

40km

17

4
16

6

Main Target

20km

14

20 – 40km

5 years

Over 10 years

Haneda Airport(Tokyo International Airport)

16

Over
40km
Three major
metropolitan areas

10 yearsTokyo
Station

20

16

246

(excluding Tokyo Area)

Tokyo Area
Surrounding areas ofcabinet-orderdesignated cities

Property Age
Investment Universe

134

16

Logistics
RetailExpressway

Other

Tokyo Area
X
Property Age of
10 years or less Within

16

Tokyo

20km

Retail (land only)●●Focus on acquisitions of relatively new properties built
less than 10 years ago for a competitive advantage
in the marketplace.

Area

Other

Location of Portfolio

Name

Location

16 Merad Owada

Osaka City, Osaka

6,640

2.8

6,960

17 Izumiya Yao
18 Izumiya Obayashi
19 Ichibancho stear
20 EQUINIA Aobadori
1 Mitsubishi Motors Meguro
2 Mitsubishi Motors Chofu
3 Mitsubishi Motors Shibuya
4 Mitsubishi Motors Nerima
5 Mitsubishi Motors Kawasaki
6 Mitsubishi Motors Takaido
7 Mitsubishi Motors Katsushika
8 Mitsubishi Motors Higashikurume
9 Mitsubishi Motors Setagaya
10 Mitsubishi Motors Suginami
11 Mitsubishi Motors Sekimachi
12 Mitsubishi Motors Higashiyamato
13 Mitsubishi Motors Motosumiyoshi
14 Mitsubishi Motors Kawagoe
15 Mitsubishi Motors Edogawa
16 Mitsubishi Motors Sayama
Mitsubishi Motors
17
Ibaraki Maintenance Center

Yao City, Osaka
Takarazuka City, Hyogo
Sendai City, Miyagi
Sendai City, Miyagi
Meguro Ward, Tokyo
Chofu City, Tokyo
Shibuya Ward, Tokyo
Nerima Ward, Tokyo
Kawasaki City, Kanagawa
Suginami Ward, Tokyo
Katsushika Ward, Tokyo
Higashikurume City, Tokyo
Setagaya Ward, Tokyo
Suginami Ward, Tokyo
Nerima Ward, Tokyo
Higashiyamato City, Tokyo
Kawasaki City, Kanagawa
Kawagoe City, Saitama
Edogawa Ward, Tokyo
Sayama City, Saitama

4,406
3,020
4,700
1,640
2,740
1,760
1,570
1,240
950
850
800
800
770
740
600
450
370
350
200
160

1.9
1.3
2.0
0.7
1.2
0.7
0.7
0.5
0.4
0.4
0.3
0.3
0.3
0.3
0.3
0.2
0.2
0.1
0.1
0.1

4,710
3,270
5,170
1,760
2,810
1,840
1,740
1,270
1,010
898
815
815
783
793
614
488
375
356
210
166

Ibaraki City, Osaka
Total

Investment Securities
Ryoke Capital Godo Kaisha
1
Silent Partnership Equity Interest

Kawaguchi City,
Saitama
Total

8

Nomura Real Estate Master Fund

Leasable
Floor Space(m2)
70,045.85
52,794.55
71,569.89
47,995.23
50,450.00
57,448.03
34,896.32
29,630.48
30,641.98
24,909.96
24,850.80
13,648.70
12,003.57
9,825.52
42,328.00
23,584.72
9,397.38
4,592.00
39,300.16
29,383.65
6,295.22
3,611.59
14,446.48
2,701.66
2,891.32
14,367.98
12,385.18
7,480.63
1,791.34
2,286.47
2,457.36
6,217.85
24,399.12(Retail) 14,941.54(Logistics)
5,856.50
34,198.01
11,714.36
4,582.81
4,030.37
3,381.19
4,183.63
1,421.31
1,725.61
3,057.02
1,923.64
1,930.05
4,105.00
1,305.78
1,831.00
989.772,783.79
1,646.97
2,462.40
892.56
1,793.00

PML
(%)
4.61
6.17
4.85
10.06
4.92
12.96
11.29
7.33
5.24
12.38
5.15
5.05
6.32
12.35
2.01
1.39
1.39
7.23
5.93
12.79
2.71
7.5
11.24
10.82
14.8
5.93
2.4
6.36
1.81
6.93
9.91
11.24
14.44
10.16
14.37
12.95
2.76
0.34
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–

820

0.3

878

5,704.24–

238,023100.0

252,818

897,089.54

5.24

500

–

–

–

–

500

–

–

–

–

Asset Acquired after the End of the 2nd Fiscal Period
Tokyo

Investment Perspective

Kinki

Nomura Master Fund primarily invests in relatively new logistics and retail properties less than 10 years old that are locatedin the Tokyo Area.

Retail Properties

Tokyo

Note: The above figures are based on data as of February 28, 2014.

External Growth Strategy

Acquisition Investment
Appraisal
Price
Ratio
Value
(millions of yen)(%)(millions of yen)
1 Landport Urayasu
Urayasu City, Chiba
17,4007.3
18,6002 Landport Itabashi
Itabashi Ward, Tokyo
15,7106.6
16,9003 Landport Kawagoe
Kawagoe City, Saitama
13,7005.8
14,0004 Landport Atsugi
Atsugi City, Kanagawa
11,410
4.8
12,1005 Sagamihara Tana Logistics Center
Sagamihara City, Kanagawa
10,600
4.5
11,3006 Sagamihara Onodai Logistics Center
Sagamihara City, Kanagawa
8,700
3.7
9,360
7 Landport Hachioji
Hachioji City, Tokyo
8,250
3.5
8,710
8 Landport Kasukabe
Kasukabe City, Saitama
7,340
3.1
7,710
9 Funabashi Logistics Center
Funabashi City, Chiba
4,660
2.0
4,930
10 Atsugi Minami Logistics Center B Tower Atsugi City, Kanagawa
4,590
1.9
4,850
11 Hanyu Logistics Center
Hanyu City, Saitama
3,810
1.6
4,180
12 Kawaguchi Logistics Center B Tower
Kawaguchi City, Saitama
3,750
1.6
4,080
13 Kawaguchi Logistics Center A Tower
Kawaguchi City, Saitama
2,830
1.2
3,090
14 Atsugi Minami Logistics Center A Tower Atsugi City, Kanagawa
2,690
1.1
2,970
15 Ota Nitta Logistics Center
Ota City, Gunma
3,430
1.4
3,690
16 Ota Higashishinmachi Logistics Center Ota City, Gunma
2,170
0.9
2,380
17 Ota Kiyohara Logistics Center
Ota City, Gunma
650
0.3
702
18 Chiyodamachi Logistics Center
Oura-Gun, Gunma
330
0.1
355
1 Morisia Tsudanuma
Narashino City, Chiba
16,6007.0
17,300
2 Yokosuka More's City
Yokosuka City, Kanagawa
13,6405.7
14,4003 Recipe SHIMOKITA
Setagaya Ward, Tokyo
10,407
4.4
10,6004 EQUINIA Shinjuku
Shinjuku Ward, Tokyo
4,260
1.8
4,330
5 Kawasaki More's
Kawasaki City, Kanagawa
4,000
1.7
4,200
6 EQUINIA Ikebukuro
Toshima Ward, Tokyo
3,990
1.7
4,140
7 covirna machida
Machida City, Tokyo
3,440
1.4
3,840
8 Nitori Makuhari
Chiba City, Chiba
3,080
1.3
3,310
9 Konami Sports Club Fuchu
Fuchu City, Tokyo
2,730
1.1
3,050
10 FESTA SQUARE
Saitama City, Saitama
2,600
1.1
2,810
11 GEMS Shibuya
Shibuya Ward, Tokyo
2,490
1.0
2,500
12 Sundai Azamino
Yokohama City, Kanagawa
1,700
0.7
1,790
13 EQUINIA Aobadai
Yokohama City, Kanagawa
1,560
0.7
1,700
14 Megalos Kanagawa
Yokohama City, Kanagawa
1,000
0.4
1,210
15 Izumiya Senrioka
Suita City, Osaka
8,930
3.8
10,000Use Area No.

Nomura Real Estate Master Fund

9

Portfolio Management

Internal Growth

Portfolio Management: Internal GrowthDiversification of Lease Maturities

Q1

 ow are you delivering on Nomura
H
Master Fund’s strategy of securing stableearnings by maintaining and improving
rent levels?

We are raising the value of existing properties to make themost of opportunities presented to us. For example, inNarashino City, the growing population of the “Kanade noMori” city development provides an excellent opportunity
for the Morisia Tsudanuma shopping center. Consequently,
Nomura Master Fund is optimizing foot traffic routes andenhancing features for shoppers to raise the amount thatexisting and new customers spend.

Q2

What is your strategy for maintaining
high occupancy rates?

We have two distinct strategies. First is the long length ofleases, a strength of our two property classes. For example,
our average leases are 12.4 years and our properties have an
average remaining lease of 6.2 years. Second is diversifying our
tenants. We have a total of 251 tenants and the largest tenantleases slightly more than 10% of the portfolio.

The long-term leases that form the foundation of our revenues also have diversified maturities. This ensures that there will
be no large loss of tenants or significant shift in the occupancy rate during any given fiscal period.
15.0%

Logistics
10.0%
1.2%
1.9%

5.0%

Motomi Uki

3.0%
0.0%

Senior Managing Director
Asset Management
Nomura Real Estate Asset Management Co., Ltd.

3rd FP
Aug.
2014

4.4%

4th FP
Feb.
2015

6.4%

5th FP
Aug.
2015

0.8%
3.2%
4.1%

6th FP
Feb.
2016

9.7%

1.2%

7th FP
Aug.
2016

2.3%

0.1%
0.7%

8th FP
Feb.
2017

4.7%

3.4%

3.9%

5.7%

6.6%
1.8%

1.6%

0.1%

1.9%

0.4%

0.2%

0.3%

4.7%

4.2%
1.1%

9th FP 10th FP 11th FP 12th FP 13th FP 14th FP 15th FP 16th FP 17th FP 18th FP 19th FP 20th FP 21st FP 22nd FP
Aug.
Feb.
Aug.
Feb.
Aug.
Feb.
Aug.
Feb.
Aug.
Feb.
Aug.
Feb.
Aug.
Feb.
2017 2018 2018 2019 2019 2020
2020 2021
2021 2022 2022 2023 2023 2024

Note: The above figures are based on data as of February 28, 2014.

Joined Nomura Real Estate Development in 1991. Involved in theasset management business from 1998. After working in real estate
investment, project planning, fund management, client relations andmarketing, he was appointed to his current position on April 1, 2014.

Q3

Is there one key element to realizing yourstrategies?

That would be the Nomura Value Chain. Geo Akamatsu andother Nomura Real Estate Group members provide us with a vast
wealth of experience in retail and logistics implementation. We
apply this experience to our strategies.

Proactive Management Backed by
the Nomura Value Chain

RetailMorisia Tsudanuma Renovation
Nomura Master Fund planned the renovation of Morisia Tsudanuma in line with the expected expansion in the trade area
and its population with the “Kanade no Mori” city development plan. Nomura Master Fund will complete the renovations inJune 2014 and plans to use the publicity to improve the facility’s name recognition and customer volume. Streamlined foottraffic routes are expected to raise spending per customer and thus the satisfaction of our tenants.
BeforeBefore

After

After

West side passage
on 1st floor

Tenant Diversification

Outside deckon 2nd floor

Our diverse tenant base and lease terms insulate us from individual market upheavals and strengthen our portfolio.

Area Ratio

Lease Term (by leased area)

Total rent area

895,510.83m
251

2 to 5 years
8.9%

2

Total number of tenants

Fukuyama Transporting

10.3%

Izumiya

7.9%

Amazon Japan Logistics

6.3%

Neovia Logistics Services

5.6%

Yokohama Okadaya

4.9%

Mitsui-Soko Logistics

4.7%

Not disclosed

4.6%

ASKUL

4.2%

Otsuka Warehouse

3.9%

Shinkai Transport Systems

3.9%

Other

43.7%

5 to 10 years

19.9%

Less than 2 years
0.3%

Averagelease term

721 units: Residents already
moved in

Kanade no Mori Land Use Plan

12.4 years

10 years or more
70.9%

Expected population: About 7,000 people(20% increase in population within 1km)

JR Tsudanuma
StationJunior high school
Districtpark

869 units: Residents start moving inin September 2015

Yuzawaya
store

Agricultural land

Remaining Lease Term (by leased area)
Less than 2 years

21.3%

2 to 5 years
29.9%

Averageremaininglease term

6.2 years

Routefrom station

Kanade no Mori Forte

Morisia Tsudanuma
Neighborhoodpark

10 years or more
23.5%

Library
750 units: Date to move in not set

What is Kanade no Mori?
5 to 10 years

25.3%

A development located a 3-minute walk fromthe south of Tsudanuma Station. The 35
hector project is a new “town creation” project
filled with diverse amenities for residents.

Elementary
schoolDistrictpark

Land for low-rise residences
Land for mid-to-low-rise residences
Land for mid-to-high-rise residences
Land for roadside retail/services
Land for various services

Source: Prepared by Nomura Real Estate Asset Management Co., Ltd. based on materials of the Narashino-City JR Tsudanuma Station South Exit Land Readjustment Association.

10

Nomura Real Estate Master Fund

Nomura Real Estate Master Fund

11

Finance Strategy

Finance Strategy

Diversification of Loan Maturities

Q1

How have you been implementing thefinancial strategy?

(billions of yen)
20

This fiscal period and beyond we have been making strides
in realizing our prudent financial strategy primarily throughissuing new long-term financing and repaying existing shortterm loans.

15

Q2

How do you measure your success?

First, our LTV ratio has kept steady between 30% and 40%,
as is our long-term goal. The LTV ratio was 31.1% at the endof the first fiscal period and was kept at 32.3% as of the endof the second fiscal period.
Second, the increase in our percentage of long-term loans
is solidifying our long-term stability. At the end of the firstfiscal period 78.9% of all borrowings were long-term. This
increased to 80.4% as of the end of the second fiscal period
and is projected to increase to 99.9% by the end of the third
fiscal period.
Third, we have increased the ratio of fixed interest rate debt
to guard against market shifts. Our ratio of fixed interest
rate has grown from 79.0% as of the end of the first fiscal
period to 80.5% as of the end of the second fiscal period. We
expect it to reach 98.8% by the end of our third fiscal period.

5.5

Refinanced in March

10

3.0

Repaid using cash on handin March

5

7.0

13.0

0

Executive Officer
Head of Finance Division
Nomura Real Estate Asset Management Co., Ltd.

1.0

4.0

2.0

0.9

2.0

3rd FP 4th FP 5th FP 6th FP 7th FP 8th FP 9th FP 10th FP 11th FP 12th FP 13th FP 14th FP 15th FP 16th FP 17th FP 18th FP 19th FP 20th FP 21st FP 22nd FP 23rd FP 24th FP 25th FP
Aug.
Feb.
Aug.
Feb.
Aug.
Feb.
Aug.
Feb.
Aug.
Feb.
Aug.
Feb.
Aug.
Feb.
Aug.
Feb.
Aug.
Feb.
Aug.
Feb.
Aug.
Feb.
Aug.
2014 2015 2015 2016 2016 2017 2017 2018 2018 2019 2019 2020 2020 2021 2021 2022 2022 2023 2023 2024 2024 2025 2025

Delivering on a Highly-Regarded,
Conservative, Prudent Strategy

Bank Formation

Credit Ratings
Credit Rating
AgencyNomura Master Fund’s bank formation boasts loans fromleading Japanese financial institutions and the averageinterest rate of 0.98% needs no explanation as to the highevaluation of Nomura Master Fund’s management byfinancial institutions.

The Bank of Tokyo-Mitsubishi UFJ, Ltd.

19.9

Sumitomo Mitsui Banking Corporation

19.9

Key Debt Markers

Mizuho Bank, Ltd.

13.5

Mitsubishi UFJ Trust and Banking Corporation

6.8

These key markers are resounding evidence of a conservative, well-executed strategy.

Sumitomo Mitsui Trust Bank, Limited

6.8

The Norinchukin Bank

6.8

Development Bank of Japan Inc.

5.8

Mizuho Trust & Banking Co., Ltd.

4.8

billion yen

5.0

Note: Nomura Master Fund has clearly spread out loan maturities enabling the REIT to consistently refinance even in potentially severe economic climes.

Joined Nomura Real Estate Development in 1991. Worked in tenant
marketing, development, property and asset management businessesof office buildings for 14 years. Worked in asset management businessof offices in the asset management section from 2008. Appointed tocurrent position in 2011.

0.98%

5.5

1.0

(billions of yen)

84.4

9.0

4.0

Financial Institution

Total amount ofinterest-bearing debt

10.8

10.0

Refinanced in May
Repaid in May

Masato Yamauchi

12.2

Average interest rate

Total

Japan Credit Rating Agency, Ltd. (JCR)

AAStableLong-Term
Issuer Rating
OutlookCommitment Line
The Bank of Tokyo-Mitsubishi UFJ, Ltd.

Commitment Line
Agreement

10

Sumitomo Mitsui Banking Corporation

billion yen
Mizuho Bank, Ltd.

(Commitment period: 1 year)

84.4

Note: The figures are based on data as of February 28, 2014.

Further Progress in Finance Strategy

80.4%

Long-term debt ratio

Average remaining years
to maturity*Includes fixed interest rates through interest-rate swap agreements

Nomura Real Estate Master Fund

80.5%

As of end of

Average remaining years

4.4
years

12

Ratio of fixed interest rate

32.3%

LTV
(ratio of interest-bearing liabilities to total assets)

As of end of

2nd Period

3rd Period

4.4

5.1

(assumed)

years

years

Rate of long-term loans

80.4%

99.9%

Rate of fixed interest loans

80.5%

98.8%
Nomura Real Estate Master Fund

13

Portfolio Gallery

Portfolio Gallery

Effectively Applying the Nomura Value Chain to Deliver a Robust Portfolio to Investors

Logistics/Tokyo Area
Landport Kawagoe

Landport Itabashi

Kawaguchi Logistics Center A Tower

Landport Kasukabe

Kawaguchi Logistics Center B Tower

Hanyu Logistics Center

Ota Higashishinmachi Logistics Center

Ota Nitta Logistics Center

Landport Atsugi

Landport Urayasu

Logistics/Other
Atsugi Minami Logistics Center A Tower

Atsugi Minami Logistics Center B Tower

Funabashi Logistics Center

Sagamihara Tana Logistics Center

Landport Hachioji

Sagamihara Onodai Logistics Center

14

Nomura Real Estate Master Fund

Ota Kiyohara Logistics Center

Chiyodamachi Logistics Center

Nomura Real Estate Master Fund

15

Portfolio Gallery

Retail/Tokyo
Station-front type

Retail/Kinki

Residential facility type

Station-front type
Residential facility type

Morisia Tsudanuma

Recipe SHIMOKITA

Kawasaki More’s

Konami Sports Club Fuchu

EQUINIA Ikebukuro

GEMS Shibuya

Sundai Azamino

EQUINIA Shinjuku

Izumiya Senrioka

Merad Owada

Izumiya Obayashi

Izumiya Yao

Retail/Other
Station-front type
Residential facility type

Ichibancho stear

EQUINIA Aobadori

Retail (land only)/Tokyo
Nitori Makuhari

EQUINIA Aobadai

covirna machida

Mitsubishi Motors Meguro
Mitsubishi Motors Chofu
Mitsubishi Motors Shibuya
Mitsubishi Motors Nerima
Mitsubishi Motors Kawasaki
Mitsubishi Motors Takaido

Mitsubishi Motors Katsushika
Mitsubishi Motors Higashikurume
Mitsubishi Motors Setagaya
Mitsubishi Motors Suginami
Mitsubishi Motors Sekimachi
Mitsubishi Motors Higashiyamato

Mitsubishi Motors Motosumiyoshi
Mitsubishi Motors Kawagoe
Mitsubishi Motors Edogawa
Mitsubishi Motors Sayama

Retail (land only)/Kinki
Mitsubishi Motors Ibaraki Maintenance Center
Megalos Kanagawa

16

Nomura Real Estate Master Fund

FESTA SQUARE

Yokosuka More’s City
Nomura Real Estate Master Fund

17

Corporate GovernanceCompliance that Ensures Investment Integrity and Investor Confidence
Nomura Real Estate Asset Management (NREAM) created its compliance rules and structure at the dawn of the Japanesereal estate investment management business in the 1990s to meet the strict standards of foreign investors. Over the years,
NREAM has established a highly-refined compliance structure for the many facets of investment management, including
private funds, J-REITs and discretionary investment services.
The key elements of NREAM’s compliance structure are the Compliance Department, the Compliance Officer, who is the headof the Compliance Department, and the Compliance Committee.
The Compliance Department handles risk management and Risk Management Committee matters along with those related
to compliance and the Compliance Committee. Thus, the Compliance Department is the corporate body that ensures day-today compliance in decision-making and actions.
The Compliance Committee revises compliance regulations, and establishes and revises the Compliance Manual andCompliance Program. It also handles countermeasures when required and instructed to do so by the Compliance Officer inthe event of compliance violations by NREAM. The Compliance Committee also analyzes deals with interested parties at thebehest of the Compliance Officer and considers improvements needed to maintain compliance with laws and regulations. The
Compliance Committee additionally administers and verifies achievement of the company wide Compliance Program.
The Compliance Officer constantly monitors and inspects legal compliance of NREAM’s investment and advisory activities.
The Compliance Officer verifies the compliance of all matters under discussion by the Investment Committee and voices hisor her opinion. The Compliance Officer also verifies daily compliance and reports to the President when compliance issues are
discovered and seeks implementation of proper countermeasures.

Financial Section

The flow of compliance matters regarding investment is shown in the table below.

Preparer and Presenter of Proposal
Preparation of proposal

Contents
Balance Sheet

Submission

Compliance Officer
提出
Confirmationof proposal
Approval

Investment Committee
Investment decision
ReportCompliance Committee

18

Nomura Real Estate Master Fund

Proposal is redirected if the proposal relates to amaterial transaction with a related party or if theCompliance Officer otherwise deems it necessary

Approval

Proposal is redirected when the Compliance Officer
identifies any critical issue with the proposal during
Investment Committee deliberations

Compliance Committee
Deliberation

20

Statement of Income and Retained Earnings

22

Statement of Changes in Net Assets

23

Statement of Cash Flows24

Notes to Financial Statements

25

Independent Auditor’s Report34Balance Sheet
Thousands of Yen

As of February 28, 2014

Thousands of Yen

As of August 31, 2013

As of February 28, 2014ASSETSAs of August 31, 2013

LIABILITIESCurrent Assets:
Cash and bank deposits
Rental receivables
Income taxes receivable
Consumption taxes receivable
Other current assets
Total current assets

Current Liabilities:¥20,988,819¥16,460,088

107,911138,212164––

4,713,348

260,473249,363

21,357,367

21,561,011

Property and Equipment, at Cost:Land

139,617,049

131,144,877

Buildings and structures

97,760,234

95,221,008

11,618574

Tools, furniture and fixtures
Construction in progress
SubtotalLess accumulated depreciation
Net property and equipment

23,226–

237,412,127

226,366,459(2,196,325)(698,513)

235,215,802

225,667,946

3,829,100

3,821,371

Investments and Other Assets:
Leasehold rights
Intangible assets

11,38911,445Long-term prepaid expenses

613,882648,602

Long-term deposits

39,206

39,101

Security deposits

516,126

515,926

5,009,703

5,036,445¥261,582,872¥252,265,402

Total investments and other assets
Total Assets
The accompanying notes to financial statements are an integral part of these statements.

Trade accounts payable
Short-term debt

¥330,137¥262,587

16,500,000

16,500,000

Current portion of long-term debt

85,60085,600

Other accounts payable

207,946

1,085,077

Accrued expenses

10,054

10,658652

1,523

Accrued income taxes
Accrued consumption taxes

179,119–

Rent received in advance

1,459,898

1,335,426

Other current liabilities
Total current liabilities

940

47,051

18,774,346

19,327,922

67,850,200

61,893,000

Long-term Liabilities:
Long-term debt
Security deposits from te ｄ nants

8,976,172

8,672,524

Total long-term liabilities

76,826,372

70,565,524

Total Liabilities

95,600,718

89,893,446

161,120,405

161,120,405

NET ASSETS
Unitholders’ Equity:
Unitholders’ capital
Surplus4,861,749

1,251,551

Total surplus

4,861,749

1,251,551

Total unitholders’ equity

165,982,154

162,371,956

Total Net Assets

165,982,154

162,371,956

Total Liabilities and Net Assets¥261,582,872¥252,265,402

Retained earnings

The accompanying notes to financial statements are an integral part of these statements.

20

Nomura Real Estate Master Fund

Nomura Real Estate Master Fund

21

Statement of Income and Retained Earnings

Statement of Changes in Net Assets
Thousands of Yen

For the period
from September 1, 2013
to February 28, 2014

For the period from September 1, 2013 to February 28, 2014

For the period
from January 31, 2013
to August 31, 2013

Thousands of Yen

Unitholders’ Equity

Operating Revenues and Expenses
Operating Revenues:
Real estate rental revenues
Operating Expenses:
Real estate rental expenses
Asset management fees
Asset custody fees
Administrative service fees
Other operating expenses

Operating Profit¥9,176,391
9,176,391¥3,683,130
3,683,130

2,918,849
750,576
14,24864,03780,271
3,827,981

1,258,501
277,764
3,993
23,54029,702
1,593,500

5,348,410

2,089,630

Balance as of
September 1, 2013
Cash distribution paid

Retained
Earnings

1,665,260 ¥161,120,405–

Total
Unitholders’EquityTotal Surplus

Total
Net Assets¥1,251,551¥1,251,551 ¥162,371,956 ¥162,371,956(1,250,611)(1,250,611)(1,250,611)(1,250,611)–

4,860,809

4,860,809

4,860,809

4,860,809

1,665,260 ¥161,120,405¥4,861,749¥4,861,749 ¥165,982,154 ¥165,982,154

Net income
Balance as ofFebruary 28, 2014

Surplus

Unitholders’CapitalUnits–

For the period from January 31, 2013 to August 31, 2013
Thousands of Yen

Unitholders’ Equity
Non-Operating Revenues and Expenses
Non-Operating Revenues:
Interest income
Interest on refund of consumption taxes
Other non-operating revenues

Non-Operating Expenses:
Interest expense
Loan arrangement fees
Investment units issuance costs
Other offering costs associated with the issuance of investment units
Organization expenses
Other non-operating expenses

1,874
22,211
11
24,096

889
–
4
893

398,386
108,657–––
3,750
510,793

144,739
147,198
293,249
149,006
100,000
3,125
837,317

Ordinary Income

4,861,713

1,253,206

Income before Income Taxes

4,861,713

1,253,206

Income Taxes:
Current
Deferred

868
36

1,704
(49)

Net Income

4,860,809

1,251,551

Retained earnings brought forward

940–

Retained Earnings at End of Period¥4,861,749¥1,251,551

Surplus

Unitholders’CapitalUnits

Retained
Earnings

Total
Unitholders’EquityTotal Surplus

Total
Net Assets

Balance as ofJanuary 31, 2013
Issuance of new
investment units
Net income

–

–

–

1,665,260 ¥161,120,405–– ¥161,120,405 ¥161,120,405–¥1,251,551¥1,251,551

Balance as ofAugust 31, 2013

1,665,260 ¥161,120,405¥1,251,551¥1,251,551 ¥162,371,956 ¥162,371,956

–

–

–

1,251,551–

1,251,551

The accompanying notes to financial statements are an integral part of these statements.

The accompanying notes to financial statements are an integral part of these statements.

22

Nomura Real Estate Master Fund

Nomura Real Estate Master Fund23

Statement of Cash Flows

Notes to Financial Statements
Thousands of Yen

For the period
from September 1, 2013
to February 28, 2014

For the period
from January 31, 2013
to August 31, 2013

Nomura Real Estate Master Fund, Inc. (the “Company”) is a real estate investment corporation formed to own and invest primarily
in logistics facilities and retail facilities. The Company is externally managed by a licensed asset management company, Nomura
Real Estate Asset Management Co., Ltd. (“NREAM”). NREAM is a wholly-owned subsidiary of Nomura Real Estate Holdings, Inc.

Cash Flows
Cash Flows from Operating Activities
Income before income taxes
Depreciation
Investment units issuance costs
Interest income
Interest expense
Decrease (Increase) in rental receivables
Decrease (Increase) in consumption taxes receivable
Decrease (Increase) in long-term prepaid expenses
Decrease (Increase) in long-term deposits
Increase (Decrease) in trade accounts payable
Increase (Decrease) in other accounts payable
Increase (Decrease) in accrued consumption taxes
Increase (Decrease) in rent received in advance
Other
SubtotalInterest received
Interest paid
Income taxes paid
Net cash provided by (used in) operating activities
Cash Flows from Investing Activities
Payments for purchases of property and equipment
Payments for purchases of leasehold rights and intangible assets
Reimbursement of security deposits to tenants
Proceeds from security deposits from tenants
Payments for security deposits
Net cash provided by (used in) investing activities
Cash Flows from Financing Activities
Proceeds from short-term debt
Repayment of short-term debt
Proceeds from long-term debt
Repayment of long-term debt
Proceeds from issuance of investment units
Payments for investment units issuance costs
Distributions to unitholders
Net cash provided by (used in) financing activities
Net Increase (Decrease) in Cash and Cash Equivalents¥4,861,713
1,499,067–(1,874)
398,386
30,301
4,713,348
34,720(105)
67,550(327,789)
179,119
124,472(57,257)
11,521,651
1,874(398,991)(1,903)
11,122,631(11,617,397)(14,506)(114,767)
418,416(200)(11,328,454)¥1,253,206
699,118
293,249(889)
144,739(138,212)(4,713,348)(648,602)(39,101)
262,587
376,561–
1,335,426(202,263)(1,377,529)
889(134,081)(181)(1,510,902)(225,663,944)(3,827,420)(23,066)
8,695,590(515,926)(221,334,766)

5,000,000(5,000,000)
6,000,000(42,800)––(1,222,646)

16,500,000–
62,000,000(21,400)
161,120,405(293,249)–

4,734,554

239,305,756

4,528,731

16,460,088

Cash and Cash Equivalents at Beginning of Period

16,460,088–

Cash and Cash Equivalents at End of Period¥20,988,819¥16,460,088

The accompanying notes to financial statements are an integral part of these statements.

1. ORGANIZATIONOn January 31, 2013, the Company was incorporated under the Act on Investment Trusts and Investment Corporations (the“Investment Trust Act”) of Japan. On June 12, 2013, the Company was listed on the Tokyo Stock Exchange and started operations
on the following day. As of February 28, 2014, the Company owned a portfolio of 55 logistics facilities and retail facilities
containing an aggregate of approximately 897,089.54 square meters of leasable area and leased space to 251 tenants.

2. BASIS OF PRESENTATIONThe Company maintains its accounting records and prepares its financial statements in accordance with accounting principles
generally accepted in Japan (“Japanese GAAP”), including provisions set forth in the Investment Trust Act of Japan, the Companies
Act of Japan, the Financial Instruments and Exchange Act of Japan and related regulations, which are different in certain respects
as to the application and disclosure requirements of International Financial Reporting Standards.
The accompanying financial statements are a translation of the audited financial statements of the Company, which were preparedin accordance with Japanese GAAP and were presented in the Securities Report of the Company filed with the Kanto Local Finance
Bureau. In preparing the accompanying financial statements, certain reclassifications and modifications have been made to thefinancial statements issued domestically in order to present them in a format that is more familiar to readers outside Japan. In
addition, the notes to financial statements include certain information that might not be required under Japanese GAAP but ispresented herein as additional information. Amounts have been rounded to the nearest thousand of yen in the accompanying
financial statements and the notes thereto, whereas amounts were truncated in the Japanese financial statements prepared inaccordance with Japanese GAAP.
The Company’s fiscal period is a six-month period which ends at the end of February or August. The Company does not prepare
consolidated financial statements because it has no subsidiaries.

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESCash and cash equivalents
Cash and cash equivalents consist of cash on hand, deposits placed with banks and short-term investments that are highly liquid,readily convertible to cash, with an insignificant risk of market value fluctuation, and with a maturity of three months or less whenpurchased.

Property and equipment
Property and equipment are stated at cost, which includes the purchase price and related costs for acquisition, less accumulated
depreciation. Depreciation is calculated by the straight-line method over the estimated useful lives of the fixed assets outlined below:
		 Buildings
		 Structures
		 Tools, furniture and fixtures

3 - 70 years
2 - 15 years
4 - 10 years

Intangible assets
Intangible assets are amortized by the straight-line method.

Long-term prepaid expenses
Long-term prepaid expenses are amortized by the straight-line method.

Impairment of fixed assets
The Company reviews fixed assets for impairment whenever events or changes in circumstances indicate that the carrying valueof its fixed assets may not be recoverable. An impairment loss is recognized if the carrying value of an asset exceeds the aggregate
estimated future cash flows. If a fixed asset is determined to be impaired, it is written down to its recoverable amount and the writedown is recorded as an impairment loss during the period in which it occurs. No impairment losses have been recognized to date.

24

Nomura Real Estate Master Fund

Nomura Real Estate Master Fund25

Accounting treatment of beneficial interests in real estate
All assets and liabilities held in trust, for which the real estate in possession of the Company was entrusted, and all related
earnings and expenses incurred are reflected in the accompanying balance sheet and statement of income and retained earnings,
respectively.

5. SCHEDULE OF PROPERTY AND EQUIPMENT
Property and equipment as of February 28, 2014 and August 31, 2013 consist of the following:Thousands of Yen

Revenue recognition
Operating revenues consist of rental revenues including base rents and common area charges, and other operating revenues
including utility charge reimbursements, parking space rental revenues and other income. Rental revenues are generally recognizedon an accrual basis over the life of each lease. Utility charge reimbursements are recognized when earned and their amounts arereasonably estimated.

Property related taxes
Property in Japan is subject to property taxes, urban planning taxes and depreciable property taxes on a calendar year basis. The
taxes related to property are generally imposed based on the value of the relevant property and incurred for fiscal period.
The seller of a property is liable for property related taxes for the period from the purchase date through the end of that calendar
year because taxes are imposed on the owner registered in the record as of January 1 for the entire year based on the assessment
made by the local government. The amount applicable to the buyer of a property is usually settled between each party andcapitalized as part of the acquisition cost of the property. The capitalized property related taxes amounted to ¥1,493 thousand and¥768,771 thousand for the fiscal period ended February 28, 2014 and August 31, 2013, respectively.

Income taxes

Land
Buildings and structures
Accumulated depreciation
Land in trust
Buildings and structures in trust
Accumulated depreciation
Tools, furniture and fixtures in trust
Accumulated depreciation
Construction in progress
Total

As of February 28, 2014
Acquisition costs
Book value¥10,917,067¥10,917,067
3,505,710(45,342)3,460,368
128,699,982
128,699,982
94,254,524(2,150,735)
92,103,789
11,618(248)
11,370

As of August 31, 2013
Acquisition costs
Book value¥2,440,333¥2,440,333
1,109,122(6,473)
1,102,649
128,704,544
128,704,544
94,111,886(692,032)
93,419,854
574
(8)
566

23,22623,226––¥235,215,802¥235,215,802¥225,667,946¥225,667,946

6. SHORT-TERM DEBT AND CURRENT PORTION OF LONG-TERM DEBT
Short-term debt and current portion of long-term debt as of February 28, 2014 and August 31, 2013 consist of the following:

Deferred tax assets and liabilities are computed based on the differences between the financial statements and income tax bases ofassets and liabilities using the applicable statutory tax rates.

Consumption taxes
Consumption taxes received and paid are not included in the accompanying statement of income and retained earnings.

Derivative financial instruments
The Company utilizes interest-rate swap contracts as derivative financial instruments only for the purpose of hedging its exposure
to changes in interest rates. The Company defers recognition of gains or losses resulting from changes in the fair value of interestrate swap contracts which meet the criteria for deferral hedge accounting.
Although the deferred hedge treatment is generally applied, the Company applies special treatment to those interest-rate swap
contracts that meet the criteria for such special treatment. Under the special treatment, interest-rate swaps are not remeasured
at fair value; instead, the net amount paid or received under the interest rate swap contract is recognized and included in interest
expense or income.

4. CASH AND CASH EQUIVALENTS

As of February 28, 2014
AmountWeighted-average(Thousands of Yen)
interest rate (Note 1)

As of August 31, 2013
AmountWeighted-average(Thousands of Yen)
interest rate (Note 1)

Unsecured loans from banks due
on May 26, 2014

¥8,000,000

0.34636%¥8,000,000

0.35000%

Unsecured loans from banks due
on May 26, 2014

8,500,000

0.34636%8,500,000

0.35000%

Unsecured loans from a bank due
on May 26, 2025 (Note 2)

42,8002.21812%42,8002.21812%

Unsecured loans from a bank due
on May 26, 2025 (Note 2)

42,8002.17000%

42,8002.17000%

Total¥16,585,600¥16,585,600

Note 1:	The weighted-average interest rate is weighted by the balance of each borrowing at the end of the period and rounded to the nearest fifth decimal place. As
for the borrowings, which were hedged by interest-rate swaps for the purpose of avoiding interest rate fluctuation risk, the swapped interest rates are used to
calculate the weighted average of interest.
Note 2:	Installments of ¥10.7 million will be made on the 26th day of every three month starting on August 26, 2013, with the remaining payment of ¥497.1 million
to be repaid on May 26, 2025.

The Company entered into ¥10,000 million credit facilities in the form of commitment lines with three financial institutions for the
fiscal period ended February 28, 2014. The total unused amounts of such credit facilities were ¥10,000 million as of February 28, 2014.

Cash and cash equivalents as of February 28, 2014 and August 31, 2013 consist of the following:Thousands of Yen

As of February 28, 201426

As of August 31, 2013

Cash and bank deposits¥20,988,819¥16,460,088

Cash and cash equivalents¥20,988,819¥16,460,088

Nomura Real Estate Master Fund

Nomura Real Estate Master Fund27

7. LONG-TERM DEBT

9. PER UNIT INFORMATION

Long-term debt as of February 28, 2014 and August 31, 2013 consist of the following:
As of February 28, 2014
AmountWeighted-average(Thousands of Yen)
interest rate (Note 1)

The net asset values per unit and the net income per unit as of February 28, 2014 and August 31, 2013 were as follows:

As of August 31, 2013
AmountWeighted-average(Thousands of Yen)
interest rate (Note 1)

Unsecured loans from banks dueon November 26, 2016

¥13,000,000

0.64250%¥13,000,000

0.64250%

Unsecured loans from banks due
on May 26, 201812,200,000

0.86250%

12,200,000

0.86250%

Unsecured loans from banks dueon November 26, 2018

4,000,000

0.72500%––

Unsecured loans from banks due
on May 26, 2019

9,000,000

1.11750%

9,000,000

1.11750%

Unsecured loans from a bankdue on May 26, 2019

1,000,000

1.04875%

1,000,000

1.04875%

Unsecured loans from banks due
on May 26, 2020

10,000,000

1.33750%

10,000,000

1.33750%

Unsecured loans from a bankdue on May 26, 2020

Net income per unit

¥2,919For the period
from January 31, 2013
to August 31, 2013
¥97,505¥1,948The net income per unit is calculated by dividing net income by the weighted-average number of units outstanding.
Note: The basis for calculating net income per unit is as follows.

For the period
from September 1, 2013
to February 28, 2014
¥4,860,809

For the period
from January 31, 2013
to August 31, 2013
¥1,251,551

Amount not available to ordinary unitholders (Thousands of Yen)––

Net income available to ordinary unitholders (Thousands of Yen)

¥4,860,809¥1,251,551

Average number of units during the period

1,665,260

642,316

Net income (Thousands of Yen)

800,000

1.25875%

800,000

1.25875%

Unsecured loans from banks due
on May 26, 2021

8,000,000

1.56250%

8,000,000

1.56250%

10. RELATED PARTY TRANSACTIONS

Unsecured loans from a bankdue on May 26, 2021

1,000,000

1.46375%

1,000,000

1.46375%

For the periods from September 1, 2013 to February 28, 2014 and from January 31, 2013 to August 31, 2013

Unsecured loans from a bankdue on November 26, 2021

2,000,000

1.30289%––

Unsecured loans from a bankdue on May 26, 2023

2,000,000

1.89500%

2,000,000

1.89500%

Unsecured loans from a bankdue on May 26, 2023

2,000,000

1.86500%

2,000,000

1.86500%

Unsecured loans from a bankdue on May 26, 2023

Fellow subsidiary companies
		Not applicable

1,000,000

1.83875%

1,000,000

1.83875%

Unsecured loans from a bankdue on May 26, 2025 (Note 2)

925,100

2.21812%946,500

2.21812%

Directors and major individual unitholders
		Not applicable

Unsecured loans from a bankdue on May 26, 2025 (Note 2)

925,100

2.17000%

946,500

2.17000%

Total¥67,850,200¥61,893,000

Note 1:	The weighted-average interest rate is weighted by the balance of each borrowing at the end of the period and rounded to the nearest fifth decimal place. As
for the borrowings, which were hedged by interest-rate swaps for the purpose of avoiding interest rate fluctuation risk, the swapped interest rates are used to
calculate the weighted average of interest.
Note 2:	Installments of ¥10.7 million will be made on the 26th day of every three month starting on August 26, 2013, with the remaining payment of ¥497.1 million
to be repaid on May 26, 2025.

The scheduled repayment amounts of long-term debt for each of the five years after the balance sheet date (excluding the current
portion of long-term debt) are as follows.
Thousands of Yen

Long-term debt

1-2 years

2-3 years

3-4 years

4-5 years

85,60013,085,600

85,60016,285,600

8. UNITHOLDERS’ EQUITYThe Company issues only non-par value investment units in accordance with the Investment Trust Act. The entire amount of
the issue price of new units is designated as stated capital. The Company is required to maintain net assets of at least ¥50,000
thousand as set forth in the Investment Trust Act.

28

Net assets per unit

For the period
from September 1, 2013
to February 28, 2014
¥99,673

Nomura Real Estate Master Fund

Parent Company and major corporate unitholders
		Not applicable
Subsidiaries and affiliates
		Not applicable

11. INCOME TAXESThe Company, as an investment corporation, is subject to corporate income taxes at a statutory tax rate of approximately 37% for
the fiscal period ended February 28, 2014 and August 31, 2013. However, the Company may deduct dividend distributions paid
to its unitholders from its taxable income amounts, provided such distributions meet the requirements under the Act on Special
Measures Concerning Taxation of Japan. Under this act, an investment corporation must meet a number of tax requirements,
including a requirement to distribute in excess of 90% of its distributable income for the fiscal period, in order to deduct suchamounts. If the investment corporation does not satisfy all of the requirements, the entire taxable income of the investment
corporation will be subject to regular corporate income taxes.
Since the Company distributed in excess of 90% of its distributable income in the form of cash distributions totaling ¥4,860,893
thousand and ¥1,250,610 thousand for the fiscal period ended February 28, 2014 and August 31, 2013 respectively, such
distributions were treated as deductible distributions for purposes of corporate income taxes. The following summarizes thesignificant differences between the statutory tax rate and the effective tax rate:
For the period
from September 1, 2013
to February 28, 2014
Statutory tax rate
Deductible cash distributions
Other
Effective tax rate

For the period
from January 31, 2013
to August 31, 201336.59%(36.58)0.01
0.02%

36.59%(36.51)0.05
0.13%

Nomura Real Estate Master Fund29

12. FINANCIAL INSTRUMENTS
Overview(1) Policy for Financial Instruments
	Upon acquisition of property-related assets, the Company may raise funds through certain financing methods including
borrowings, issuance of investment corporation bonds and issuance of investment units. In financing through interest-bearing
debt, to secure stable financing capability and reduce future risks of rising interest rates, the Company’s investment policy is tosecure longer-term, fixed-rate borrowings with well-diversified maturities.

			As these items are settled within a short-term period, their fair value is nearly equal to the carrying value. Therefore, for these items, the carrying value isreported as the fair value.
(iii) Current portion of long-term debt and (iv) Long-term debt
			For floating-rate long-term debt, the carrying value is reported as it is considered to be approximately equal to the fair value because such debt reflects themarket interest rates within a short-term period. (However, the fair value of certain floating-rate long-term debt that qualifies for the special treatment ofinterest-rate swaps (see “17. Derivatives and Hedge Accounting”) is determined by discounting the sum of its principal and interest payments net of any
cash flows from the interest-rate swap at a rate reasonably estimated to be applicable to similar fixed-rate debt.) The fair value of fixed-rate long-term debt
is determined by discounting the sum of its principal and interest payments at a rate reasonably estimated to be applicable to similar fixed-rate debt.
(v) Derivative transactions
			See “17. Derivatives and Hedge Accounting.”
Note 3: Redemption schedule for cash and bank deposits as of February 28, 2014
Thousands of Yen

	The Company enters into derivative transactions only for the purpose of reducing risk of future interest rate fluctuations anddoes not engage in speculative transactions.
Cash and bank deposits(2) Type and Risk of Financial Instruments and Related Risk Management
	Debts and investment corporation bonds are primarily used to fund the acquisition of property-related assets as well as therepayment of debts and redemption of investment corporation bonds. The Company is exposed to liquidity risk of being unable
to meet its obligations on scheduled due dates. The Company controls and limits such risk by diversifying not only the financial
institutions, but also the type of financing to include the effective use of surplus funds and direct financing from the capital
markets such as issuance of investment units. In addition, the Company is exposed to the market risk arising from fluctuationsin interest rates on its floating-rate debts. However, the effect of such risk on the operation of the Company is limited bymaintaining the LTV ratio at low levels and the ratio of long-term fixed-rate debts to total debt at high levels. Furthermore, theCompany may utilize derivative transactions (interest-rate swap transactions) as a hedging instrument to reduce the market
risk under floating-rate debts by swapping such floating-rate interest payments for fixed-rate interest payments.
	Bank deposits are held as a means of investing surplus funds, and the Company is exposed to the credit risk that financial
institutions may default. However, the effect of such risk is limited by diversifying the financial institutions with which surplus
funds are deposited.

Total

Due within
After one year, After two years, After three years, After four years,
one yearwithin two years within three years within four years within five years¥20,988,819––––¥20,988,819

–

–

–

After
five years–––

Redemption schedule for cash and bank deposits as of August 31, 2013
Thousands of Yen

Cash and bank deposits
Total

Due within
After one year, After two years, After three years, After four years,
one yearwithin two years within three years within four years within five years¥16,460,088––––¥16,460,088

–

–

–

After
five years–––

Note 4: Redemption schedule for debt as of February 28, 2014
Thousands of Yen

Due within
After one year, After two years, After three years, After four years,
one yearwithin two years within three years within four years within five years¥16,500,000
–
–
–
–

After
five years(3) Supplementary Explanation on Estimated Fair Value of Financial Instruments

Short-term debt

	The fair value of financial instruments is based on the quoted market price, if applicable. When there is no quoted market priceavailable, fair value is reasonably estimated. Certain assumptions are used for the estimation of fair value. Accordingly, theresult of such estimation may change if different assumptions are used. Furthermore, the contractual amounts of derivativetransactions stated in “17. Derivatives and Hedge Accounting” below do not represent the market risk involved in thesederivative transactions.

Long-term debt

85,600¥85,600¥13,085,600¥85,600¥16,285,600¥38,307,800

Total¥16,585,600¥85,600¥13,085,600¥85,600¥16,285,600¥38,307,800

Fair Value of Financial Instruments

Thousands of Yen

Carrying value (Note 1)

Fair value (Note 1)¥20,988,819¥20,988,819–(ii) Short-term debt

(16,500,000)(16,500,000)–(85,600)(86,550)¥950(67,850,200)(68,906,632)

1,056,432–––(iv) Long-term debt(v) Derivative transactions

Thousands of Yen

Due within
After one year, After two years, After three years, After four years,
one yearwithin two years within three years within four years within five years¥16,500,000
–
–
–
–

After
five years–

Long-term debt

85,600¥85,600¥85,600¥13,085,600¥12,285,600¥36,350,600

Total¥16,585,600¥85,600¥85,600¥13,085,600¥12,285,600¥36,350,600

Difference(i) Cash and bank deposits(iii) Current portion of long-term debt

Redemption schedule for debt as of August 31, 2013

Short-term debt

For the period from September 1, 2013 to February 28, 2014
The following table summarizes the carrying value and the estimated fair values of financial instruments as of February 28, 2014.

–

13. INVESTMENT AND RENTAL PROPERTIESThe Company owns leasable logistics facilities and leasable retail facilities (including land) in Greater Tokyo area and other areas
for the purpose of earning revenue from leasing. The following table summarizes the carrying value and the estimated fair value ofthese properties.
Thousands of Yen

For the period
from September 1, 2013
to February 28, 2014

For the period from January 31, 2013 to August 31, 2013
The following table summarizes the carrying value and the estimated fair values of financial instruments as of August 31, 2013.
Thousands of Yen

Carrying value(Note 1)

Difference(i) Cash and bank deposits¥16,460,088¥16,460,088–(ii) Short-term debt

(16,500,000)(16,500,000)–(85,600)(86,521)¥921(61,893,000)(62,528,386)

635,386–––(iii) Current portion of long-term debt(iv) Long-term debt(v) Derivative transactions

Note 1: The numbers in parenthesis indicate liabilities.
Note 2: Method for determining the fair value of financial instruments and derivative transactions(i) Cash and bank deposits and (ii) Short-term debt

30

Fair value(Note 1)

Nomura Real Estate Master FundFor the period
from January 31, 2013
to August 31, 2013

Carrying value
Balance at beginning of the period
Amount of increase (decrease) during the period
Balance at end of the period
Fair value at end of the period¥229,489,317–

9,555,585¥229,489,317

239,044,902

229,489,317¥252,818,000¥239,326,000

Note 1:	The carrying value represents the acquisition cost less accumulated depreciation.
Note 2:	The major increase in the carrying value during the period ended February 28, 2014 was mainly due to the acquisition of Recipe SHIMOKITA (10,880,665
thousand yen) and decrease in the carrying value during the period ended February 28, 2014 was mainly due to depreciation (total 1,497,812 thousandyen). The major increase in the carrying value during the period ended August 31, 2013 was mainly due to the acquisition of 54 properties including Landport
Urayasu (total 230,163,004 thousand yen) and decrease in the carrying value during the period ended August 31, 2013 was mainly due to depreciation (total
698,513 thousand yen).
Note 3:	The fair value as of February 28, 2014 and August 31, 2013 represents the sum of the appraisal values estimated by external real estate appraisers.
Nomura Real Estate Master Fund

31

The real estate rental revenues and expenses for the fiscal period ended February 28, 2014 and August 31, 2013 are presented in “15.
Breakdown of Real Estate Rental Revenues and Expenses.”Breakdown of Real Estate Rental Revenues and Expenses.”

16. LEASESThe future minimum rental revenues from tenants under non-cancelable operating lease of properties as of February 28, 2014 andAugust 31, 2013 are summarized as follows:

14. SEGMENT INFORMATION

Thousands of Yen

For the periods from September 1, 2013 to February 28, 2014 and from January 31, 2013 to August 31, 2013
Segment Information
Since the Company has been engaged in the real estate leasing business as a single segment, segment information has been omitted.

Related Information

As of February 28, 2014
¥13,530,103

Due within one year
Due after one year
Total

44,418,969

36,701,720¥57,949,072¥49,867,063

1. Information about products and services

17. DERIVATIVES AND HEDGE ACCOUNTING	Since revenues from external customers of products and services within a single segment are more than 90 percent of total
operating revenues, information about products and services has been omitted.

Derivative transactions as of February 28, 2014

2. Information about geographical areas

As of August 31, 2013¥13,165,343(1) There were no derivative financial instruments not subject to hedge accounting.
(2) Derivative financial instruments subject to hedge accounting were as follows:(1) Revenues		Since more than 90 percent of the total operating revenues were generated from external customers in Japan, geographicalbreakdown of revenues has been omitted.
(2) Property and equipment
		Since more than 90 percent of the total property and equipment on the balance sheet are located in Japan, geographicalbreakdown of property and equipment has been omitted.
3. Information about major clients	Since no single external client represents 10 percent or more of the Company’s total operating revenues, information aboutmajor clients has been omitted.

15. BREAKDOWN OF REAL ESTATE RENTAL REVENUES AND EXPENSES
Real estate rental revenues and expenses for the fiscal period ended February 28, 2014 and August 31, 2013 consist of the following:Thousands of Yen

Hedge accounting
methodType of derivative
instruments

Main hedged
itemInterest-rate swaps:
Special treatment ofReceived/floatinginterest-rate swaps
and paid/fixedLong-term debt

Notional amountDue after
one year
59,167,900

59,125,100

Fair
value

(*)

*Since the derivative financial instruments qualifying for the special treatment of interest-rate swaps are accounted for as one transaction together with their hedged
item, long-term debt, the fair value of these derivatives is included in that of related long-term debt (see “12. Financial Instruments (Note 2) (iii) Current portion of
long-term debt and (iv) Long-term debt”).

Derivative transactions as of August 31, 2013
(1) There were no derivative financial instruments not subject to hedge accounting.
(2) Derivative financial instruments subject to hedge accounting were as follows:
Thousands of Yen

Thousands of Yen

For the period
from September 1, 2013
to February 28, 2014
¥9,176,391

For the period
from January 31, 2013
to August 31, 2013
¥3,683,130

8,478,426

3,392,016

8,228,547

3,291,204

249,879

100,812

Other rental revenues

697,965

291,114

Parking revenues

78,087

34,578

Incidental income

578,563

253,525

Real estate rental revenues
Rental revenues
Rental revenues
Common area charges

Other miscellaneous revenues
Real estate rental expenses
Property management costs

3,011
1,258,501

337,141

131,204

Property management fees

152,886

60,336

Utility expenses

518,251

223,476

Casualty insurance

18,1177,386

Repairs and maintenance

185,677

58,105Land rents

71,65730,673

1,497,862

698,513

Depreciation
Other rental expenses
Real estate rental profits32

41,3152,918,849

Nomura Real Estate Master Fund

137,258

48,808¥6,257,542¥2,424,629

Method used for
determining fairvalue

Hedge accounting
methodType of derivative
instruments

Main hedged
itemInterest-rate swaps:
Special treatment ofReceived/floatinginterest-rate swaps
and paid/fixedLong-term debt

Notional amountDue after
one year
55,189,300

55,146,500

Fair
value

Method used for
determining fair
value

(*)

*Since the derivative financial instruments qualifying for the special treatment of interest-rate swaps are accounted for as one transaction together with their hedged
item, long-term debt, the fair value of these derivatives is included in that of related long-term debt (see “12. Financial Instruments (Note 2) (iii) Current portion of
long-term debt and (iv) Long-term debt”).

Nomura Real Estate Master Fund33

Independent Auditor’s Report

Investor Information
Structure
Specified Related Party
Parent Company of the Asset Management Company

Asset Custodian
Sumitomo Mitsui Trust Bank, Limited

Nomura Real Estate Master Fund, Inc.

Nomura Real Estate Holdings, Inc.

Asset Custody Agreement
Unitholders’ Meeting

Asset Management Company
Nomura Real Estate
Asset Management Co., Ltd.

Information Provision
Agreement

General Administrator(Organizational Administration, Accounting)
Administrator of Unitholders’ Register
Mitsubishi UFJ Trust and Banking Corporation

Board of Directors' Meeting
Executive Director

AssetManagement
Agreement

Takashi Kataoka

Supervisory Director

Sadahiko Yoshimura

Supervisory Director

Shuhei YoshidaTransfer Agency Agreement andGeneral Administration Agreement

AuditorErnst & Young Shin Nihon LLC

Information Provider
Nomura Real Estate Development Co., Ltd.

IR Calendar
Announcement of financial results(mid-April)

January

February

March

Fiscal period end(end of February)

April

Announcement of financial results(mid-October)

May

June

Commencement of payment of distribution
Dispatch of Asset Management Report(mid-May)

Breakdown of Unitholders
234,342 units
14.1%
225,459 units
13.5%

548,633 units
32.9%

656,826 units
39.4%

July

SeptemberAugustFiscal period end(end of August)October

328,538 units
19.7%

Other domestic corporations

177,306 units
10.6%

Financial institutions(including financial instruments
business operators)

712,813 units
42.8%

Top 10 Unitholders
Units heldShare

1 Japan Trustee Services Bank, Ltd.

282,629

16.97%

2 Trust & Custody Services Bank, Ltd.

90,6695.44%

3 Nomura Real Estate Development Co., Ltd.

87,820

5.27%

4 The Master Trust Bank of Japan, Ltd.

86,967

5.22%

5 The Nomura Trust and Banking Co., Ltd.

85,617

5.14%

6 Nomura Bank Luxembourg SA

51,443

3.09%

7 The Bank of New York, Non-Treaty JASDEC Account30,273

1.82%

20,775

1.25%

17,2671.04%

15,9480.96%

769,408

46.20%

Credit Suisse Securities (Europe) Limited PB
Omnibus Client Account
NORTHERN TRUST CO. (AVFC) RE 10PCT TREATY9ACCOUNT
8

Individuals and others

446,603 units
26.8%

10 State Street Bank and Trust Company
1st
Fiscal Period

34

Nomura Real Estate Master Fund

2nd
Fiscal Period

DecemberCommencement of payment of distribution
Dispatch of Asset Management Report(mid-November)

Unitholder
Foreign corporations and individuals

November

Total
Note: The figures are based on data as of February 28, 2014.

Nomura Real Estate Master Fund35