[For Translation Purposes Only]
October 15, 2015

For Immediate Release
To Whom It May Concern
Nomura Real Estate Master Fund, Inc.
Securities Code: 3462
Satoshi Yanagita, Executive Director
Asset Management Company:
Nomura Real Estate Asset Management Co., Ltd.
Norio Ambe, President & Chief Executive Officer
Inquiries:
Motomi Uki
Director and Managing Executive Officer
TEL. +81-3-3365-8767 nmf3462@nomura-re.co.jp

Notice Concerning Treatment of Goodwill Generated from the Merger

Nomura Real Estate Master Fund, Inc. (“NMF”) was established on October 1, 2015 through a consolidation-type merger(the “Merger”) implemented by former Nomura Real Estate Master Fund, Inc., Nomura Real Estate Office Fund, Inc. andNomura Real Estate Residential Fund, Inc.
NMF expects that goodwill (Note 1) would accrue upon the Merger and, pursuant to the Accounting Standards for
Business Combinations (Statement No. 21, as amended on September 13, 2013), intends to record the goodwill as assets
and amortize it using the straight-line method over 20 years on a regular basis. Currently, the amount of goodwill isprovisionally estimated to be ¥76,383 million (Note 2); the goodwill amortization for the fiscal period ending February 29,
2016 (the first fiscal period) is provisionally estimated to be ¥1,591 million, and that for the fiscal period ending August 31,
2016 (the second fiscal period) and thereafter is provisionally estimated to be ¥1,909 million.
The goodwill amortization will cause a difference between accounting profit and income for tax purpose due to thedifference between accounting and tax treatment (“Inconsistency between Accounting and Taxation”) and may result in
the imposition of corporation tax or other tax. However, following the tax reform in 2015, NMF intends to make cash
distributions in excess of its profit (“Distributions in Excess of Profit”) for the purpose of tax relief during theaforementioned goodwill amortization period (Note 3). Please refer to the attached Exhibit “Distributions in Excess ofProfit” for details.
The goodwill amortization is recorded as operating expenses for accounting purpose and, accordingly, NMF’s accounting
profit will decrease by an amount equivalent to the goodwill amortization during the aforementioned goodwill amortization
period. However, such amortization will not cause cash payout, and the amount equivalent to the goodwill amortization
will be distributed by way of the Distributions in Excess of Profit, and, therefore, cash distribution to unitholders will not beaffected.

(Note 1)“Goodwill” means, if an acquisition price of an acquirer for accounting purpose (the former Nomura Real
Estate Master Fund, Inc., in this case) exceeds the current net asset value at the time of the merger of anacquiree for accounting purpose (Nomura Real Estate Office Fund, Inc. and Nomura Real Estate Residential
Fund, Inc., in this case), such deference between those figures.

(Note 2)The provitionally estimated amount of goodwill is calculated on the assumption that NMF has succeeded theassets in the amount of ¥559,304 million in total and liabilities in the amount of ¥320,388 million in total ofNomura Real Estate Office Fund, Inc. and Nomura Real Estate Residential Fund, Inc., the acquirees under theAccounting Standards for Business Combinations, and that the acquisition cost of the Merger will be¥315,299 million (calculated based on the closing price (¥153,300) on September 25, 2015, the last trading
day of investment units of former Nomura Real Estate Master Fund, Inc., the acquirer under such accounting
standards).

(Note 3)

Investment corporations that satisfy prescribed requirements, among other things, paying dividends in theamount exceeding 90% of profit available for distribution, are treated as conduits for tax purpose and areallowed to include profit distributions in deductible expenses in calculating corporation tax. Previously, inthe case of the Inconsistency between Accounting and Taxation, even if investment corporations madeDistributions in Excess of Profit, such distributions were not included in deductible expenses, since they wereallowed to include only distribution of accounting profit in deductible expenses. Accordingly, corporation
tax or other tax were imposed on the portion of the Inconsistency between Accounting and Taxation, that is,
the amount of income for tax purpose exceeding accounting profit. Under the tax reform in 2015, wheninvestment corporations distribute the amount equivalent tothe amount of the Inconsistency between
Accounting and Taxation as the reserve for temporary difference adjustments, such amount has become to betreated as dividends for tax purpose and are accordingly allowed to be included in deductible expenses.

*Nomura Real Estate Master Fund, Inc. URL: http://www.nre-mf.co.jp/english/(For your reference) Distributions in Excess of Profit
Distributions in Excess of Profit mean cash distributions in excess of profit, and the two types thereof are as described
below.
Distributions in Excess of Profit

Category

Summary

Distribution of the reserve for temporary

Distribution reducing unitholders’ capital fordifference adjustments

tax purpose

Distribution for the purpose of tax relief regarding

Distribution based on depreciation expense,

the Inconsistency between Accounting andetc.

Taxation such as goodwill amortization

Tax treatment

As it is treated as dividends, it is processed asof theAs it is treated as a refund of capital, it isprocessed as a deemed transfer proceeds (adividend income, etc (Note).

distribution

portion thereof may be treated as a deemeddividend.).

(Principle)
NMF’s Distribution in Excess of Profit

In principle, NMF will make distribution of the reserve for temporary difference adjustments equivalent to theamount of goodwill amortization. (If the distribution of the reserve for temporary difference adjustments is lessthan the amount equivalent to the amount of goodwill amortization, the distribution reducing unitholders’ capitalfor tax purpose will be made in parallel.)(Note) In principle, accounting treatment of the dividends received will be as follows, in accordance with the category of the holding
purpose of the securities; however, please contact your accountants for the details.
Securities held for sale : Treated as a dividend received
Other securities: Reduction of the book value of securities< Explanatory diagram of Distributions in Excess of Profits>
In principle, the distribution

Total operating revenues

will be utilized for investment
in renovation that contributes

Depreciation expense

to improving thecompetitiveness of properties

Goodwill amortization

held, etc.

by the amount equivalent to
the goodwill amortization.

Distribution reducing
unitholders’ capital

Distributing the profit added

Other expenses
Distribution of the reserve for temporary
difference adjustments
Profit