3rd Fiscal Period Semi-Annual Report
March 1, 2014 to August 31, 2014
NOMURA REAL ESTATE MASTER FUND, INC.
8-5-1, Nishi-Shinjuku, Shinjuku Ward, Tokyo

Continuing to Deliver on Our Strategy

Stable Returns for Investors

Nomura Master Fund continues to build a robust portfolio andgreater diversification of assets and tenants to enable our goal ofreliably delivering stable income and dividends.

Logistics

RetailWe believe balanced growth is essential to delivering stable returns
and are committed to achieving this as exemplified by the acquisition ofa logistics facility and a retail property this fiscal period.

Superior Pipeline Enabledby the Nomura Real Estate GroupIs provided through a balanced portfolio of
Is delivered through aTokyo-centric portfolio (84.6%) logistics (51.3% of portfolio) and retailproperties (48.7%)
Is achieved by incorporating
Is delivered through long-term
established Nomura brands
contracts often 10 years or
Landport (logistics) andmore in length (71.4%)
GEMS (retail)Masato Yamauchi

Motomi Uki

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

Director and Executive Officer
Head of NMF Investment Management Division
Nomura Real Estate Asset Management Co., Ltd.

Stability

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

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 becharged 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 andregulations, 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 capability of
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.
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.

Is evidenced through a stablefinancial base with an averageborrowing period of more than
5.1 years and an LTV of
only 31.3%

Is evidenced through a highlong-term issuer rating of AA-

Is delivered through 99.9%
occupancy primarily tied up in
long-term contracts

Note: The above figures are based on data as of August 31, 2014.

Contents
Topics2-3

Portfolio Gallery

Top Message: Delivering Results Through Our Strategy

4-5

Corporate Governance

Portfolio Management: External Growth

6-9

Financial Section

Portfolio Management: Internal Growth

10-11

Independent Auditor’s Report

34

Finance Strategy

12-13

Investor Information

35

14-17
18
19-33

Nomura Real Estate Master Fund

1

Topics

TopicsMotomi Uki Appointed Head of NMF
Investment Management Division at
NREAM

Fourth Fiscal Period
Nomura Master Fund Acquires Universal CityWalk Osaka™.

Nomura Real Estate Asset Management Co., Ltd. (NREAM), theasset manager of Nomura Real Estate Master Fund, Inc. (Nomura
Master Fund), underwent an organizational restructuring that tookeffect on October 1, 2014. The desired impact for NMF and other
REITs and funds managed by NREAM is a speeding up of decision
making and increased transparency.

Director and Executive Officer
Head of NMF Investment Management Division
Nomura Real Estate Asset Management Co., Ltd.

NREAM Simplifies Organization to Quicken Decision-Making
As of October 1, 2014, NREAM, the asset manager for Nomura Master Fund, eliminated various redundancies in its organizationthat slowed investment and other decisions significantly. The new streamlined organization aims to enable NREAM to more
quickly identify opportunities and make decisions regarding investment in those opportunities. In line with this reorganization,
Motomi Uki was appointed as Executive Officer and Head of the NMF Investment Management Division of NREAM. The neworganization is shown below.
General Meeting of
Shareholders

Corporate Planning
Legal & Compliance
Board of Statutory
Auditors

Internal Audit
Accounting

President & CEO

Statutory Auditors

Discretionary Investment Management Section
Investment Performance Analysis Section

Investment Committee

FinanceCompliance Committee

Client Relations & Marketing

Risk Management Committee

Investment Management

NPR Valuation Committee

Product Management

Project Screening Committee

Research & Analysis Section
Acquisitions
Chief Strategy Officer

2

Nomura Real Estate Master Fund

Universal Studios Japan®

Nomura Master Fund plans to promote tenant replacements in line with “affinity with Universal Studios Japan®,” “thematiccharacter” and “entertainment quality” as it plans to “further enhance collaboration with Universal Studios Japan®” and “increase
sales through co-promotion and implementation of events, etc.” through the property management of Geo-Akamatsu, a valuable
member of the Nomura Real Estate Group.

Park Visitors and Sales(millions of people)
12.0

Number of visitors to Universal Studios Japan® (left axis)
Number of customers at Universal CityWalkTM (left axis)
Sales of Universal CityWalkTM (right axis)

The Wizarding World of Harry Potter TM
Opened on July 15, 2014

(billions of yen)

10.0
8.0
6.0
4.0
2.0
0.0

NPR Investment Management

Universal-city
Station

Universal CityWalk Osaka™ is a part of the large resort destination along with Universal Studios Japan® and four official hotels.
The center enjoys more than 5 million visitors a year. Nomura Master Fund acquired the retail and cooling facility portion of theproperty for a cap rate of 5.9% and has strong expectations for its ability to draw customers and to improve on this ability evenmore. The property has an occupancy rate of 95.9% as of August 31, 2014. Tenants include Hard Rock Café and Bubba Gump
Shrimp. Universal Studios Japan® attracts many guests domestically and from abroad thanks to The Wizarding World of Harry
Potter™, which opened in July 2014.

NOF Investment Management

NMF Investment Management

Hotel Kintetsu
Universal City

Nomura Master Fund contracted to acquire Universal CityWalk Osaka™ on August 8, 2014 and acquired the property on September
30, 2014 for 15.5 billion yen, 1 billion yen below the appraisal value. The property is located in Konohana Ward, Osaka City situateda 1-minute walk from Universal City Station. It is the sole licensed retail center of Universal Studios Japan® and located next to thetheme park.

Investment Management Planning

NRF Investment Management

Universal City

June 2001
Konohana Ward, Osaka City, Osaka Prefecture
1-minute walk from Universal City Station on JR Yumesaki Line
September 30, 201415.5 billion yen
5.9% (appraisal base)54.11% co-ownership of land and leasehold landCompartmentalized ownership of building representing retail and coolingfacility (compartmentalized ownership equaling 25.22% of voting rights)
Geo-Akamatsu Co., Ltd.

ine

Completion
Location
Nearest station
Acquisition date
Acquisition priceNOI yield
Ownership

ki L

Joined Nomura Real Estate Development Co., Ltd. in 1991.
Involved in the asset management business from 2006. After
working in real estate investment, project planning, fundmanagement, client relations and marketing, he was appointed
Director and Executive Officer at NREAM. Presently, serves as
Director, Executive Officer and Head of the NMF Investment
Management Division at NREAM.

Property manager

Board of Directors

Universal CityWalk
Hotel Keihan Osaka™

Overview of Propertyesa

We appreciate your continued support of Motomi Uki going forward.

Motomi Uki

YumAs a result of the restructuring, Motomi Uki was appointed Directorand Executive Officer of NREAM and Head of the NMF Investment
Management Division. Uki firmly stated that he will continue a solid
adherence to strategy like his predecessors. Uki said, “I will work
to balance assets under management and tenants even further toachieve greater stability in our return on income and an even steadierportfolio as we march to our medium term target of 400 billion yen
in AUM.”

FY 2001

FY 2002

FY 2003

FY 2004

FY 2005

FY 2006

FY 2007

Note: Figures for “Number of visitors to Universal Studios Japan®” from FY 2001 to FY 2008
are based on disclosure materials of USJ Co., Ltd. The figures from FY 2009 and after
are prepared by Nomura Real Estate Asset Management Co., Ltd. based on press
materials, etc.

FY 2008

FY 2009

FY 2010

FY 2011

FY 2012FY 2013

...

8.0
7.0
6.0
5.0
4.0
3.0
2.0
1.0
0.0

™ & © Warner Bros. Entertainment Inc. Harry Potter Publishing Rights © JKR.
(s14)
TM & © Universal Studios. All rights reserved.
CR14-3915

Nomura Real Estate Master Fund

3

Top Message

Delivering Results ThroughOur Strategy

Top Message

Path Toward Growth

On behalf of Nomura Master Fund and as Executive Director of Nomura Master
Fund, I would like to extend our gratitude to you, our unitholders, for your steadyand robust support.
I would like to take the following lines to report the results of the Third Fiscal
Period. It is with great pleasure that I report operating profits of 4,638 million
yen, net income of 4,079 million yen and dividend per unit of 2,450 yen. This
dividend exceeds our initial forecast by 50 yen per unit.
This was possible because of diligent asset management that reduced the
downtime when replacing Morisia Tsudanuma tenants, and reduced interest andloan arrangement fees, etc. With the Fourth Fiscal Period acquisition of Universal
CityWalk Osaka™, our asset size has grown to 56 properties and 253.5 billion yen(based on acquisition price). Our steady performance and growth has led to global
recognition and in addition to the five indexes in which Nomura Master Fund waspreviously included, we have been added to the GPR 250 Index on September 22,
2014.
These steps forward are proof positive that execution of our strategy of investingin retail and logistics assets – the backbone of Japan’s industry and economy –is delivering results. Utilization of the Nomura Value Chain continues to be astrong source of information on assets and has helped us meet our stated goals of
a portfolio with more than 80% of its assets in the Tokyo Area and with long lease
periods.

Realize
Stable Growth

Satoshi Yanagita

Aim to realize stable distribution based on clear concepts

Executive Director
Nomura Real Estate Master Fund, Inc.
Yanagita was born on October 20, 1957 andjoined Nomura Real Estate Development
Co., Ltd. in April 1981. Between April
2001 and March 2011, he served as generalmanager consecutively for the Planning
Section of the Residential Company, General
Affairs Department and concurrently for
the General Affairs Department and General
Affairs Trial Department. He became
Executive Officer of Nomura Living Support
Co., Ltd. in April 2011 and also served as
Director from April 2012. He currently
serves as an Audit & Supervisory Board
Member of Nomura Real Estate Partners
Co., Ltd. and assumes the post of Executive
Director of Nomura Real Estate Master
Fund, Inc. as of December 1, 2014.

Increase investment unit price

Maximize real estate value

Secure stable income

Investment strategy

Operating strategy

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

Against backdrop of long-term lease agreements• Build a stable ﬁnancial base
• Finance in response to the market• Maintain a high occupancy rate
• Maintain and enhance rent levels

Image of Growth Strategy
External Growth

We will continue to adhere to the conservative financing strategy of growing with an operational LTV level between
30% and 40% so that we can consistently deliver a stable dividend to you our unitholders. The following pages outline
our achievements.

Medium-term asset size target

Unique property acquisition channel of asset manager

Thank you again for your support.

400

billionyen

Nomura Real Estate Group Pipeline

Nomura Value ChainFirst Look Support of the Robust Pipeline

253.5
billion yen

Nomura Real Estate Development, one of the leading developers in Japan andNomura Master Fund’s sponsor, develops a wide variety of real estate from
Information provision agreement
residential and office to logistics, retail and others. NREAM, the asset manager
of Nomura Master Fund, enjoys the robust support of its sponsor through an
information provision agreement that, in essence, 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 longterm.

227.6
billion yen

238.0
billion yen

Nomura Real Estate Development has assumed responsibility for executing theplanning, development and leasing of logistics and retail facilities in Nomura
Master Fund’s portfolio.
4

Nomura Real Estate Master Fund

External Growth● Creation of stable cash flow based on long-term lease agreements

Ratio of contracts of 10 years or more

71.4%

Diversified Management Support from the Nomura Real Estate GroupAs a member of the Nomura Real Estate Group, a diversified real estate group, Nomura Master Fund possesses the inherent
advantage of being able to utilize the Group’s extensive capabilities in leasing, administration and property management. By
applying this expertise, Nomura Master Fund ensures it will be able to continuously improve tenant satisfaction by maintaining
and increasing the value of the assets it manages, and in turn deliver this stability
and quality to its investors.

Around 5 years
Stability● Strong leasing abilities of Nomura Real Estate Group● Increasing tenant satisfaction through appropriate renewals● Further increasing of incidental revenues and increase ofprofitability through cost reductions

40%

LTV: 31.1%

32.3%

1st fiscal
period end

2nd fiscal
period end

Operational LTV level
30%–40%31.3%

30%
3rd fiscal
period end

Sept. 2014

Aim to diversify real estate under management and tenants by expanding asset size, and realize the building of an increasingly stable portfolio

Nomura Real Estate Master Fund

5

Portfolio Management

External Growth

External Growth

Nomura Master Fund continues to adhere to its external growth strategy of “Growth without sacrificing stability.”
The Japanese real estate market has markedly heated up since the Nomura Master Fund was listed on the J-REIT
market as the largest listing ever. There is generally conspicuously more capital in the market than there are deals.
This means two things. It is a time to continue to adhere to our conservative acquisition strategy and it is a time
when an entity like ours that can leverage the diversity of Nomura Real Estate Group can truly distinguish itself
among the competition via its sourcing prowess.
We have proven this by our acquisition of Recipe SHIMOKITA in the Second Fiscal Period at below appraisal value,
our acquisition of equity interest in a silent partnership with preferential negotiation rights this fiscal period and withthe stunning acquisition of Universal CityWalk Osaka™ next to Universal Studios Japan® early in the Fourth Fiscal
Period. These acquisitions bring our total portfolio size, based on acquisition price, to 253.5 billion yen and give us 56
properties. We are well on our way to our medium-term goal of 400 billion yen.

The Robust Nomura Real Estate Pipeline
Nomura Real Estate is a diversified property developer that develops logistics, retail, residential, office and other properties. This
proven track record, combined with the Nomura Real Estate Group’s extensive sourcing network, mean that Nomura Master Fundhas a robust pipeline for sourcing properties. This distinct advantage is evidenced in the acquisition of Universal CityWalk Osaka™
and demonstrates Nomura Master Fund’s steady commitment to realizing a portfolio of 400 billion yen within around five yearsof the end of its First Fiscal Period.

Logistics

RetailSurprisingly, despite competition and the hot market we have increased our unrealized gain to 18.9 billion yen asof the end of the Third Fiscal Period or, put differently, our running appraisal value is 273.6 billion yen as of theacquisition of Universal CityWalk Osaka™ while the actual acquisition price was 253.5 billion yen, meaning thedifference between appraisal and acquisition price has climbed past 20 billion yen.
Additionally, in this environment our pipeline only increases in size as indicated on the next page. Nomura MasterFund is committed to applying the competitive advantages of the Nomura Real Estate Group to creating an optimalbalanced portfolio of retail and logistics properties.

● 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● Ability to take advantage of large, high performance

facilities emerging as industry structure changes● Station-front retail: Investment in facilities in close

proximity to stations with dense traffic● Residential-oriented retail: Investment in facilities inresidential areas with high populations

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

Investment Perspective

Location of Portfolio● Investment is focused on the Tokyo Area (80% or more of

portfolio in principle), where there will be continued strong
demand40km

17● Focus on acquisitions of relatively new properties built

Landport Iwatsuki (Tentative Name)(to be completed in September 2016)4less than 10 years ago for a competitive advantage in themarketplace

16

6

20km

GEMS Shibadaimon (Tentative Name)(to be completed in February 2016)16

Main Target
Area

Tokyo Area
X
Property Age of
10 years or less Within
20km

20 – 40km

5 years

14

Over
40km

Over 10 years

Haneda Airport(Tokyo International Airport)

16

Three major
metropolitan areas

10 yearsTokyo
Station20(excluding Tokyo Area)

Landport Hachioji II (Tentative Name)(to be completed in September 2016)

16

246

Tokyo Area
Surrounding areas ofcabinet-orderdesignated cities
134

Property Age

16

Logistics
RetailExpressway

Investment Universe
Landport Kashiwa Shonan (Tentative Name)(to be completed in March 2016)

GEMS Ichigaya(completed October 2014)

Nomura Fudosan Kichijoji
Building(completed July 2014)

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

External Growth

Portfolio Distribution

Portfolio Table (as of the end of the 3rd 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 Growth
Use Area No.

Name

Location

Acquisition
Price

Investment
Ratio(millions of yen)Less than 5 years

Other Areas

10 years or more

5.4%

5.8%

10.0%

45.4%

84.6%

13.8 years
48.8%
Other

Tokyo Area
investment ratio

Averageproperty age

Logistics

Kinki Area

Distribution of Portfolio Age

5 to 10 years

Lease Term

Portfolio Composition by
Property Type(by leased area)
Tokyo

Less than 2 years 0.2%
5 to 10 years
20.0%

51.3%

28.7%

26.1%

12.7 years

Kinki

48.7%

Averagelease term

Logistics

Retail Properties

2 to 5 years 2.2%

Residential
facility type

Retail

Other

71.4%
Station-front typeTokyo

Geographical Diversification

10 years or more

Remaining Lease Term
10 years or more

21.7%

18.6%

Averageremaininglease
term 24.8%
34.9%
2 to 5 years

Other

6.1 years

Tokyo

Less than 2 years

Retail (land only)(by leased area)

5 to 10 years

Urayasu City, Chiba
Itabashi Ward, Tokyo
Kawagoe City, Saitama
Atsugi City, Kanagawa
Sagamihara City, Kanagawa
Sagamihara City, Kanagawa
Hachioji City, Tokyo
Kasukabe City, Saitama
Funabashi City, Chiba
Atsugi City, Kanagawa
Hanyu City, Saitama
Kawaguchi City, Saitama
Kawaguchi City, Saitama
Atsugi City, Kanagawa
Ota City, Gunma
Ota City, Gunma
Ota City, Gunma
Oura-Gun, Gunma
Narashino City, Chiba
Yokosuka City, Kanagawa
Setagaya Ward, Tokyo
Shinjuku Ward, Tokyo
Kawasaki City, Kanagawa
Toshima Ward, Tokyo
Machida City, Tokyo
Chiba City, Chiba
Fuchu City, Tokyo
Saitama City, Saitama
Shibuya Ward, Tokyo
Yokohama City, Kanagawa
Yokohama City, Kanagawa
Yokohama City, Kanagawa
Suita City, Osaka

17,40015,71013,70011,41010,600
8,700
8,250
7,340
4,660
4,590
3,810
3,750
2,830
2,690
3,430
2,170
650
330
16,60013,64010,407
4,260
4,000
3,990
3,440
3,080
2,730
2,600
2,490
1,700
1,560
1,000
8,930

7.3
6.6
5.8
4.8
4.5
3.7
3.5
3.1
2.0
1.9
1.6
1.6
1.2
1.1
1.4
0.9
0.3
0.1
7.0
5.7
4.4
1.8
1.7
1.7
1.4
1.3
1.1
1.1
1.0
0.7
0.7
0.4
3.8

19,10017,30014,60012,50011,300
9,530
8,720
8,050
5,060
4,960
4,250
4,150
3,150
3,030
3,690
2,390
704
356
17,30014,70010,600
4,340
4,300
4,200
4,090
3,320
3,110
2,810
2,520
1,820
1,720
1,230
10,10016 Merad Owada

Osaka City, Osaka

6,640

2.8

7,060

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

820
Total

238,023

500

–

–

Total

500

–

–

Ibaraki City, Osaka

Leasable
Floor Space

PML
(%)

(m2)

4.16
6.42
3.73
6.15
4.32
7.30
5.79
5.90
3.40
6.15
2.72
2.92
2.92
5.36
1.40
1.35
1.03
3.76
4.70
6.89
4.38
5.81
7.39
8.36
10.85
3.90
2.76
5.40
4.18
4.89
9.33
9.06
5.43

4,830
3,510
5,040
1,790
2,810
1,840
1,740
1,270
1,020
898
816
823
784
804
614
490
376
361
210
167

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
39,624.63
29,383.65
6,295.22
3,611.59
14,446.48
2,693.93
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
14,941.54
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

0.3

870

5,704.24–

100.0

257,123

897,406.28

2.68(Retail)(Logistics)

3.33
3.97
3.89
2.42
1.57
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–

Note: The above figures are based on data as of August 31, 2014.

Tokyo

Nomura Real Estate Master Fund(millions of yen)

1 Landport Urayasu
2 Landport Itabashi
3 Landport Kawagoe
4 Landport Atsugi
5 Sagamihara Tana Logistics Center
6 Sagamihara Onodai Logistics Center
7 Landport Hachioji
8 Landport Kasukabe
9 Funabashi Logistics Center
10 Atsugi Minami Logistics Center B Tower
11 Hanyu Logistics Center
12 Kawaguchi Logistics Center B Tower
13 Kawaguchi Logistics Center A Tower
14 Atsugi Minami Logistics Center A Tower
15 Ota Nitta Logistics Center
16 Ota Higashishinmachi Logistics Center
17 Ota Kiyohara Logistics Center
18 Chiyodamachi Logistics Center
1 Morisia Tsudanuma
2 Yokosuka More's City
3 Recipe SHIMOKITA
4 EQUINIA Shinjuku
5 Kawasaki More's
6 EQUINIA Ikebukuro
7 covirna machida
8 Nitori Makuhari
9 Konami Sports Club Fuchu
10 FESTA SQUARE
11 GEMS Shibuya
12 Sundai Azamino
13 EQUINIA Aobadai
14 Megalos Kanagawa
15 Izumiya Senrioka

Investment Securities
Ryoke Capital Godo Kaisha
1
Silent Partnership Equity Interest

8(%)

Appraisal
Value

Kawaguchi City,
Saitama–––

Nomura Real Estate Master Fund–

9

Portfolio Management

Internal GrowthInternal Growth

Photovoltaic Power Generation:
Partnering to Deliver Greater
Dividends

The Impact of the Consumption Tax Hike
One of the largest new governmental revenue enhancing measures of the year was the raising of the consumption tax
beginning April 1, 2014 from 5% to 8%. Naturally, with the rush of consumption that occurred as the implementation dateapproached, there were fears that retail consumption would take a major hit.

Nomura Master Fund believes that supplying the
Landport Urayasu converting empty space into mass power generation
power grid with solar energy can be an effective sourceof income that can help raise dividends. The logistics facilities in the portfolio generally have flat roofs and a broad
floor space that enables significant generation of photovoltaic power. Following the contracting for services with
Yokohama Business Park Heating and Cooling Supply, photovoltaic power generation facilities were installed on fiveof our Landport facilities and the renting of the roofs officially started on October 1, 2014. Nomura Master Fundprojects annual rental income of 18,240,000 yen. We lease the roofs of the five Landport facilities to Yokohama
Business Park Heating and Cooling Supply who then pays the Nomura Master Fund rent while selling electricity toTokyo Electric Power Company (TEPCO).

Nomura Master Fund confirmed the trends for the industry and for our properties following the consumption increase in
March. It was found that there was almost no impact on food products and other daily necessities. In the case of luxury goods,
following last-minute demand in March, there was a reactionary fall in April, but generally sales have recovered since May.
We have mapped out two of our properties below. In the case of Yokosuka More’s City there was no large impact regarding
fresh food and other perishable products that cannot be stored for long periods, such as fish. Furthermore, sales promotions
were actively carried out to suppress any reactionary fall. In the case of FESTA SQUARE (Yaoko), customer traffic wasmaintained through new sales promotions and the sale of private brand goods have been doing well. Overall, thus we foundthe impact on sales of the consumption tax hike to be limited.

Status of Properties Owned
Monthly Sales of Yokosuka More’s City

Dedication to Proactive Management Positively Impacting Dividends
In the last semi-annual report, Nomura Master Fund outlined the scheduled renovations of Morisia
Tsudanuma that were planned as positive reinforcement of our portfolio and a demonstration of theprowess of the Nomura Real Estate Group. Our efforts included renovating the west side passage on
the first floor and building a more attractive outside deck on the west side of the second floor. Nomura
Master Fund’s asset manager also took proactive steps to promote the improvements through eventsand an editorial tie-up with the Tsudanuma Walker magazine.

(February 2013 = 100)

150

160
150
140
130
120
110
100
90
80

140
130
120
110
100
90

Status of Overall Retail Market
Comparison of Sales at Existing Stores (Year-on-Year)

Tsudanuma Walker
magazine

Our diverse tenant base andlease terms insulate us fromindividual market upheavals
and strengthen our portfolio.

Fukuyama Transporting 10.3%
Izumiya 7.8%
Amazon Japan Logistics 6.3%
Neovia Logistics Services 5.6%
Yokohama Okadaya 4.9%
Mitsui-Soko Logistics 4.7%

Feb. 2014

896,217.18m

Total number of tenants

243

Nomura Real Estate Master Fund

Other 43.8%
Shinkai Transport Systems 3.9%
Otsuka Warehouse 3.9%
ASKUL 4.2%
Not disclosed 4.6%

Mar. 2014

Apr. 2014

May 2014

Supermarkets

Jun. 2014

Jul. 2014(%)

Logistics

12

8

1.1
1.2
4.6

2
0

Retail

0.1

10

3.2

10.3
0.6

2.0

0.9

4.2
1.2

4.7

2.3

10.2

4
2

10

Jan. 2014

Department stores

Diversification of Lease Maturities

6

Total rent area

Shopping centers

(%)
30
25
20
15
10
5
0
-5
-10
-15

From left:
West side passage on first floor
New and improved outside deckon west side of second floor
Sales promotion event

TenantDiversification

Feb
. 20
13
Ma
r. 2
01
3
Apr
. 20
13
Ma
y2
01
3
Jun
. 20
13
Jul.
20
13
Aug
. 20
Sep 13
. 20
13
Oct
. 20
13
No
v. 2
01
3
Dec
. 20
Jan 13
. 20
14
Feb
. 20
14
Ma
r. 2
01
4
Apr
. 20
14
Ma
y2
01
4
Jun
. 20
14

80

Feb
. 20
13
Ma
r. 2
01
3
Apr
. 20
1
3
Ma
y2
0
Jun 13
. 20
13
Jul.
20
Aug 13. 20
Sep 13
. 20
13
Oct
. 20
13
No
v. 2
01
3
Dec
. 20
1
3
Jan
. 20
Feb 14
. 20
14
Ma
r. 2
01
4
Apr
. 20
1
4
Ma
y2
01
4
Jun
. 20
14
Jul.
20
14

The careful planning is evident in the results being achieved that are at or better than those initiallyprojected. On an annual basis, the number of customers increasing by 80,000 people, the averagesales per customer increasing 36 yen compared to before renovations, sales spiking by nearly 500
million yen and rents increasing by 51 million yen. The Morisia Tsudanuma experience proves thatprudently planned renovations can deliver desired results.

Monthly Sales of FESTA SQUARE (Yaoko)(February 2013 = 100)

3.5
3.9

1.8

1.6

6.7

4.7
2.2

0.3

2.0

0.4

0.2

0.3

4.2
1.1

0.2
1.5

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
Feb.
Aug.
Feb.
Aug.
Feb.
Aug.
Feb.
Aug.
Feb.
Aug.
Feb.
Aug.
Feb.
Aug.
Feb.
Aug.
Feb.
Aug.
Feb.
Aug.
2015 2015 2016 2016 2017 2017 2018 2018 2019 2019 2020 2020 2021 2021 2022 2022 2023 2023 2024 2024
Note: The above figures are based on data as of August 31, 2014.

Nomura Real Estate Master Fund

11

Finance Strategy

Finance Strategy

Conservative Financial Strategy Delivering Stability

Diversification of Loan Maturities

Nomura Master Fund is committed to growth while maintaining a conservative LTV and a high degree of financial
stability. The Third Fiscal Period generated clear results that revealed market acceptance of our strategy.
This Fiscal Period we were able to lower our interest-bearing debt while also increasing our ratio of long-term debt andbringing our ratio of fixed interest rate debt to nearly 100%. This was done through various refinancing of maturingdebt, the use of interest-rate swaps for floating rate debt and proactive repayment of debt ahead of repayment dates.
Clearly, our achievements mean greater stability over a longer period of time.
Furthermore, Nomura Master Fund acquired Universal CityWalk Osaka™, one of Osaka’s retail leaders, early in the
Fourth Fiscal Period, and did so while keeping our LTV in the mid-thirty percentile range.
Nomura Mater Fund also broadened its banking formation this fiscal period adding Japan’s leading life insurer,
Nippon Life Insurance; one of the megabanks of Japan, Resona Bank; and one of the leading regional banks of Japan,
Bank of Fukuoka, to the formation.
Additionally, we will continue to work to diversify our repayment dates so that we are never presented with asituation in which we have excessive amounts of repayment dates in a short period of time that place great financialpressure on our operations.
Nomura Master Fund is committed to following the present course that has proven growth is possible despite
adherence to a prudent and conservative financial policy.

80.3

billion yen

Long-term debt ratio

Average remaining years
to maturity

12.2

12

1.12%

Average interest rate

Ratio of fixed interest rate
*Includes fixed interest rates through interest-rate swap agreements

5.1
years

31.3%

98.8%

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

10.8

10.0

9.0

9

5.5

6

4.0

4.0

5.0

4.0

3

1.0

0.9

0

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
Feb. Aug. Feb. Aug. Feb. Aug. Feb. Aug. Feb. Aug. Feb. Aug. Feb. Aug. Feb. Aug. Feb. Aug. Feb. Aug. Feb. Aug.
2015 2015 2016 2016 2017 2017 2018 2018 2019 2019 2020 2020 2021 2021 2022 2022 2023 2023 2024 2024 2025 2025
Note: Nomura Master Fund has clearly spread out loan maturities enabling the REIT to consistently refinance even in potentially severe economic climes.

Credit Ratings

Nomura Master Fund’s bank formation boasts loans fromleading Japanese financial institutions and the average interest
rate of 1.12% needs no explanation as to the high evaluation of
Nomura Master Fund’s management by financial institutions.

These key markers show even greater evidence of a conservative, well-executed strategy through easily identifiable progress.

99.9%

13.0

Bank Formation

Key Debt Markers

Total amount ofinterest-bearing debt

(billions of yen)
15

Financial Institution(billions of yen)

The Bank of Tokyo-Mitsubishi UFJ, Ltd.

16.5

Sumitomo Mitsui Banking Corporation

16.5

Mizuho Bank, Ltd.

11.3

Mitsubishi UFJ Trust and Banking Corporation

6.8

Sumitomo Mitsui Trust Bank, Ltd.

6.8

The Norinchukin Bank

6.8

Development Bank of Japan Inc.

6.8

Mizuho Trust & Banking Co., Ltd.

5.8

Resona Bank, Ltd.

1.0

Nippon Life Insurance Company

1.0

The Bank of Fukuoka

1.0
Total

Credit Rating
AgencyJapan Credit Rating Agency, Ltd. (JCR)

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

Commitment Line
Agreement

10billion yen
Mizuho Bank, Ltd.

(Commitment period:
1 year)80.3

Note 1: The figures are based on data as of August 31, 2014.
Note 2: Total may differ from the sum of the figures due to rounding.

Note: The figures are based on data as of August 31, 2014.

12

Nomura Real Estate Master Fund

Nomura Real Estate Master Fund

13

Portfolio Gallery

Portfolio Gallery

The fruits of NMF’s commitment
to balanced growth of logistics
and retail facilities.

Atsugi Minami Logistics Center A Tower

Logistics/Tokyo Area

Landport Kawagoe

Funabashi Logistics Center

Landport Urayasu

Landport Atsugi

Kawaguchi Logistics Center A Tower

Landport Itabashi

Sagamihara Tana Logistics Center

Kawaguchi Logistics Center B Tower

Hanyu Logistics Center

Landport Kasukabe
Atsugi Minami Logistics Center B Tower

Logistics/Other
Ota Kiyohara Logistics Center

Landport Hachioji

14

Nomura Real Estate Master Fund

Sagamihara Onodai Logistics Center

Chiyodamachi Logistics Center

Ota Higashishinmachi Logistics Center

Ota Nitta Logistics Center

Nomura Real Estate Master Fund

15

Portfolio Gallery

Retail/Tokyo

Retail/Kinki

Station-front type
Residential facility type

Station-front type
Residential facility type
Morisia Tsudanuma

Recipe SHIMOKITAGEMS Shibuya

Kawasaki More’s

Konami Sports Club Fuchu

EQUINIA Ikebukuro

Izumiya Senrioka

Sundai Azamino

EQUINIA Shinjuku

Merad Owada

Izumiya Obayashi

Izumiya Yao

Retail/Other
Station-front type
Residential facility type
Ichibancho stear

EQUINIA Aobadori

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)/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

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 andInvestor Confidence
Nomura Real Estate Asset Management (NREAM) created its compliance rules and structure at the dawn of theJapanese real 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 Division, the Compliance Officer, who is thehead of the Compliance Division, and the Compliance Committee.
The Compliance Division handles risk management and Risk Management Committee matters along with thoserelated to compliance and the Compliance Committee. Thus, the Compliance Division is the corporate body that
ensures day-to-day 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 in the event of compliance violations by NREAM. The Compliance Committee also analyzes deals withinterested parties at the behest of the Compliance Officer and considers improvements needed to maintaincompliance with laws and regulations. The Compliance Committee additionally administers and verifies achievementof the company wide Compliance Program.

Financial Section

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

Contents

Preparer and Presenter of Proposal
Preparation of proposal

Submission

Compliance Officer

Proposal is redirected if the proposal relates to a materialtransaction with a related party or if the Compliance Officer
otherwise deems it necessary

Compliance Committee

提出 of proposal
Confirmation

Approval

Investment Committee
Investment decision

If transaction stipulated in
Article 201-2, Paragraph 1 ofInvestment Trusts Act
Board of Directors Meeting
Approval

18

Nomura Real Estate Master Fund

Deliberation/Approval

Report Deliberation Progress and Investment Decision
Proposal is redirected when the Compliance Officer identifies any criticalissue with the proposal during Investment Committee deliberations
Suspend Investment Committee deliberation and undergo deliberation byCompliance Committee

Balance Sheet

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 August 31, 2014

Thousands of Yen

As of February 28, 2014

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

LIABILITIESCurrent Assets:
Cash and bank deposits
Rental receivables
Income taxes receivable
Other current assets
Total current assets¥16,627,667¥20,988,819

219,443

107,911654

164

310,976

260,473

17,158,740

21,357,367

Land

139,623,188

139,617,049

Buildings and structures

98,472,843

97,760,234

Tools, furniture and fixtures

14,78911,618Construction in progress

3,306

23,226

Subtotal

238,114,126

237,412,127

Less accumulated depreciation(3,731,614)(2,196,325)

234,382,512

235,215,802

Investments and Other Assets:
Leasehold rights

3,828,713

3,829,100

Intangible assets

12,694

11,389Investment securities

487,473–

Long-term prepaid expenses

614,602613,882Long-term deposits

39,206

39,206

Security deposits

516,126

516,126

5,498,814

5,009,703¥257,040,066¥261,582,872

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

Trade accounts payable¥408,450¥330,137–

16,500,000

Current portion of long-term debt

85,60085,600

Other accounts payable

267,880

207,946

Accrued expenses

24,48910,054716

652

Short-term debt

Accrued income taxes

Property and Equipment, at Cost:

Net property and equipment

Current Liabilities:

Accrued consumption taxes

275,529

179,119

Rent received in advance

1,482,281

1,459,898

1,464

940

2,546,409

18,774,346

Long-term debt

80,307,400

67,850,200

Security deposits from tenants

8,985,005

8,976,172

Total long-term liabilities

89,292,405

76,826,372

Total Liabilities

91,838,814

95,600,718

161,120,405

161,120,405

4,080,847

4,861,749

Total surplus

4,080,847

4,861,749

Total unitholders’ equity

165,201,252

165,982,154

Total Net Assets

165,201,252

165,982,154

Total Liabilities and Net Assets¥257,040,066¥261,582,872

Other current liabilities
Total current liabilities
Long-term Liabilities:

NET ASSETS
Unitholders’ Equity:
Unitholders’ capital
SurplusRetained 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 March 1, 2014
to August 31, 2014

For the period from March 1, 2014 to August 31, 2014

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

Thousands of Yen

Unitholders’ Equity

Operating Revenues and Expenses
Operating Revenues:
Real estate rental revenues
Gain on investments in silent partnership
Operating Expenses:
Real estate rental expenses
Asset management fees
Asset custody fees
Administrative service fees
Other operating expenses¥9,464,316
4,151
9,468,467¥9,176,391–
9,176,391

Balance as ofMarch 1, 2014
Cash distribution paid

3,872,940
791,955
14,756
63,23287,3804,830,263

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

Balance as ofAugust 31, 2014

4,638,204

5,348,410

Surplus

Unitholders’CapitalUnits

Retained
Earnings

1,665,260 ¥161,120,405

Total Surplus

Total
Unitholders’EquityTotal
Net Assets¥4,861,749¥4,861,749 ¥165,982,154 ¥165,982,154(4,860,893)(4,860,893)(4,860,893)(4,860,893)–

4,079,991

4,079,991

4,079,991

4,079,991

1,665,260 ¥161,120,405¥4,080,847¥4,080,847 ¥165,201,252 ¥165,201,252–

Net income–

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

Operating Profit

Unitholders’ Equity

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

1,709
–
14
1,723

1,874
22,211
11
24,096443,426
114,228
1,042
558,696398,386
108,657
3,750
510,793

Ordinary Income

4,081,231

4,861,713

Income before Income Taxes

4,081,231

4,861,713

Income Taxes:
Current
Deferred

1,257
(17)

868
36

Net Income

4,079,991

4,860,809

Retained earnings brought forward

856

940

Retained Earnings at End of Period¥ 4,080,847¥ 4,861,749

Non-Operating Expenses:
Interest expense
Loan arrangement fees
Other non-operating expenses

Balance as of
September 1, 2013
Cash distribution paid
Net income
Balance as ofFebruary 28, 2014

Surplus

Unitholders’CapitalUnits

Retained
Earnings

1,665,260 ¥161,120,405–

Total Surplus

Total
Unitholders’EquityTotal
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–

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 March 1, 2014
to August 31, 2014

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

Cash Flows

1. ORGANIZATION
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 from Operating Activities
Income before income taxes
Depreciation
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¥4,081,231
1,537,049(1,709)443,426(111,532)–(720)–
78,313
7,575
96,40922,384(64,648)
6,087,778
1,709(428,990)(1,682)
5,658,815¥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

On 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 August 31, 2014, the Company owned a portfolio of 55 logistics facilities and retailfacilities containing an aggregate of approximately 897,406.28 square meters of leasable area and leased space to 243 tenants.

Cash Flows from Investing Activities
Payments for purchases of property and equipment
Payments for purchases of leasehold rights and intangible assets
Purchases of investment securities
Proceeds from withdrawal of investment securities
Reimbursement of security deposits to tenants
Proceeds from security deposits from tenants
Payments for security deposits
Net cash provided by (used in) investing activities(674,392)(3,102)(511,356)
23,883(79,169)
102,688–(1,141,448)(11,617,397)(14,506)––(114,767)
418,416(200)(11,328,454)

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.

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
Distributions to unitholders–(16,500,000)
12,500,000(42,800)(4,835,719)

5,000,000(5,000,000)
6,000,000(42,800)(1,222,646)(8,878,519)

4,734,554

Net cash provided by (used in) financing activities
Net Increase (Decrease) in Cash and Cash Equivalents(4,361,152)

4,528,731

Cash and Cash Equivalents at Beginning of Period

20,988,819

16,460,088

Cash and Cash Equivalents at End of Period¥16,627,667¥20,988,819

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

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, theCompanies Act of Japan and the Financial Instruments and Exchange Act of Japan and related regulations, which are different incertain 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
is presented herein as additional information. Amounts have been rounded to the nearest thousand yen in the accompanying
financial statements and the notes thereto, whereas amounts were truncated in the Japanese financial statements prepared inaccordance with Japanese GAAP.

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 lesswhen purchased.

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 - 20 years
2 - 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.

Investment securities
Non-marketable securities are stated at cost determined by the moving average method. For the silent partnership equity interest,
the method of allocating the partnership’s profit/loss is based on the Company’s proportional interest.

24

Nomura Real Estate Master Fund

Nomura Real Estate Master Fund

25

Notes to Financial Statements
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.

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.

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
recognized on an accrual basis over the life of each lease. Utility charge reimbursements are recognized when earned and theiramounts are reasonably estimated.

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

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 August 31, 2014
Acquisition costs
Book value¥10,923,206¥10,923,206
3,522,797(106,680)
3,416,117
128,699,982
128,699,982
94,950,046(3,623,387)
91,326,659
14,789(1,547)
13,242As 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

3,306

3,306

23,22623,226¥234,382,512¥234,382,512¥235,215,802¥235,215,802

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 the fiscal period.

6. SHORT-TERM DEBT AND CURRENT PORTION OF LONG-TERM DEBT

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 forthe fiscal period ended February 28, 2014 and no capitalized property related taxes were incurred in the fiscal period ended August
31, 2014.

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

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

Unsecured loans from banks due
on May 26, 2014––

¥8,000,000

0.34636%

Income taxes

Unsecured loans from banks due
on May 26, 2014––

8,500,000

0.34636%

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

Unsecured loans from a bankdue on May 26, 2025 (Note 2)¥42,800

2.21812%42,8002.21812%

Consumption taxes

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

42,8002.17000%

42,8002.17000%

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.

Total¥85,600¥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 months 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 August 31, 2014. The total unused amounts of such credit facilities were ¥10,000 million as of August 31, 2014.

4. CASH AND CASH EQUIVALENTS
Cash and cash equivalents as of August 31, 2014 and February 28, 2014 consist of the following:Thousands of Yen

As of August 31, 2014

As of February 28, 2014

Cash and bank deposits¥16,627,667¥20,988,819

Cash and cash equivalents¥16,627,667¥20,988,819

26

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27

Notes to Financial Statements
7. LONG-TERM DEBT

9. PER UNIT INFORMATION

Long-term debt as of August 31, 2014 and February 28, 2014 consist of the following:

Net assets per unit and net income per unit as of August 31, 2014 and February 28, 2014 were as follows:

As of August 31, 2014
AmountWeighted-average(Thousands of Yen)
interest rate (Note 1)
Unsecured loans from banks dueon November 26, 2016
Unsecured loans from banks due
on March 26, 2017
Unsecured loans from banks due
on May 26, 2018
Unsecured loans from banks dueon November 26, 2018
Unsecured loans from banks due
on May 26, 2019
Unsecured loans from a bankdue on May 26, 2019
Unsecured loans from banks dueon November 26, 2019
Unsecured loans from banks due
on May 26, 2020
Unsecured loans from a bankdue on May 26, 2020
Unsecured loans from banks due
on May 26, 2021
Unsecured loans from a bankdue on May 26, 2021
Unsecured loans from a bankdue on November 26, 2021
Unsecured loans from a bankdue on November 26, 2021
Unsecured loans from a bankdue on May 26, 2022
Unsecured loans from a bankdue on May 26, 2023
Unsecured loans from a bankdue on May 26, 2023
Unsecured loans from a bankdue on May 26, 2023
Unsecured loans from a bankdue on May 26, 2025 (Note 2)
Unsecured loans from a bankdue on May 26, 2025 (Note 2)
Total

For the period
from March 1, 2014
to August 31, 2014

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

Net assets per unit

¥99,204

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

Net income per unit

¥2,450¥2,919¥13,000,000

0.64250%¥13,000,000

0.64250%

1,000,000

0.32636%––

12,200,000

0.86250%

12,200,000

0.86250%

4,000,000

0.72500%

4,000,000

0.72500%

9,000,000

1.11750%

9,000,000

1.11750%

1,000,000

1.04875%

1,000,000

1.04875%

4,000,000

0.72650%––

10,000,000

1.33750%

10,000,000

1.33750%

800,000

1.25875%

800,000

1.25875%

8,000,000

1.56250%

8,000,000

1.56250%

1,000,000

1.46375%

1,000,000

1.46375%

2,000,000

1.30289%2,000,000

1.30289%2,000,000

1.11662%––5,500,000

1.25900%––

2,000,000

1.89500%

2,000,000

1.89500%

2,000,000

1.86500%

2,000,000

1.86500%

1,000,000

1.83875%

11. INCOME TAXES

1,000,000

1.83875%

903,700

2.21812%925,100

2.21812%903,700

2.17000%

925,100

2.17000%

The Company, as an investment corporation, is subject to corporate income taxes at a statutory tax rate of approximately 37% for
the fiscal periods ended August 31, 2014 and February 28, 2014. 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.

¥80,307,400¥67,850,200

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 months 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.

The 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.

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

Net income available to ordinary unitholders (Thousands of Yen)

¥4,079,991¥4,860,809

Average number of units during the period

1,665,260

1,665,260

10. RELATED PARTY TRANSACTIONS
For the periods from March 1, 2014 to August 31, 2014 and from September 1, 2013 to February 28, 2014
Parent Company and major corporate unitholders
Not applicable
Subsidiaries and affiliates
Not applicable
Fellow subsidiary companies
Not applicable
Directors and major individual unitholders
Not applicable

Since the Company distributed in excess of 90% of its distributable income in the form of cash distributions totaling ¥4,079,887
thousand and ¥4,860,893 thousand for the fiscal periods ended August 31, 2014 and February 28, 2014, 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 March 1, 2014
to August 31, 2014

Thousands of Yen

Long-term debt

1-2 years

2-3 years

3-4 years

4-5 years

85,60014,085,600

12,285,600

14,085,600

8. UNITHOLDERS’ EQUITY

For the period
For the period
from March 1, 2014
from September 1, 2013
to August 31, 2014
to February 28, 2014
¥4,079,991¥4,860,809

Statutory tax rate
Deductible cash distributions
Other
Effective tax rate

For the period
from September 1, 2013
to February 28, 201436.59%(36.57)0.01
0.03%

36.59%(36.58)0.01
0.02%

The 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

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29

Notes to Financial Statements
12. FINANCIAL INSTRUMENTS

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 the market interest rates within ashort-term period. (However, the fair value of certain floating-rate long-term debt that qualifies for the special treatment of interest-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.”

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 interestbearing debt, to secure stable financing capability and reduce future risks of rising interest rates, the Company’s investment
policy is to secure longer-term, fixed-rate borrowings with well-diversified maturities.

Note 3: Financial instruments for which fair value is difficult to determine
Thousands of Yen

Type of asset

The Company enters into derivative transactions only for the purpose of reducing risk of future interest rate fluctuations anddoes not engage in speculative transactions.
(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.
(3) Supplementary Explanation on Estimated Fair Value of Financial Instruments
The fair value of financial instruments is based on the quoted market price, if applicable. When there is no quoted market
price available, fair value is reasonably estimated. Certain assumptions are used for the estimation of fair value. Accordingly,
the result of such estimation may change if different assumptions are used. Furthermore, the contractual amounts ofderivative transactions stated in “17. Derivatives and Hedge Accounting” below do not represent the market risk involved inthese derivative transactions.

Fair Value of Financial Instruments
For the period from March 1, 2014 to August 31, 2014
The following table summarizes the carrying value and the estimated fair values of financial instruments as of August 31, 2014.

(i) Cash and bank deposits(iv) Long-term debt

Note 4: Redemption schedule for cash and bank deposits as of August 31, 2014
Thousands of Yen

Cash and bank deposits
Total

–

–

–

–

Redemption schedule for cash and bank deposits as of February 28, 2014
Thousands of Yen

Cash and bank deposits
Total

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

–

–

–

–

–

Note 5: Redemption schedule for debt as of August 31, 2014
Thousands of Yen

Due within
one year
Short-term debt

After one year, After two years, After three years, After four years,
After five years
within two years within three years within four years within five years
–
–
–
–
–
–

Long-term debt

¥85,600¥85,600¥14,085,600¥12,285,600¥14,085,600¥39,765,000

Total¥85,600¥85,600¥14,085,600¥12,285,600¥14,085,600¥39,765,000

Difference

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

Short-term debt

–

–

–

Long-term debt

85,600¥85,600¥13,085,600¥85,600¥16,285,600¥38,307,800(85,600)(86,597)

¥997

Total

¥16,585,600¥85,600¥13,085,600¥85,600¥16,285,600¥38,307,800(80,307,400)(82,146,818)

1,839,418–––(Note 1)

Fair value(Note 1)

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

Difference(i) Cash and bank deposits¥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–––

Note 1: The numbers in parentheses 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
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 is reported as the fair value.
(iii) Current portion of long-term debt and (iv) Long-term debt

Nomura Real Estate Master Fund––

Carrying value

30¥16,627,667

Thousands of Yen

Thousands of Yen(v) Derivative transactions

Due within
After one year, After two years, After three years, After four years,
After five years
one yearwithin two years within three years within four years within five years¥16,627,667
–
–
–
–
–

Redemption schedule for debt as of February 28, 2014

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.

(iv) Long-term debt–

¥16,627,667(v) Derivative transactions(iii) Current portion of long-term debt

¥487,473

Investment securities¥16,627,667(ii) Short-term debt(iii) Current portion of long-term debt

Fair value (Note 1)

As of February 28, 2014

*The fair value of the investment securities is not disclosed because there are no quoted market prices available for these securities and it is extremely difficult to determine the fair value.

Thousands of Yen

Carrying value (Note 1)

As of August 31, 2014

For the period
from March 1, 2014
to August 31, 2014

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

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¥239,044,902¥229,489,317(836,982)

9,555,585

238,207,920

239,044,902¥257,123,000¥252,818,000

Note 1: The carrying value represents the acquisition cost less accumulated depreciation.

Nomura Real Estate Master Fund

31

Notes to Financial Statements
Note 2: The major decrease in the carrying value during the period ended August 31, 2014 was mainly due to depreciation (total 1,535,675 thousand yen). 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 thousand yen).
Note 3: The fair value as of August 31, 2014 and February 28, 2014 represents the sum of the appraisal values estimated by external real estate appraisers.

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

14. SEGMENT INFORMATION

16. LEASESThe future minimum rental revenues from tenants under non-cancelable operating lease of properties as of August 31, 2014 andFebruary 28, 2014 are summarized as follows:
Thousands of Yen

Due within one year

As of August 31, 2014¥12,763,044

As of February 28, 2014
¥13,530,103

Due after one year

41,764,249

44,418,969¥54,527,293¥57,949,072

Total

For the periods from March 1, 2014 to August 31, 2014 and from September 1, 2013 to February 28, 2014
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
1. Information about products and services
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.

17. DERIVATIVES AND HEDGE ACCOUNTING
Derivative transactions as of August 31, 2014
(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

Hedge accounting
method

2. Information about geographical areas(1) Revenues
Since more than 90 percent of the total operating revenues were generated from external customers in Japan,
geographical breakdown 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.

Type of derivative
instruments

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

Real estate rental revenues and expenses for the fiscal period ended August 31, 2014 and February 28, 2014 consist of the following:Thousands of Yen

Rental revenues

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

8,663,943

8,478,426

8,428,400

8,228,547

235,543

249,879

800,373

697,965

Parking revenues

73,75078,087

Incidental income

631,826

578,563

Other miscellaneous revenues

94,79741,3153,872,940

2,918,849

Real estate rental expenses
Property management costs

355,167

337,141

Property management fees

213,770

152,886

Property and other taxes

731,211–

Utility expenses

596,791

518,251

Casualty insurance

18,435

18,117

Repairs and maintenance

216,187

185,677

Land rents

71,96371,657

1,535,761

1,497,862

Depreciation
Other rental expenses
Real estate rental profits32

For the period
from March 1, 2014
to August 31, 2014
¥9,464,316

Other rental revenues

Common area charges

Nomura Real Estate Master Fund

68,646,500

68,603,700

Fair
value

Method used for
determining fair
value

(*)

Derivative transactions as of February 28, 2014
(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

15. BREAKDOWN OF REAL ESTATE RENTAL REVENUES AND EXPENSES

Rental revenues

Due after
one year*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 fairvalue 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”).

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.

Real estate rental revenues

Notional amount

133,655

137,258¥5,591,376¥6,257,542

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

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

Board of Directors' Meeting
Asset Management Company
Nomura Real Estate Asset Management Co., Ltd.

Information Provision
Agreement

AssetManagement
Agreement

Executive Director

Satoshi Yanagita

Supervisory Director

Sadahiko Yoshimura

Supervisory Director

Shuhei YoshidaTransfer Agency Agreement andGeneral Administration Agreement
General Administrator (Financial Agent)
The Bank of Tokyo-Mitsubishi UFJ, Ltd.

AuditorErnst & Young Shin Nihon LLC

Information Provider
Nomura Real Estate Development Co., Ltd.

Financial agency agreement

IR Calendar
Announcement of financial results(mid-April)

January

March

February

Fiscal period end(end of February)

April

Announcement of financial results(mid-October)

June

May

July

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

Breakdown of Unitholders

SeptemberAugustFiscal period end(end of August)October

Foreign corporations and individuals

361,466 units
21.7%

177,306 units
10.6%

Other domestic corporations

151,431 units
9.1%

712,813 units
42.8%

Financial institutions(including financial instruments
business operators)

852,245 units
51.2%

Top 10 Unitholders

2nd
Fiscal Period

Individuals and others

300,118 units
18.0%
3rd
Fiscal Period

Units heldShare

1 Japan Trustee Services Bank, Ltd.

307,931 18.49%

2 The Master Trust Bank of Japan, Ltd.

171,633 10.31%

3 Trust & Custody Services Bank, Ltd.

125,892

7.56%

4 Nomura Real Estate Development Co., Ltd.

87,8205.27%

5 The Nomura Trust and Banking Co., Ltd.

72,928

4.38%

6 Nomura Bank Luxembourg SA

44,347

2.66%

23,474

1.41%

8 State Street Bank and Trust Company

19,545

1.17%

9 The Bank of New York, Non-Treaty JASDEC Account18,082

1.09%

10 Mitsubishi UFJ Morgan Stanley Securities Co., Ltd.

17,2941.04%

7446,603 units
26.8%

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

Unitholder
328,538 units
19.7%

November

Nomura PB Nominees Limited Omnibus-Margin(Cash PB)

Total

888,946 53.38%

Note: The figures are based on data as of August 31, 2014.

34

Nomura Real Estate Master Fund

Nomura Real Estate Master Fund35