NEWS RELEASE
Dec 20, 2017

R&I Affirms A+, Stable: Nomura Real Estate Master Fund, Inc.
Rating and Investment Information, Inc. (R&I) has announced the following:
ISSUER:

Nomura Real Estate Master Fund, Inc.
Issuer Rating: A+, Affirmed
Rating Outlook: Stable

RATIONALE:
Nomura Real Estate Master Fund, Inc. (NMF) is Japan's largest diversified REIT that was establishedin October 2015 through the merger of three REITs operated by the Nomura Real Estate group. With afocus on the Greater Tokyo area, NMF invests in various types of properties in a well-balanced manner.
Nomura Real Estate Holdings, Inc. serves as a sponsor.
NMF has worked to improve the quality of its portfolio through strategic asset replacement. Over thepast two years, it has sold assets of approximately 99.5 billion yen, mainly properties that were aging,while continuously acquiring relatively new properties developed by the sponsor, in efforts to rejuvenate
the portfolio.
NMF boasts an asset size of 927.2 billion yen, which is among the largest in the J-REIT industry. The
breakdown by geographic location and property type shows that properties in the Greater Tokyo area
account for 82% of the portfolio, and that office buildings 46%, residential properties 20%, retail properties
17% and logistics properties 16%, respectively. The fact that the top ten properties represent only 25% of
the portfolio suggests the high diversification of its portfolio.
With the real estate transaction market overheating, it has become increasingly difficult to acquire
quality properties from external sources at appropriate prices. Given that the sponsor's stock of properties
has grown at a fast pace, however, NMF will likely be able to continue acquiring properties steadily.
NMF's property management is sound. While the occupancy rate of office buildings is in the 99%
range, office rents continues to increase. Rents for residential properties are also on a modest upward
trend. Logistics and retail properties generate steady earnings under long-term leasing contracts withtenants.
The LTV ratio (calculated after excluding goodwill from total assets) as of August 2017 was 48.9%.
Unrealized gains are expanding, as evidenced by the appraisal value exceeding the book value by 8.6%
as of the same period end.
NMF enjoys favorable funding conditions. With stable funding sources consisting primarily of majordomestic financial institutions, the average remaining term to maturity of debts is as long as 4.5 years anddue dates are staggered. Given an available committed line of credit totaling 50 billion yen, together withcash and deposits, it ensures sufficient liquidity.
The Rating Outlook is Stable. Its efforts to improve portfolio quality through asset replacement paid off
to some extent. NMF has decided to shift to the growth phase going forward. R&I will pay attention to theREIT's external growth through collaboration with the sponsor and its leverage control in the growthprocess.
The primary rating methodology applied to this rating is provided at "Rating Methodology for J-REIT".
The methodology is available at the web site listed below, together with other rating methodologies thatare taken into consideration when assigning the rating.
https://www.r-i.co.jp/en/rating/about/rating_method.html■Contact: Sales and Marketing Division, Customer Service Dept.
■Media Contact : Corporate Planning Division (Public Relations)Rating and Investment Information, Inc.

TEL.+81-(0)3-6273-7471 E-mail. infodept@r-i.co.jp
TEL.+81-(0)3-6273-7273

TERRACE SQUARE, 3-22 Kanda Nishikicho, Chiyoda-ku, Tokyo 101-0054, Japan https://www.r-i.co.jp

Credit ratings are R&I's opinions on an issuer's general capacity to fulfill its financial obligations and the certainty of the fulfillment of its individual obligations as promised (creditworthiness) and are notstatements of fact. Further, R&I does not state its opinions about any risks other than credit risk, give advice regarding investment decisions or financial matters, or endorse the merits of any investment.
R&I does not undertake any independent verification of the accuracy or other aspects of the related information when issuing a credit rating and makes no related representations or warranties. R&I is notliable in any way for any damage arising in relation to credit ratings (including amendment or withdrawal thereof). As a general rule, R&I issues a credit rating for a fee paid by the issuer. For details,
please refer to https://www.r-i.co.jp/en/docs/policy/site.html.
© Rating and Investment Information, Inc.

NEWS RELEASE
R&I RATINGS:ISSUER:RATING:

Nomura Real Estate Master Fund, Inc. (Sec. Code: 3462)
Issuer Rating
A+, Affirmed

RATING OUTLOOK:

StableUnsec. Str. Bonds No.2

Issue Date

Maturity Date

Issue Amount (mn)

Mar 16, 2005

Mar 16, 2020

JPY 5,000

RATING:

A+, Affirmed

Unsec. Str. Bonds No.7

Issue Date

Maturity Date

Issue Amount (mn)

Mar 19, 2007

Mar 17, 2028

JPY 4,500

RATING:

A+, Affirmed

Unsec. Str. Bonds No.10

Issue Date

Maturity DateIssue Amount (mn)Nov 25, 2014

Nov 25, 2024

JPY 6,000

RATING:A+, Affirmed■Contact: Sales and Marketing Division, Customer Service Dept.
■Media Contact : Corporate Planning Division (Public Relations)Rating and Investment Information, Inc.

TEL.+81-(0)3-6273-7471 E-mail. infodept@r-i.co.jp
TEL.+81-(0)3-6273-7273

TERRACE SQUARE, 3-22 Kanda Nishikicho, Chiyoda-ku, Tokyo 101-0054, Japan https://www.r-i.co.jp

Credit ratings are R&I's opinions on an issuer's general capacity to fulfill its financial obligations and the certainty of the fulfillment of its individual obligations as promised (creditworthiness) and are notstatements of fact. Further, R&I does not state its opinions about any risks other than credit risk, give advice regarding investment decisions or financial matters, or endorse the merits of any investment.
R&I does not undertake any independent verification of the accuracy or other aspects of the related information when issuing a credit rating and makes no related representations or warranties. R&I is notliable in any way for any damage arising in relation to credit ratings (including amendment or withdrawal thereof). As a general rule, R&I issues a credit rating for a fee paid by the issuer. For details,
please refer to https://www.r-i.co.jp/en/docs/policy/site.html.
© Rating and Investment Information, Inc.