[For Translation Purposes Only]
January 27, 2017

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:
Ken Okada
Director and Managing Executive Officer
TEL. +81-3-3365-8767 nmf3462@nomura-re.co.jp

Notice Concerning Property Acquisition
Nomura Real Estate Master Fund, Inc. (“Nomura Master Fund” or the “Fund”) announced thedecision made today by Nomura Real Estate Asset management Co., Ltd., a licensed investment trust
management company retained by the Fund to provide asset management services, that it will acquire
asset (the “Acquisition”), as described below.

1．Summary of Asset scheduled to be Acquired
Property name

Use

Date ofagreement

PRIME URBAN
Gakugei Daigaku Parkfront（Note 2）

Residential

January 27,
2017(Scheduled)
Date ofacquisition
March 31,2017

Seller(Scheduled)
Acquisition price(¥million)(Note 1)

Undisclosed(Note 3)

1,300

(Note 1)The amount excluding acquisition related costs, property tax, city planning tax, consumption tax and local
consumption tax is stated.
(Note 2)Although the current property name is “Glenpark Megurohoncho” the Fund plans to change the name to the one
stated above at the earliest opportunity, after the acquisition.
(Note 3)Undiscoled, since concent have not obetained from the seller.
(Note 4)The asset to be acquired is real estate.
(Note 5)This property is scheduled to acquire using cash on hand and borrowing.

2．Reason for the Acquisition
In accordance with the Medium to Long-term Management Strategy it announced in November
2015, Nomura Master Fund designated the next three years as its Quality Phase and has been
implementing various related measures.
One key measure is Strategic Property Replacement (SPR), which is aimed at improving the qualityof our portfolio. As part of this measure, the Fund decided to acquire the Property at this time.
The Fund evaluated the points below concerning the acquisition of the Property.
1•The Property is a 13-minute walk from Gakugei Daigaku Station on the Tokyu Toyoko Line. A
bus stop that is a one-minute walk away from the Property provides access to Meguro Station on
the JR Yamanote Line, providing easy access to major business and commercial areas like Shibuya,
Shinjuku, Shinagawa and Tokyo.

•

There are supermarkets and convenience stores in the immediate neighborhood of theProperty, making the area very easy to live in. It boasts a pleasant residential environment
characterized by tranquil neighborhoods and is bordered by a park on the south side. In fact, allof the Property’s units face south, overlooking the park. This is a rare advantage in the area andexpectations are accordingly high for stable demand from single workers who commute to thecity center.

3．Property Summary of Asset
Property Name
Type of AssetRegistry
Location(Note 1)StreetAccessCompletion Date(Note 1)
Use(Note 1)
Structure(Note 1)
Leasable Units
Architect
Structural Strength Calculator
Constructor
Building Inspection Agency
Land
Area(Note 1)
Floor Area
Land
Type ofOwnership
Building
Building Coverage Ratio
Floor Area Ratio
Collateral
Property Management
Company（Note 3）
Master leasing company（Note 4）
Type of master leasing（Note 4）
Seismic Risk (PML)(Note 5)

Notes

Acquisition Price(Scheduled)
Appraisal Value and Method
Appraisal NOI（Note 6）

PRIME URBAN Gakugei Daigaku Parkfront
Real Estate
2-13-4 Meguro-honcho, Meguro Ward, Tokyo
2-12-20 Meguro-honcho, Meguro Ward, Tokyo
13-minutes walk from Gakugei-Daigaku Station on Tokyu Toyoko Line
14-minutes by bus (Tokyu bus) from JR Meguro Station, and 1-minute walk fromnearest Bus stop
February 29, 2008
Apartment
RC, 6F
49 units
DUES Architect Office
S.U. Architect Office
WAKACHIKU CONSTRUCTION CO., LTD.
CENTER OF INTERNATIONAL ARCITECTUAL STANDARD
750.39 ㎡
1,541.81 ㎡
Ownership
Ownership
70.0％ (Note 2)
200.0％
None
Nomura Real Estate Partners Co., Ltd.
Nomura Real Estate Partners Co., Ltd.
Pass through
8.51％（SOMPO RISK MANAGEMENT & HEALTH CARE Inc.’s Earthquake PMLAppraisal Report as of December 2016）
・The property management and master leasing company, Nomura Real Estate Partners
Co., Ltd., is considered a Related Party under the Law Concerning Investment Trust andInvestment Corporation (“Investment Trust Law”).
・On November 28, 2008, subsequent to the acquisition of the building permit for theProperty, the site of the Property was subject to height redistricting with the absoluteheight limit set at 17 meters. As a result, the building is designated as a pre-existing
non-conforming building.
¥1,300 million¥1,310 million（Based on the capitalization approach as of December 1, 2016）（Appraiser: Daiwa Real Estate Appraisal Co., Ltd.）¥57million

2Leasing Status (As of January 27, 2017) （Note 7）
Total Number of Tenants
1
Total Rental Income¥70 million
Security Deposits¥5 million
Occupancy Rate
100.0％
Total Leased Floor Space
1,446.90 ㎡
Total Leasable Floor Space
1,446.90 ㎡
August,August,Occupancy Rates in the Past
2012
2013
（Note 8）-August,2014-

August,2015-

August,2016
100.0％(Note 1) Location and other Items
Location (registry), Completion Date, Use, Structure, and Area are based on the information in the real estateregistry.
(Note 2) Building Coverage
As the property is located in a Category1 medium-to-high-rise exclusive residential district, the Building
Coverage is originally supposed to be 60%, however, the Building Coverage has been increased to 70%, as
the property is in a fire prevention zone and certified fireproof.
(Note 3) Property Management Company
Refers to the Property Management Company that is scheduled to be appointed.
(Note 4) The Fund, simultaneously with the acquisition of the Property, a master lease agreement, under which thebuilding of the Property will be collectively leased for the purpose of subleasing, with Nomura Real Estate
Partners Co., Ltd. The master lease agreement is “pass-through scheme” where Nomura Real Estate Partners
Co., Ltd., the master lease company, pays the same amount as the total sum of the rent based on the leaseagreement which the master lease company has concluded with each end tenant to the Fund. The items in
the above chart are indicated based on the following assumptions.
(Note 5) PML shows the probable losses caused by a major earthquake, as a percentage of the expected recovery costto the replacement cost. PML is calculated based on the statistical assumption that within next 475 years
there is a 0.211% annual chance (10% probability of once every 50 years, i.e., average life time of buildings)
of major earthquake occurring.
(Note 6) Appraisal NOI“Appraisal NOI” indicates the annual NOI (operating income-operating expenses) described in the real estateappraisal report with December 1, 2016 as the appraisal date.
(Note 7) Leasing Status“Total Number of Tenants” is listed as one because, as stated above, at the time of the Property’s acquisition
the Fund entered into a master lease agreement, under which the building of the Property will be collectively
leased for the purpose of subleasing. The master lease company plans to sublease the Property’s units to end
tenants.
“Total Rent Income” is the amount obtained by multiplying the monthly rent stated the lease agreement withend tenants actually leasing the building of the Property as of today by 12 (rounded down to the nearest
million yen).
“Security Deposits” indicates the amount of security deposits, etc. stated in the aforementioned leaseagreement (rounded down the nearest million yen).
“Total Leased Floor Space” indicates the floor space that is being leased to end tenants as of today.
(Note 8) Occupancy Rates in the Past
Regarding the occupancy rates before the end of August 2015, the figures are not stated, as the information
has not been received from the seller.

4．Seller Profile
As the Fund has not obtained an agreement with the Seller, who is Japanese General Operating
Company and Japanese Individuals, this information is not disclosed. There is no capital involvement,
personnel involvement or transaction involvement between the Seller and the Fund or asset
management company as of today. The Seller is not Related Parties under the Investment Trust Lawof the asset management company.

5．Status of Owners

None. The current owner of the property is aJapanese General Operating Company and JapaneseIndividuals, and there is no special relation between the said company and the Fund or asset
management company.
3

6．Broker Profile
Company Name

Nomura Real Estate Urban Net Co., Ltd.

Head Office

1-26-2, Nishi-Shinjuku, Shinjuku-ku, Tokyo

Representative

Kenichi Maeda, President

Principal Business

Real Estate Business

Capital¥1,000 million (as of March, 2016)

Established

November 6, 2000

Relationship with the Fund and/or asset management company
CapitalPersonnel

Transaction
Status ofRelated Parties
Commission

Nomura Real Estate Urban Net Co., Ltd. is an affiliated company of Nomura Real Estate
Holdings, Inc., which has 100% ownership of Nomura Real Estate Asset Management
Co., Ltd., the Fund’s asset management company, and therefore, is a Related Party underthe Investment Trust Law.
There is no personnel involvement between the said company and the Fund or asset
management company. There is also no personnel involvement between related parties ofthe said company and related parties of the Fund or asset management company.
There is no transaction between the said company and the Fund or asset managementcompany. There is also no transaction between related parties of the said company andrelated parties of the Fund or asset management company.
The said company is not considered a directly associating party of the Fund. However, as
stated above, the said company is a Related Party of the Asset Management Company as it
is a fellow subsidiary.
¥39 million (excluding consumption taxes and local consumption taxes)

7．Transaction with Related Parties（1）The property management company and master leasing company
The property management company and master leasing company of the Property, Nomura Real
Estate Partners Co., Ltd., is a Related Party under the Investment Trust Law, as stated above.
Accordingly, the fees and other terms of the consignment of property management as well as the lease
period, rental rate, and other leasing terms related to the Property have been duly examined andauthorized by the Asset Management Company’s Compliance Committee and Investment Committee
pursuant to its Investment Committee Rules, Rules of Compliance, Compliance Manual, Rules
Concerning Transactions with Related Parties, and other relevant rules and guidelines.
（2）Broker
The brokerage of the transaction is a Related Party under the Investment Trust Act. Therefore, theAsset Management Company determined the transfer and the terms and conditions of the transaction,
including the commission and the other conditions to the restrictions and formalities concerning thetransactions with related parties as set forth in the Investment Trust Act and the Asset Management
Company’s bylaws and duly authorized by the Asset Management Company’s Compliance Committee
and Investment Committee pursuant to its Investment Committee Rules, Rules of Compliance,
Compliance Manual, Rules Concerning Transactions with Related Parties, and other relevant rules andguidelines.

48. Form of Payment, etc.
（1）Form of Payment
With respect to the purchase price of the Asset, Nomura Master Fund plans to make a package
payment to the Seller of the purchase price through cash on hand and borrowing on the scheduled
date of the acquisition.
（2）Impact on the New Investment Corporation’s Financial Status in Case of Failure of the Forward
Commitment
The agreement on purchase and sale of real estate concerning the Asset to be Acquired and theagreement on purchase and sale of real estate (collectively, the “Agreement”) falls into the Forward
Commitment, etc., (Note) as set forth in the Comprehensive Guideline for Supervision of Financial
Instruments Business Operators set by the Financial Services Agency. Scheduled details of thecancellation clauses are as follows. The Agreement carries suspensive conditional clauses stating thatthe transaction be executed only when procurement of required funds through borrowings by thebuyer is reasonably expected. Please refer to “Suspensive conditional clauses” below for suspensive
conditional clauses for the Agreement
1) In case there are any significant violations concerning the provisions of the agreement onpurchase and sale of the Asset to be Acquired by the seller or the purchaser (the party
hereto, the “defaulting party”), the other party can urge the defaulting party to fulfill theobligation fixing a period of time. When the defaulting party does not correct theviolations within that time limit, the other party may cancel the agreement on purchaseand sale of the Asset to be Acquired.
2) In case of the cancellation of the Agreement, the other party may make a claim for the
penalty equivalent to 20% of the sales price to the defaulting party.
3) The amount paid as penalty stipulated in note 2 above will be considered compensation
for damages, and, even in the event that damages are incurred in excess of an amountequivalent to 20% of the sales price, the contracting parties cannot seek compensation forthe portion of damages exceeding the amount.
(Note) The forward commitment, etc., refers to postdated sale agreements where the conclusion and deliveryof the property is scheduled over one month ahead of the contract date, and other similar agreements.

9．Schedule for Acuisition
January 27, 2017
March 31, 2017Conclusion of agreement on purchase and sale for the acquisition of
the Assets.
Delivery of real estate of the Asset.

10．Forecasts of Financial Results
There is only small impact to Nomura Master Fund’s forecasts of financial results for the fiscal
period ending February 28, 2017 (September 1, 2016 to February 28, 2017), there is no revision
to the forecast of financial results.

5

11．Appraisal Summary
PRIME URBAN Gakugei Daigaku Parkfront

Property Name
Appraisal Value￥1,310,000,000

Appraiser

Daiwa Real Estate Appraisal Co., Ltd.

Appraisal Date

December 1, 2016
(Yen)
Amount orpercentage

Item
Capitalization approach price

1,310,000,000

Price calculated by the direct capitalization
approach(1) Operating income (a)-(b)1,330,000,000

In calculating, both the discounted cash flow approachand the direct capitalization approach are taken into
account.
Calculated by capitalization rate based on a net revenueof the stable mid-to-long term.

69,354,099(a) Gross rental income

73,218,723(b) Losses due to vacancies, etc.

3,864,624(2) Operating expenses

Assumed based on the expected mid- to long-term stable
rent.
Assumed based on the expected mid- to long-term stable
occupancy rate.

12,042,942

Maintenance1,419,600

Utilities costs

629,928

Repair costs

882,260

Property management fees

2,042,240

Advertisement for leasing, etc.
2,834,494
Taxes

3,465,700

Insurance premium

94,650

Other expenses(3) Net operating income from leasing
business (NOI=(1)-(2))(4) Profit through management of
temporary deposits, etc.

674,070

Assumed based on the estimated amount and of asimilar building.
Assumed based on past actual expences takinginto
account the occupancy rate.
Allocation of appraised restoration expenses and repair
expenses based on the Engineering Report.
Assumed based on agreement conditions, generalstandard, etc.
Assumed based on the agreement conditions, taking into
account the standard tenant recruit expenses of similarbuildings, and applying the estimated turnover ratio of
unit.
Assumed based on mid to long term perspective of thetax base of year 2016.
Allocation, taking into account the actual amount,insurance premium rates of similar buildings, etc.
Assumed based on past actual other expences.

57,311,157
55,490(5) Capital Expenditure Reserve

1,714,167(6) Net Cash Flow (NCF = (3)+(4)-(5))

55,652,480(7) Capitalization rate

4.2％

Price calculated by the Discounted Cash Flow
Approach
Discount rate

Assumed interest rates of 1.0%.
Assumed in consideration of building age, as well as
average maintenance and lease renewal fees based on theengineering report.
Assumed based on conditions of the location, thebuilding, and the contract of the Property.

1,300,000,000
4.0％

Terminal capitalization rate
4.4％

Cost Approach Price

1,250,000,000

Ratio of land

79.2％

Ratio of building

20.8％

Matters noted in reconciliationof indicated value anddetermination of appraisal value

Grounds

Assumed based on the yield on investment of similarbuildings and the characteristics of the Property.
Assumed based on the yield on investment of similarbuildings, the future movement of the yield on
investment, risks of the Property as a preferredinvestment, general forecasts of economic growth rate,
and price trends of real estate and rents.

The property is a 13-minute walk from Gakugei Daigaku Station on the Tokyu Toyoko Line. It
is located in a relatively attractive residential area with a pleasant atmosphere. The building isgeared mainly toward single residents and small families and is competitive with rental
condominiums of similar size in terms of quality, available facilities and other aspects. The
appraisal value was determined taking the above factors into consideration.

6

【Exhibits】
Exhibit 1

Portfolio Over View after Acquisition

Exhibit 2

Photos of the Asset

Exhibit 3

Maps of the Asset*<Nomura Real Estate Master Fund, Inc> URL: http://www.nre-mf.co.jp/en/

7

Exhibit 1
Portfolio Overview after Acquisition of the AssetArea (Note 1)

Acquisition Price(mln)

Percentage tototal (%)
(Note 2)

Tokyo Area

371,944

40.0

Other Area

71,9307.7

Total

443,874

47.8

Tokyo Area

104,877

11.3

Other Area

45,896

4.9

Total

150,773

16.2

Tokyo Area

137,030

14.8

Other Area

10,0401.1

Total

147,070

15.8

Tokyo Area

149,623

16.1

Other Area

32,527

3.5

Total

182,150

19.6

Tokyo Area

4,900

0.5

0

0

928,767

100.0(Scheduled)

Asset Type

OfficeRetailLogistics

Residential

OthersGrand Total

Total
-

(Note 1)“Greater Tokyo” refers to Tokyo Prefecture, Kanagawa Prefecture, Chiba Prefecture andSaitama Prefecture. “Other Areas” refers to cabinet-order designated cities, prefectural
capitals, and cities having a population of at least 100,000 and their peripheral areas,
excluding Greater Tokyo.
(Note 2)“Tokyo Area”Areater Tokyo” refers to Tokyo Prefecture, Kanagawa Prefecture, Chiba
Prefecture and Saitama Prefecture. “Other Areas” refers to cabinet-order designated cities,
prefecturs the figures were rounded to the first decimal place, the total may not necessarilybe 100%.
(Note 3)Figures in the table above reflect the assumption that the dispositio n of NOF
Technoport Kamata Center Building and Ito-Yokado Higashi-Narashino Store, which
was announced in the December 20, 2016, press release entitled “Notice Concerning
Property Disposition,” has been completed.

8

Exhibit 2

The Asset

View of Shimizuike Park bordered on the south side9

Exhibit 310