12th Fiscal Period
Semi-Annual Report
March 1, 2021 to August 31, 2021
Securities Code: 3462

Nomura Real Estate Master Fund, Inc.
8-5-1 Nishi-Shinjuku, Shinjuku Ward, Tokyo
https://www.nre-mf.co.jp/en/

Of fice

Re si d e n t i al

Driving theMarket as
One of Japan’s
Largest REITs

Re t ai l

CONTENTS
Message from the Management

P.03

To Our Unitholders / Performance Highlights

Management Strategy

L o g i st i c s

P.05

Track Record of Growth since Incorporation / External Growth / Internal Growth

ESG Measures

P.15

ESG Measures

Financing Status

P.17

Financing Status / Financial Statement Highlights / Market Review

Portfolio

P.21

Portfolio Analysis / Portfolio Gallery

Investor Information

P.27

Distribution Policy / Structure and Organization / Investor Information

Financial Section
Balance Sheet
Statement of Income and Retained Earnings
Statement of Changes in Net Assets
Statement of Cash Flows
Notes to Financial Statements
Independent Auditor’s Report

P.31

Message from the Management

Management Strategy

ESG Measures

Financing Status

Portfolio

Investor Information

Financial Section

Message from the Management
PERFORMANCE HIGHLIGHTS

NMF will strive to increase unitholder value by securing stable income over the
medium to long term and ensuring the steady growth of assets under management.

12th Fiscal Period

13th Fiscal Period

14th Fiscal Period(forecast)*(forecast)*¥3,288¥3,227¥3,242

Operating Revenues¥37,519 million¥37,466 million¥37,833 million

Operating Expenses¥22,777 million¥22,653 million¥22,972 million

Net Income¥12,434 million¥12,595 million¥12,666 million

Cash Distribution
per Unit(including distribution inexcess of earnings)

Nomura Real Estate Master Fund, Inc.
Executive
Director

Shuhei Yoshida(From left)

Supervisory
Director

Koichi Owada
Mineo Uchiyama
Supervisory
Mika Okada (Note)
Director
Supervisory
Director(Note) Mika Okada is her maiden name and the name she uses professionally. The name recorded on her family register is Mika Furusawa.

To Our Unitholders
First, we would like to express our deepest condolences tothose who have lost their lives due to COVID-19 and theirfamilies, as well as our sympathies to those fighting thedisease.
In reaching the end of our 12th fiscal period, we would also
like to extend our sincere gratitude to all unitholders for yourcontinued support for Nomura Real Estate Master Fund, Inc.
During the 12th fiscal period, we decided to acquire Landport
Ome III (¥17 billion) following Landport Ome II which we
acquired in the previous fiscal period. In addition, we haveconsidered selling and replacing properties with concerns
over the future including regional properties and aged properties up to now, and recently decided to sell NMF Utsunomiya
Building alongside the property acquisition.
As a result of the property replacement this time, not only
just profitability but also the ratio of the logistics sector,
which is expected to generate stable earnings even amid the
COVID-19 crisis, will increase. Furthermore, the portfolio
quality will improve from various perspectives such as theratio of the Greater Tokyo area, building age and environmental performance.
In the fiscal period under review, while retail facilities, etc. arerepeatedly requested to shorten operating hours with thedeclaration of a state of emergency and implementation ofsemi-emergency COVID-19 measures due to the prolonged
COVID-19 pandemic, we continued to offer rent reduction/
exemption and other forms of relief to support some of ourretail tenants. Nevertheless, the impact of this on overall
portfolio revenue was limited.
Furthermore, in the office and rental apartment sectors,
changes in the market, such as rising vacancy rates anddeclining advertised rents, were also continuously observed.

3

Nomura Real Estate Master Fund, Inc.

The properties held by NMF were also affected by increase in
the area of contract terminations and such. However, throughappropriate and flexible leasing activities based on market
trends, as well as rent increases upon tenant change andupward rent revisions upon contract renewal, we continued
to practice management with an aim to secure stablerevenue.
As a result, at the end of the 12th fiscal period, our portfolio
consisted of 299 properties with a total acquisition price of¥1,068.4 billion. Operating revenues totaled ¥37,519 million,
operating profit reached ¥14,741 million, and net income
came to ¥12,434 million. As for rent reduction/exemption andother factors that led to temporary decrease in revenue due
to COVID-19, partial reversal of internal reserves was made in
the amount of ¥447 million for the purpose of leveling theamount of distribution and maintaining forecast distribution
amount. Accordingly, cash distribution per unit for the 12th
fiscal period came to ¥3,288, the same as the initial forecast.
In addition, in the area of ESG (environmental, social andgovernance) activities, which we have been promoting forsome time, we continued to promote ESG initiatives, such as
initiatives in the environmental field aiming for energy saving
and initiatives in the social field including the survey ontenant satisfaction, in the fiscal period under review towards
the achievement of materiality (material issues) and KPItargets formulated to realize sustainable growth of NMF. We
will continue to proactively promote ESG initiatives as thefront runner in the J-REIT industry.
With a careful eye on the impact of COVID-19, we remainstrongly committed to enhancing fund performance andmanaging the fund’s assets in an aim to live up to the expectations and trust of our unitholders. We ask for your continued support and encouragement.

Total Assets¥1,192,507 million ¥1,190,911 million ¥1,190,176 million*The above forecast distribution is calculated based on certain assumptions as disclosed in “SUMMARY OF FINANCIAL RESULTS (REIT) For the 12th Fiscal Period
Ended August 31, 2021,” published October 13, 2021. As such, the actual distribution may differ from this forecast due to future property acquisitions or sales, changes
in the real estate market, tenant changes or other changes in the circumstances surrounding NMF. The distribution forecast is not a guarantee of distributions.

Operating Revenues and Net Income(Millions of yen)

Operating Revenues

Net Income

Cash Distribution per Unit
(Yen)
3,500

40,000

3,279
3,209

3,317 3,330

3,288

3,227 3,242

3,128

30,0003,000

20,0002,500
10,0000

0

7th FP 8th FP 9th FP 10th FP 11th FP 12th FP 13th FP 14th FP(Forecast) (Forecast)

7th FP 8th FP 9th FP 10th FP 11th FP 12th FP 13th FP 14th FP(Forecast) (Forecast)

Nomura Real Estate Master Fund, Inc.

4

Message from the Management

Management Strategy

ESG Measures

Financing Status

Portfolio

Investor Information

Financial Section

Track Record of Growth since Incorporation
Improved portfolio quality through strategic property replacement supported by the Sponsor and achieved 		

steady increase in distributions.

Incorporation

Aug. 2021 FP

After asset
replacement (Note 2)

299

299

Number ofproperties

257

Ratio oftop 10 properties

26.8%

22.2%

22.1%

Ratio ofGreater Tokyo area

79.8%

82.8%

83.2%

Averagebuilding age

19.3 years

DPU (Note 1)¥2,656(Billions of yen)

Asset Size

Acquisition of high-quality properties

Disposition of less competitive properties

due to building age, etc.

1,066.2 1,068.4
1,051.6
1,031.0

Accumulated Disposition Price

932.8

927.3

922.5

955.9

10 properties ¥33.4 bln

784.6
Absorption type merger
with TOP REIT, Inc.

19 properties ¥137.4 bln

NEC Head
Office Bldg.

400

9.0

０

220.9

GEMS
Shinbashi

GEMS Namba

PMO
Akihabara Kita

PROUD FLAT
Shibuya
Tomigaya

237.4

270.8

330.9

350.6

371.3

385.9

388.0

405.0

279.9

Accumulated
Acquisition Price

77 properties¥405.0 bln
Accumulated
Disposition Price

Aug. 2016 FP

37 properties¥113.1 bln

-34.1
-81.5

Feb. 2016 FP

9 properties ¥40.4 bln

33.6
-34.1

Incorporation(Oct. 2015)

12 properties ¥57.4 bln

Serenite
Summit Store
Honamanuma Shinsaibashi Grande
PROUD FLAT Sangenjaya II

200

The 3rd PO

Hotel Vista
Sapporo Odori

Harumi Triton
Y&Z

181.9

The 2nd PO

PMO Tamachi
HigashiPMO Nihonbashi
Mitsukoshi-mae

600

1,083.1

960.3

The 1st PO

792.6

19.8 years(25.6 years without SPR) (Note 3)(+23.8%)1,011.2

783.6

19.8 years¥3,288

Accumulated Acquisition Price

1,000

800

mainly developed by the Sponsor

Feb. 2017 FP

Aug. 2017 FP-105.0-105.0-110.3-110.3-110.3-110.3-110.4-110.4-113.1Feb. 2018 FP

Aug. 2018 FP

Feb. 2019 FP

Aug. 2019 FP

Feb. 2020 FP

Aug. 2020 FP

Feb. 2021 FP

Aug. 2021 FP

After asset
replacement(Note 1) Distributions for February 2016 FP are calculated on a six-month basis for 152 operating days. (Note 2) As of January 6, 2022.
(Note3) It is an average building age without taking into account the effect of property acquisition and disposition from the original portfolio at incorporation until January 6, 2022.

5

Nomura Real Estate Master Fund, Inc.

Nomura Real Estate Master Fund, Inc.

6

Message from the Management

Management Strategy

ESG Measures

Financing Status

Portfolio

Investor Information

Financial Section

External Growth
Conducted asset replacement between a local office building and a relatively recently
built logistics facility in the Greater Tokyo area that was developed by sponsors.

External Growth Policy
Continued selective investment with a focus on sponsor-developed properties and aimed for distribution growth and improved
portfolio quality through appropriate sales.

Acquisitions

Selective investments based on profitability and competitiveness even in a rising market,
with a focus on sponsor-developed properties(Decisions in the retail and hotel sector were made with particular care to consider the impact of the COVID-19 pandemic)<Quality of sponsor-developed properties (Note)>(1) Ratio of Greater Tokyo area

Entire portfolio

Sponsor-developed properties(2) Average building age
19.8%

82.8%

Greater
Tokyo

7.8%

97.8%

PMO Akihabara Kita

PROUD FLAT Shibuya Tomigaya

Disposition
Landport Ome Ⅲ (Logistics)

Disposition took future competitive advantage into consideration

NMF Utsunomiya Building (Office)Anticipated acquisition price¥17,000 million

Scheduled transfer price¥2,720 million

Appraisal value¥18,300 million

Appraisal value¥2,390 million

Location

Ome, Tokyo

Notional book value¥2,445 million

NOI yield (after depreciation)

4.5% (3.7%)

NOI yield (after depreciation)

5.6% (2.9%)

Asset age (as of date of acquisition)

1.1 years

Asset age (as of date of disposition)

21.8 years(profitability, asset age, marketability, area growth potential, medium- to long-term operation, etc.)

Improvement of
portfolio quality

Distribution growth(Consider returning gain on sale, if any, through distributions)(Note) PMO, GEMS, Landport, and PROUD FLAT series of properties.

(Reference) Properties Acquired in Aug. 2021 (12th) and Feb. 2022 (13th) FP
Landport Ome Ⅲ

Effect of Asset Replacement

Anticipated acquisition price ¥17.0 bln

Located in approximately 2.9 km from the Ome Interchange on the Ken-O
Expressway and close to National Route 16, allowing for wide-area delivery
to the entire Tokyo metropolitan area.

(Achieved external growth while maintaining LTV acquisition capacity through disposition and cash reserves)(2) Improvement of portfolio quality

24 hours a day, 365 days a year operation with favorable
employment environment• Grew logistics portfolio ratio to second largest (over 20%) through ongoing acquisition of logistics facility• Improved profitability (NOI yield after depreciation (Note 1): asset to be disposed 2.9% ⇒ asset to be acquired 3.7%)• Improved NAV (Note 2) (NAV per unit: +¥231/unit)• Improved Greater Tokyo area ratio (82.8% ⇒ 83.2%)• Improved asset age, after completion of replacement (20.2 years ⇒ 19.8 years)• Improved green certification ratio (Note 3) for materiality (56.3% ⇒ 57.8%)

Located in the Nishi-Tokyo Industrial Park, which is a 10-minute walk from
Ozaku Station on the JR Ome Line, the nearest station, so it can operate 24
hours a day, 365 days a year and allows tenants to maintain a favorable
employment environment.

A “category-wide multi-function” logistic facility
A logistics facility that pursues optimization and efficiency by adopting acategory-wide multi-function that adds functions specific to the target
tenant’s industry needs. Furthermore, environmentally friendly LED lighting
is adopted in the whole building.

To Tsurugashima JCT

5.6%

HotelsRetail(Residential area)

0.6%

5.4%

Retail(Near stations)

HotelsSayama Golf Club

0.6%

Retail(Near stations)

11.2%

Logistics

Main acquisitions
Office45.0%
Residential

19.2%

Landport Ome Ⅱ
Landport Ome Ⅲ

Main sale
End of Aug. 2020 FP

NMF Utsunomiya Building

Residential

18.7%

ur

Om

LP OmeⅠ

Logistics

20.1%

After acquisition and sale

a-

e-K

43.5%
Ozaku
Sta.

Ka

id

aid

o

oS

LP Ome Ⅲ

St

re

et

tree

t

16

Hakonegasaki
Sta.

Universal CityWalk Osaka (Additional stake acquisition of land)

Hamura City Office

ine

eL

Om

iv.

aR

Tam

To Hachioji JCT(Note 1)	NOI yield for the asset to be acquired is calculated based on the anticipated acquisition price, and NOI yield for the asset to be disposed is calculated basedon the scheduled transfer price.
(Note 2)	NAV for the asset to be acquired is calculated based on unrealized gain calculated from notional book value and appraisal value at the time of acquisition, andNAV for the asset to be disposed is calculated based on unrealized gain calculated from notional book value and appraisal value at the time of sale.
(Note 3)	The green certification ratio refers to the percentage of properties with three stars or more for DBJ Green Building Certification, three stars or more for BELS
Certification, and B+ or higher for CASBEE for Real Estate.

Nomura Real Estate Master Fund, Inc.

Iwak

LP Ome Ⅱ

Office(3) Distributions increased by returning gain on sale to unitholders (Feb. 2022 FP: +¥34/unit)

7

res

Exp

ine

17.7%

-O
Ken

Ome IC
y
swa
oL
hik
Hac

11.4%

Building age 1.1 years

Favorable location allowing for wide area delivery to theentire Tokyo metropolitan area

(1) Accumulation of cash flow through acquisition of a new property

Retail(Residential area)

NOI yield 4.5%

Hamura Sta.

YokotaAir Base

Acquisition price¥2,139 mln

Appraisal value¥2,210 mln

Anticipated acquisition
price¥17,000 mln

Location

Ome, Tokyo

Acquisition dateJul 30, 2021

Appraisal value¥18,300 mln

Total floor area

73,087.15 m

Location

Osaka, Osaka

Scheduled date ofacquisition

Jan 6, 2022

Completion

Nov. 2020

Total land area

8,788.67 m2

2

Universal elements and all related indicia TM & © 2019 Universal Studios. All rights reserved. CR19-3958

Nomura Real Estate Master Fund, Inc.

8

Message from the Management

Management Strategy

ESG Measures

Financing Status

Portfolio

Investor Information

Financial Section

Internal Growth -Management StatusOfficeMove-ins: Despite ongoing impacts from the pandemic and declarations of states of
emergency, new contracts have reached their highest levels over recent years.

Despite reduced occupancy rates during the declarations of states of emergency,
continued to raise rent levels by taking advantage of the rent gap.

Changes in move-in floor area (Tsubo)

Changes in period-average occupancy rates
99.0%

99.3%

99.3%

99.1%

98.9%

99.7%

99.3%

98.8%

99.5%

COVID-19 pandemic

99.2%

97.8%

97.3%

Feb. 2016 FP

Aug. 2016 FP

Feb. 2017 FP

Aug. 2017 FP

Feb. 2018 FP

Aug. 2018 FP

Amount of change in monthly rent and rate of change inmonthly rent upon tenant replacement (Note2)
Monthly rent decrease
Monthly rent increase
Monthly rent change rate

20.7%
17.6%

15.9%

6

Monthly rent change rate

15
10

7.0%

7.5%

5

2
0

8

5

7

4

7

-2

600

Aug. 2021 FP

5

4.6%

4

20
3.3%

3.4%

3.0%

2.4%

10

PMO
+2.0％
1.6%

8

15

17

-5

-1

2,140

2,255

1,351

2,052

3,194

2,965 (Note)Feb. 2019 FP

Aug. 2019 FP

Feb. 2020 FP

Aug. 2020 FP

Feb. 2021 FP

Aug. 2021 FP

Feb. 2022 FP(Forecast)

3
2

Among new tenants moving in,approximately 85%
have positive reasons

17

8

7

0

-2

(21,007 tsubo) (24,914 tsubo) (22,830 tsubo) (22,254 tsubo) (16,384 tsubo) (27,162 tsubo)
Feb. 2019 FP Aug. 2019 FP Feb. 2020 FP Aug. 2020 FP Feb. 2021 FP Aug. 2021 FP(Note1)	It is calculated subject to the properties held by NMF excluding the properties which the entire building leased to one tenant.
(Note2)	Figures in parentheses are the floor area upon tenant replacement and the floor area (Tsubo) subject to rent revision. The change in monthly rent is calculated
as the weighted average of all subjected area. The same applies to the following investment sectors.

Move-outs: The trend is toward a dramatic reduction in move-out floor area, withlimited move-out risk from large-scale sections of concern in the future.

Minutes walk to nearest station(Greater Tokyo area) (Note 1)
Up to 3 minutes
walk
73.5％

4–5 minutes
walk
21.9％

(increased floor area, new facility, improved location and specifications)

Number of above with other reasons:7

470 tsubo

Distribution of average rents in Greater Tokyo area (Note 2)
Ratio of properties at ¥20,000/tsubo or lower, which
is a range with solid demand despite the pandemic

Approx. 60%（tsubo）
25,000PMO

Shinjuku Nomura Building

Dramatic reduction[ Aug. 2021 FP ]COVID-19-related 38/70 cases(Remote work 16 cases) (Cost reduction 22 cases)
Approx.
4,100 tsubo
expected

3,001

15,000

Breakdown of reasons for move-out(After rapid rise)Move-out by large tenant[ Feb. 2022 FP (as of September 30) ]COVID-19-related 19/40 cases(Remote work 9 cases) (Cost reduction 10 cases)

As of Sep. 30

2,455

2,204

2,272

1,809

3,130

6,944

3,685

Feb. 2019 FP

Aug. 2019 FP

Feb. 2020 FP

Aug. 2020 FP

Feb. 2021 FP

Aug. 2021 FP

Feb. 2022 FP(Forecast)

Number of pandemic-related
cancellations alsosteadily trending downward

Forecast move-out risks associated with large-scale sections and remote work

8.8%

3,194 tsubo
2,723 tsubo

20,000COVID-19 pandemic

Percentage of total meeting
above conditions:

Number of above with positive reasons:47
40

Portfolio was composed mainly of rental properties with high transportation convenience, and solid demand despite the pandemic.

Changes in move-out floor area (Tsubo)• 1,000 tsubo or more
• Unconfirmed intention to continue as tenant• Unclear impact of remote working

Total move-ins for August 2021 FP:

1

0(5,502 tsubo) (2,740 tsubo) (2,255 tsubo) (1,109 tsubo) (2,052 tsubo) (3,194 tsubo)
Feb. 2019 FP Aug. 2019 FP Feb. 2020 FP Aug. 2020 FP Feb. 2021 FP Aug. 2021 FP

3,101

Reasons for move-in (Aug. 2021 FP)

(%)
6

25

Despite ongoing impacts
from the pandemic,
highest levels reachedover recent years

As of Sep. 30(Note) The figure shows floor area for which is contracted or NMF received applications for occupancy.

+5.0%

5

0

6

Feb. 2021 FP(Millions of yen)
30

15

11.4%

4

Aug. 2020 FP

Average rate of rent increase
within rent revision with rent
increaseMonthly rent increase

20

PMO
+7.8%

Feb. 2020 FP

Monthly rent decrease

(%)
25

10

Aug. 2019 FP

2,401(Down 3.0pt from previous FP)

Amount of change in monthly rent and rate of change inmonthly rent upon rent revision (Note2)+13.7%

Average rate of rent increase
within tenant replacementwith rent increase(Millions of yen)

8

Feb. 2019 FP

Tenancy recovery
after large tenant move-out+5.1%

Rent gaps (Note1)
End of Aug. 2021 FP

Approx.
7,300 tsubo
expected

Remote working difficulties
due to usage patterns
Confirmed intention to continue
as tenant

Up to 5 minutes walk

95.4%
Of this, more than 70 %is within 5 minutes walk of multiple train lines

10,0005,000
0〜¥16,000〜¥18,000〜¥20,000〜¥22,000〜¥24,000〜¥26,000¥26,001〜<PMO> Achieved steady contract progress and rent increases against the backdropof high marketability.
Leasing results for August 2021 FP

975 tsubo
Rent changes rate ＋7.8%

New move-ins

Leasing progress for February 2022 FP

New move-ins (planned)
Rent changes rate

764 tsubo＋16.1%(As of September 30,
including applications
completed)(Contracted
sections only)

Aiming to improve occupancy rates by meeting the positive needs of tenants, which are increasing, andthrough property competitiveness and flexible leasing. (Period-average occupancy rate for August 2021 FP: 97.3% (actual) ⇒Expected rate for February 2022 FP: 97.4% (end of period occupancy rate: 98.3%))(Note 3)Less than
1,000 tsubo
Approx. 67％

9

Nomura Real Estate Master Fund, Inc.

Aiming to achieve positive growth for average rents as well by taking advantage of the rent gap.
(Note 1) Calculated based on the ratio of leasable area. (Note 2) Total leasable areas shown are based on average price per tsubo ranges of owned properties.
(Note 3) Period-average occupancy rate is calculated based on the floor area subject to move-ins and move-outs assumed in the earning forecast.

Nomura Real Estate Master Fund, Inc. 10

Message from the Management

Management Strategy

ESG Measures

Financing Status

Portfolio

Investor Information

Financial Section

Internal Growth -Management StatusLogistics

Residential

Achieved continuous high occupancy, and rent increases when re-contracting,against the backdrop of active logistics demand even during the pandemic.

Despite increased number of cancellations, occupancy rates increased through aflexible leasing strategy, and positive rent growth was achieved in total for tenant
replacements and renewals.

Changes in period-average occupancy rates

Changes in period-average occupancy rates
100.0%

100.0%

100.0%

99.2%

Reversal

98.0%

Average occupancy
rates since incorporation

Feb. 2016 FP

Aug. 2016 FP

Feb. 2017 FP

Aug. 2017 FP

Feb. 2018 FP

Aug. 2018 FP

Feb. 2019 FP

Aug. 2019 FP

Feb. 2020 FP

Aug. 2020 FP

Feb. 2021 FP

Aug. 2021 FP

Sections with expired leases for
February 2022 FP: 15,970 tsubo

100% contracted

100% contracted or under offer

Tenant with expired lease during February 2022 FP

Landport Kashiwa Shonan I: Approx. 14,800 tsubo

Landport Itabashi: Approx. 4,600 tsubo

Of two tenants with leases
expiring, re-contracted tolease one building with one
tenant after improving
economic conditions.

Re-contracted with one
tenant with a lease expiring
after improving economic
conditions.
Rent increase rate:

+6.8%

+4.0%

Logistics portfolio map (Greater Tokyo area)To
Ex meipressway

Hachioji JCT

Landport series
76.5%
Changes in vacancy rates by area on the market
Mar.
2017

Haneda Airport

Tokyo Outer
Ring Road area

Mar.
2018

Mar.
2019

Mar.
2020

Mar.
2021

2.6% 2.5% 0.7% 0.4% 1.6%

National Route 16 area 4.1%

4.4% 4.0% 0.3% 0.0%

Metropolitan Intercity
19.8% 18.9% 12.2% 0.6%
Expressway area

3.1%

Source: “Japan Logistics MarketView” published by CBRE
(Note) Properties with total floor space of 10,000 m2 or more, distance between pillars of 10 m or more, ceiling height of 5.5 m or more for the majority of floors, andfloor weight capacity of 1.5 t/m2 or more.

11 Nomura Real Estate Master Fund, Inc.

COVID-19 pandemic

1,351

1,214

1,260

1,150

Strategy focusedon occupancy rates↓↓
Achieved steady
tenancy recovery(February 2021 FP: 84 days)(August 2021 FP: 64 days)
Aug. 2019 FP

Feb. 2020 FP

Aug. 2020 FP

Feb. 2021 FP

Aug. 2021 FP

Feb. 2019 FP

Aug. 2019 FP

Feb. 2020 FP

Aug. 2020 FP

Feb. 2021 FP

Aug. 2021 FP

Record number of cancellations(Note) The number of contracts and cancellations is affected by the seasons, so figures are for August FP each year.

Amount of change in monthly rent at move-ins
and move-outs

Rate of change in monthly rent at renewals(Thousands of yen)(Thousands of yen)Amount of change in monthly rent

Rate of change in monthly rent

4.3%

2.6%

2.0%

Rate of change in monthly rent

0.4%

0.4%

0.4%

0.4%

0.2%

2,844

3,235

4,617

5,010

２,426

-0.4%

Feb. 2019 FP

Aug. 2019 FP

Feb. 2020 FP

Aug. 2020 FP

Feb. 2021 FP

Aug. 2021 FP

253

217

488

832

681

855

Feb. 2019 FP

Aug. 2019 FP

Feb. 2020 FP

Aug. 2020 FP

Feb. 2021 FP

Aug. 2021 FP

Single-type property occupancy rates and rent increase rates at replacements in the 23 wards within Tokyo

Narita Airport

OthersAug. 2021 FP

Succeeded in lifting the occupancy rates for single-type properties in central
Tokyo(Note), which was a priority issue.
Continued to raise rents at replacements for family-type properties and in areas thatwere relatively strong outside the 23 wards of Tokyo.

More than90%of totalIntercity Expressway

Landport series

Feb. 2021 FP

-557

ay
sw
es
pr
x
nE
ba
Jo
Metropolitan

Atsugi IC

96.1%

0.1%

Logistics portfolio is generally distributed along National Route 16 and theTokyo Outer Ring Road, which are areas of solid demand

Chuo
Expressway

Aug. 2020 FP

Number of contracts

1,293

4.5%

Ratio of advanced logistics facilities(Note)(Acquisition price base)

Higashi-Kantou
Expressway

95.9%<Average vacancy periods>

2.8%

Tokyo Gaikan National Route 16
Expressway

Feb. 2020 FP

COVID-19 pandemic

Amount of change in monthly rent

* Comparison of nominal averagerents without consideration ofshortened rent-free periods

Kashiwa IC

Aug. 2019 FP

1,209

Feb. 2019 FP

Tenant with expired lease during August 2021 FP

Kawagoe IC

Feb. 2019 FP

Number of cancellations

Examples of rent increases when contracting

Kan-Etsu
Expressway

96.4%

Changes in number of lease cancellations (Note)

Sections with expired leases forAugust 2021 FP: 18,273 tsubo

Tohoku Expressway

96.9%

99.4%

Leasing progress for sections with expired leases

Rent increase rate:

97.0%

96.6%

Feb. 2018, 2019,Feb. 2021 FP
2020 FP average Period-averageAug. 2021 FP
Period-average

Occupancy rate August 2021 FP replacement
difference
rent increase rate

5 central wardsof Tokyo

97.9%

94.8%

95.8%

+1.0%

-0.3%

Jonan area

97.4%

95.5%

96.2%

+0.7%

-0.7%

Other wards

97.5%

96.4%

96.2%

-0.2%

+0.4%

Through leasing strategy focused on
occupancy rates:
Increased occupancy rates dramaticallyDespite targeting both rents and occupancy
rates, occupancy rates declined due to the
spreading impact of COVID-19.

For single-type properties, switched to a focus on occupancy rates
in the other wards as well, while aiming to maximize cash flow.
(Period-average occupancy rate for August 2021 FP: 96.1% (actual) ⇒ Expected rate for February 2022 FP: 96.2% (forecast)(Note) Properties with average area per dwelling of less than 30 m2.

Nomura Real Estate Master Fund, Inc. 12

Message from the Management

Management Strategy

ESG Measures

Financing Status

Portfolio

Investor Information

Financial Section

Internal Growth -Management StatusRetail

Despite ongoing impact of the sale of tenants, there was only limited impact onretail sector revenue.

Succeeded in attracting tenants that see opportunities in the current market toopen stores even during the pandemic.
Achieved good results even for restaurant tenants through property
competitiveness and a flexible leasing strategy.
New leasing status (Facilities located near stations)

Sales status for each facility type
• Sales of facilities located in residential areas remained as strong as previously.
• Sales of retail facilities near stations stagnated (mainly restaurant tenants) due to the prolonged request for shortened operating hours, etc.

<Sales status (Change from same month of 2019)>
Kinds

Year 2021 (change from the results of 2019)
Mar.

Apr.

May

Jun.

Jul.

Aug.

Major Tenant

Example of leasing with services tenant withstrong performance

New contracts for August 2021 FP increased by five contracts period-to-period by attracting services tenants.

Number ofnewcontracts

February 2021 FP

August 2021 FP

3 casescases(+5 cases)

nORBESA F3 68.57 tsubo
Restaurant tenant

8

Offices: 1

Services: 4

Retail: 1

Retail: 2

Restaurants: 1

Restaurants: 2

Services tenant(beauty salon)

Summit Store Honamanuma

residential
areas

113%

119%

138%

136%

132%

135%

Food supermarket

Summit Store Mukodaicho(only summit)

residential
areas

95%

98%

101%

97%

108%

110%

Food supermarket

Recipe SHIMOKITA

near
stations

89%

95%

98%

85%

88%

91%

Retail/Services

nORBESAnear
stations

57%

56%

40%

33%

61%

33%

Restaurant/Retail/Services

Universal CityWalk Osaka

nearstations

46%

26%

1%

21%

39%

28%

Restaurant/Retail

GEMS totalnearstations(Status of negotiations with tenants whose
fixed term lease expires)

43%

40%

33%

31%

34%

27%

Restaurant

Planned fixed term lease expirations
for February 2022 FP+4.7%

Trends among restaurant tenants (E.g., GEMS Ichigaya, expiration of fixed term lease)(Left: Background to tenant intention)

8 floors in total

Rent composition for overall retail portfolio (Note 1)
Fixed rent

Rate of rent increase
upon tenant
replacement:

Variable rent

Intention to re-contract (rent deferral planned)+

Move-in demand from companies
related to re-contracting tenant

Fixed rent ratio

The majority was comprised of fixed rents,
so rents linked to sales were very limited.

97.0%

Property has high competitive advantage• L ocated with good access: 3 minutes walk to Ichigaya
Station, 5 minutes walk to Kojimachi Station•H igh visibility, located on a corner block on Nippon TV Dori

Temporary rent reduction to cover impact of pandemic• Rent deferral represents a rent reduction for the time being.
Economic support (rent-free, interior furnishings, etc.)
proposed

7floors in total
HotelsCompleted rebranding, etc. with a focus on stable operations and securing revenue after the end of
the pandemic.
Comfort Inn Naha Tomari Port (Ex-Red Planet Naha Okinawa）

Occupancy rate status (As of August 31, 2021)

Overall retail sector:
Retail facilities near stations:

Changed operator and rebranded, and reopened on July 5, 2021

97.9 %
93.7%

Occupancy rates based on fixed rents
maintained a high level.

TenantGREENS Co., LTD.

Contract period

10 years (fixed-term）
First 1-2 years: fixed rent
From 3rd year: fixed rent + variable rent(GOP-linked)

Monthly rent

The rent level is expected to be the same as or above
the previous level after demand recovers to prepandemic levels.

Rent revenue comparison before/after arrival of COVID-19
February 2020 FP (before COVID-19): ¥6,103 million(Breakdown)
Temporary rent
reduction/exemption:
Variable rent reduction:

Cancellations, etc.:-280 (-4.6%)-151 (-2.5%)-150 (-2.5%)

August 2021 FP：-¥582 million(-9.5%)

Excluding temporary rent reductions/exemptionsand variable rent reductions,the impact of cancellations was very limited.

¥5,520 million (Note 2)

Hotel Vista Sapporo Odori■ Progress of the civil rehabilitation

Operator• Secured approval of rehabilitation schedule on
September 14, 2021 (effective).
• Plan to complete repayment of rehabilitation
receivables, and complete all proceedings, byOctober 31, 2021.

VISTA HOTEL MANAGEMENT CO., Ltd.
fixed rent + variable rent (GOP-linked)

Monthly rent

While implementing a stepped rent reduction for acertain period, lowered variable rent interest rate in
anticipation of recovery after return of demand.

(Note 1) Calculated based on rents in February 2020 FP.
(Note 2) Based on 50 properties owned as of February 2020 FP.

13 Nomura Real Estate Master Fund, Inc.

Nomura Real Estate Master Fund, Inc. 14

Message from the Management

Management Strategy

ESG Measures

Financing Status

Portfolio

Investor Information

Financial Section

ESG Measures
Have been actively implementing a wide range of initiatives since 2015, including industry-first initiatives for a J-REIT.
2015

2016

2017

2018

2019

September 2016GRESB real estate
assessment:“Green Star”

NMF initiatives andachievements
Asset management company
initiatives and achievements

E

February 2019Set ESG materiality issues(Materiality)
Set J-REIT-first long-term targets

2021

May 29, 2019
Included in MSCI Japan ESG SelectLeaders Index

E ーーーーーーーーーーーー

September 2017GRESB real estate
assessment:“5-Star”
September 2018GRESB real estate assessment:“Global Sector Leader”

December 2015
Established Sustainability
Policy2020

October 2018
Participated in Japan
Climate Initiative (JCI)• Raised proportion of “green” properties ininvestment portfolio• Implemented climate change response• Implemented water resource response

ESG Measures (S: Society)

Measures to improve tenant satisfaction
Offered new services for residents at owned residential properties
Bicycle sharing --- Improves transportation convenience and addresses lack of exercise from working from home.
Mobile stores --- Provides quality foodstuff, meals, etc. close to home to help residents enrich their time at home.

September 20, 2019
Issued first NMF green bonds
January 30, 2020
First J-REIT certified and registered for
EcoAction 21 program, an Environmental
Management System (EMS)

S ーーーーーーーーーーーー• Ensured safety and security of tenants
and improved user comfort• Created a workplace environment inwhich everyone is treated fairly andempowered to find his/her job rewarding• Human resource development and talentmanagement

March 5, 2020
Received Minister of the Environment
Award (the Most Excellent Efforts) from
Principles for Financial Action for the 21stCentury

G ーーーーーーーーーーーー• Enhanced governance• Ensured compliance and risk management• Stakeholder engagement and timely andappropriate information disclosure

December 2017
Signatory to Principles for Responsible
Investment (PRI) and United Nations
Environment Programme FinanceInitiative (UNEP FI)

February 26, 2021
Based on Recommendations of
the Task Force on Climaterelated Financial Disclosures(TCFD), disclosed scenario analysis
and financial impact (qualitative
assessment) as a first for
J-REITsS

October 2019
Established a dedicated
ESG department

July 14, 2020
Signatory to Recommendations of the Task
Force on Climate-related Financial
Disclosures (TCFD)

Provided venue for workplace vaccinations against COVID-19
Nomura Real Estate Holdings, Inc. provided a venue for workplace vaccinations for Group directors, employees,
Shinjuku Nomura Building tenants, and their families, at Nomura Conference Plaza on the second floor of the building.

ESG Measures (E: Environment)

Green Certification (Note)[Target] Raise the ratio to 70% by FY2030 (total floor area basis)
Green Certification (With three stars or more or equivalent)Green Certification (Total)

Target70.0%

Implemented a variety of capital investments in owned
properties to reduce their environmental impact(The examples below are from the 12th FP)(1) Saving Energy with LED Lighting

56.3%
50.1%

48.8%
44.7%

FY2017FY2018FY2019FY2020

FY2030[Target] Reduce 40% by FY2030 (compared with 2016)
GHG (Intensity)

Energy Consumption (Intensity)

温 室 効 果 ガス Gas
Greenhouse

・NRE Yotsubashi Building
・PMO Higashi-nihonbashi
・NRE Nishi-Umeda Building・Kawaguchi Logistics Center A Tower
・Landport Hachioji
・Yokosuka More’s City
・PRIME URBAN Shinagawa Nishi
・PRIME URBAN Toyosu
others<Energy reduction by work in the 12th FP>-446 MWh/year (approx.-39.0%)

Initiatives for resilience against natural disasters

NRE Yotsubashi
Building(2) Saving Energy by Upgrading
Air-Conditioners-17.5%-25.1%-28.9%-35.8%FY2016FY2017FY2018FY2019FY2020Target-40.0%
FY2030[Target] Reduce 10% by FY2030 (compared with 2016)
Water Use (Intensity)

水
使 用 量Use
Water

-5.0%

-3.9%

-5.0%

FY2017FY2018FY2019(3) Saving Water by Upgrading Toilets

・NRE Osaka Building

Conducted energy-saving checks
Plans future energy-saving
works based on the resultsof the checks

FY2020

FY2030Asset Manager• Seismic intensity information• Estimated damage-854 MWh/year (approx.-13.9%)<Water use reduction by work in the 12th FP>-4,262 KL/year (approx.-54.0%)

Percentage ofchecked areas(as of February 28, 2021)

64.2%(Total floor area basis)(Note) “ Green Certification” refers to either DBJ Green Building Certification, BELS Certification or CASBEE for Real Estate. “Green Certification (With three stars ormore or equivalent)” refers to three stars or more for DBJ Green Building Certification, three stars or more for BELS Certification, or B+ or higher for CASBEE
for Real Estate.

15 Nomura Real Estate Master Fund, Inc.

<Illustration of mechanism><Energy reduction by work in the 12th FP>

Target-10.0%-30.3%FY2016

・NMF Shinjuku EAST Building
・NMF Hakata Ekimae Building・Kawaguchi Ryoke Logistics Center
・Yokosuka More’s City
othersSystem for distributing information on estimated seismic intensity
・Based on the seismic intensity information provided by National Research Institute for Earth Science and Disaster
Resilience, NMF can utilize a 250 meter mesh to estimate seismic intensity in each area where owned properties arelocated and distribute that information, together with information of estimated damage to NMF properties, by email.
・Understanding the status of individual properties at an early stage enables rapid first response.

Measurement of seismic intensity and distribution of
estimated seismic intensity utilizing a 250 meter mesh

Linked to individual properties owned by NMF

Warning email

System for distributing emails warning of risk of flood inundation
・Based on rainfall information, altitude data and drainage capacity information gathered from government institutions
by CTI Engineering Co., Ltd., together with positional information on NMF owned properties, NMF can predict floodinundation and distribute risk information by email.
・Understanding the status of individual properties at an early stage enables rapid first response.
<Illustration of mechanism>
Asset Manager• Inundation information• Estimated damage

Warning email

Nomura Real Estate Master Fund, Inc. 16

Message from the Management

Management Strategy

ESG Measures

Financing Status

Financing Status

Portfolio

Investor Information

Financial Section

Financial Statement Highlights

Pursuing low interest rates and prolonged borrowing periods through refinancing.

Revenues decreased due to COVID-19, but distributions were achieved as forecast as a result of external and internal
growth, reversal of internal reserves, etc.

Status of Interest-Bearing Debt (As of end of fiscal period)

DPU for Aug. 2021 FP is ¥3,288, down ¥42 (-1.3%) from the Feb. 2021 FP results(Millions of yen)Feb. 2020(9th FP)

Aug. 2020(10th FP)

Feb. 2021(11th FP)

Ended Feb. 28, 2021 Ended Aug. 31, 2021
Differences(11th FP)
(12th FP)

Aug. 2021(12th FP)

Total interest-bearing
debt¥510,727 million¥517,884 million¥517,841 million¥517,798 million

Average remaining
duration

4.82 years

4.97 years

4.97 years

4.92 years

Average interest rate

0.82%

0.76%

0.74%

0.71%

Ratio of long-term debt

87.1%

88.2%

88.7%

89.4%

Ratio of fixed-rate debt

95.6%

95.7%

95.7%

95.7%

LTV

42.8%

43.2%

43.3%

43.4%

Diversification of Repayment Dates (As of end of fiscal period)
Investment corporation bonds (left axis)

Debt (left axis)

Average interest rate (%)(Millions of yen)(%)

60,0001.5

50,000

1.02

1.06

0.99

0.92
0.70

0.66

40,000

0.54

0.67

0.63

0.66

0.59

0.58

0.64

0.64

1.03
0.58

0.50

0.61

0.76
0.54

0.90

1.0

0.64

0.5
0

30,00020,000Result (A)38,06435,172
2,892
22,693
15,973
1,510
3,110
5,482
5,869
6
3,441
2,622
649
15,3702
2,324Result (B)37,51934,6792,839
22,777
16,097
1,531
3,263
5,586
5,715
ー
3,394
2,622
663
14,7414
2,310(B) - (A)
-545
-493
-52
84
123
20
153
103
-154
-6
-47
ー
14
-629
1
-14

2,312

2,297

-14

12
13,048-31
13,01612
12,435ー
12,434

-0
-613
31
-582

(13,022)(12,434)(-588)

Distribution of Earnings aDistribution in Excess of Earnings b
Total Distributions a+b

13,0182,682
15,701

12,433
3,069
15,503

-584
386
-198

Internal Reserves(Total Internal Reserves)-62(3,138)-447(2,691)DPU
Distributions of earnings per unit
Distributions in excess of retained
earnings per unit [allowance foradjustment of temporary differences]
Distributions in excess of retained
earnings per unit [other distributions inexcess of earnings]

3,330
2,761

3,288
2,637

-384
(-447)
(Yen)
-42
-124

374

387

13

195

264

69

Operating Revenue
Rental revenues
Other rental revenues
Operating Expenses
Rental business expenses
Repair expenses
Tax and public dues
Depreciation and amortization
OthersLoss on sales of real estate
Asset management fees
Amortization of goodwill
Other operating expenses
Operating Income
Non-operating Revenues
Non-operating Expenses
Interest Expenses and otherfinancial costs
Other non-operating expenses
Ordinary Income
Extraordinary LossNet Income(Net Income excluding realized
gain)

10,0000Feb. Aug. Feb. Aug. Feb. Aug. Feb. Aug. Feb. Aug. Feb. Aug. Feb. Aug. Feb. Aug. Feb. Aug. Feb. Aug.
2022 2022 2023 2023 2024 2024 2025 2025 2026 2026 2027 2027 2028 2028 2029 2029 2030 2030 2031 2031

Aug.
2038

Feb. （FP）
2040

Scheduled Repayment during
February 2022 FP

Refinancing during August 2021 FP
Repayment Overview (Note 1)

Refinancing Overview (Note 2)

Scheduled Repayment (Note 3)

Total amount of
repayment¥28,650 million

Total amount ofrefinancing¥28,650 million

Total amount of
repayment¥30,025 million

Average interest rate

1.19%

Average interest rate

0.49%

Average interest rate

1.02%

Average remaining
duration

6.7 years

Average remaining
duration

8.1 years

Average remaining
duration

6.6 years(Note1)	Average remaining duration is it at the time of borrowing and average interest rate is weighted average interest rate at the time of repayment. Excluding ¥42.8
million in contractual repayment.
(Note2)	Average interest rate and average remaining duration are those at the time of refinancing.
(Note3)	Average remaining duration is it at the time of borrowing and average interest rate is weighted average interest rate as of the end of August 2021. Excluding¥42.8 million in contractual repayment.

Total Assets
Interest-bearing debt
LTV
Market capitalization
NOI
FFO

DPU
(Yen)

3,600

3,400

Credit Rating Agency

Rating Description

Japan Credit Rating Agency, Ltd. (JCR)

Long-term issuer rating: AA

3,300

Increase factors

Issuer rating: AA-

Decrease factors

Operating Revenue-545

Rental revenues-493

Rent and common area charges(of which, absence of rent reduction/exemption in 11th -556
FP +159, rent reduction/exemption in 12th FP -280)
63

Impact of acquisition-52

Other rental revenues
Increase in utility expenses received-217

Increase in cancellation penalty fee, etc.

165

Operating Expense

84

Rental Business Expenses

123

Decrease in utility expenses paid

-129

Increase in depreciation

103

Increase in taxes and public dues

153
-3

Increase in other expenses
Asset management fees/Other operating
expenses-39

Non-operating Expenses-14Interest Expenses and other financial costs-14

Extraordinary gain and loss

31

Absence of extraordinary loss in 11th FP

31

Net Income-582

Absence of 11th FP’s reversal of internal
reserves-62

12th FP’s reversal of internal reserves

393(partial cover of temporary rent reduction/exemption forrestaurant tenants)

53(assuming earnings forecast announced April 2021)

Reversal of internal reserves

Decrease in rent revenues and common area charges -92 Acquisition of Landport Ome II
Office-60
Decrease in utility expenses received, etc.
Retail-28
Increase in temporary rent reduction/exemption
Logistics+6
Absence in 11th FP+34
Residential+6
12th FP-59
Hotels-16(of which, unreflected forecast -46)

+13
-11
-26

3,330
（13）
-116

3,200

-26

18

3,288

3,288

(95)

(83)

Aug. 2021 FP
DPU(Result)

Aug. 2021 FP
DPU(Forecast)

3,100
Increase in taxes and public dues -32
Increase in depreciation-22
Decrease in utility expenses paid +27
Others+1

3,000

Rating and Investment Information, Inc. (R&I)

1,196,357
517,84143.3%
752,074
27,573
21,167(Millions of yen)

Main Factors in Change of DPU (yen/unit)

3,500

Credit Ratings(Millions of yen)
1,192,507-3,850517,798
-42
43.4%
0.1%
800,169
48,09527,008-565
20,651-515

Main Factors Accounting for Differences
Between the 11th Results and the 12th Results

2,900

Decrease in asset management fees +10
Decrease in interest expenses, etc.
+3
Absence of extraordinary loss, etc.
+50Feb. 2021 FP
DPU(Result)

17 Nomura Real Estate Master Fund, Inc.

Rental revenues

Rental business
expenses

Other expenses

Nomura Real Estate Master Fund, Inc. 18

Message from the Management

Management Strategy

ESG Measures

Financing Status

Portfolio

Investor Information

Financial Section

Market Review
OfficeRetailVacancy Rate (Tokyo Central Five Wards)

Average Monthly Rent (Tokyo Central Five Wards)(%)(Yen/tsubo)

Retail and Restaurant Sales Volume by Store Type Year-on-Year Change (2019 to 2021)
Jan.

Feb.

Mar.

Apr.

May

Jun.

Jul.

20%

10.00

24,0009.43

0%22,901

8.00

22,000Aug.2021
6.31

6.00

-20%

Aug.2021
20,93220,000

-40%
-60%

4.00

18,000

2.49

2.00

-80%

16,000-100%

16,207

Supermarkets
0.00

Drugstores

14,000’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18 ’19 ’20 ’21’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18 ’19 ’20 ’21

Source: Prepared by NREAM based on data from Miki Shoji Co., Ltd.

Source: Prepared by NREAM based on data from Miki Shoji Co., Ltd.

Supply of Office Buildings (Tokyo Central Five Wards)

Rent and Vacancy Rate Matrix (Tokyo Central Five Wards)(Thousands of tsubo)

Rent
(Yen)

800
Forecast

700

21,000500

20,000400

19,000300

18,000200

17,000100

Q3 ‘01
3.24%

’16

’17

’18

’19

’20

’21

’22

’23

’24

’25

1

2

3

4

5

6

7

8

9

10

Vacancy Rate(%)

Source: Prepared by NREAM based on results of surveys by brokers, etc.

New supply (left axis)
New demand (left axis)

20

800,000

Vacancy rate (right axis)

18

700,000

Vacancy rate
(a year or more after completion) (right axis)

16
14
12

8

300,000

6

200,000

4

100,000

2

1.5%

0

Source: Prepared by NREAM based on data from Miki Shoji Co., Ltd.

0

0.4%

’16

’17

’18

’19

’20

’21

(People)(People)Tokyo

Osaka (right axis)

Foreign Visitor Arrivals Year-on-Year Comparisonof 2019 and 2021

09Q1=100(Millions of people)

10,000

2,000

8,000

1,600

6,000

1,200

4,000

125

Single Type 18 m2 – 30 m2
Compact Type 30 m2 – 60 m2
Family Type 60 m2 – 100 m2

400

0

（%）

2019

2021

’16

-400

’17

’18

’19

’20

’21

Source: P repared by NREAM based on data from Ministry of Internal Affairs andCommunications

19 Nomura Real Estate Master Fund, Inc.

20

23.5

24.9

27.9

29.4

20.0

15
10
5
0
’20

’21

’22

’23

’24

’25

(Millions of people)

YoY change (right axis)

2019

4.0

0

3.2

-20

2.4

-40

1.6

-60

2021

60

50

40

115

30

20

105
0.8

0

-2,00022.2

26.4

Total Number of Overnight Guests Year-on-Year Comparisonof 2019 and 2021 (Nationwide, including foreign visitors)

800

2,000

25

’19

Rental Condominium Rent Index (Tokyo’s 23 Wards)

Aichi (right axis)

30

Source:Prepared by NREAM based on data from “IT Navigator 2021 publishedby Nomura Research Institute, Ltd.
*”Years” show fiscal years

HotelsNet Population Inflow (12-month moving average)

Forecast

35’22

Source: Prepared by NREAM based on data from CBRE

Residential

Online retail sales revenue

10

400,000

15,000Japanese Ecommerce (B2C) Market(Trillions of yen)

Forecast

500,000

Previous
bottomQ2 ‘129.43％

16,0000（%）

600,000

Q2 ‘03
8.57%

Pubs/izakaya

Restaurants total

Logistics

900,000

Q2 ‘21
6.05%

Department storesSource: Prepared by NREAM based on data from the Ministry of Economy, Trade and Industry and various organizations in the respective industries
Note: The figures represent change from the same month in 2019 in nationwide sales, partially including preliminary figures. Drugstores, restaurants total, and pubs/izakaya areon an all-shops basis. All others are on an existing-shop basis.

(Tsubo)22,000600

Convenience stores

Large-Scale Rental Logistics Facility Supply and Demandin the Tokyo Metropolitan Area as of June 30, 2021

Previous peakQ2 ‘08
3.49%

Current peakQ1 ‘2023,000 1.5%

New supply

General merchandise stores
(GMS)

95

0

’16

’17

’18

’19

’20

’21

Source:repared by NREAM （アッbasedon datafrom At Home
Co., Ltd.
and
出所：P
マンション賃料インデックス
トホーム
・三井住友トラスト基礎研究所）よりNREAM作成
Sumitomo Mitsui Trust Research Institute Co., Ltd.

-80

-98.3%

Jan.

-99.7

-99.6

-99.6

-99.6

-99.7

-98.3

Feb.

Mar.

Apr.

May

Jun.

Jul.

Source: Prepared by NREAM based on data from JNTO
Note: Preliminary figures are included.

-100

10

0

Jan.

Feb.

Mar.

Apr.

May

Jun.

Jul.

Source: Prepared by NREAM based on data from the Japan Tourism Agency
Note: Preliminary figures are included.

Nomura Real Estate Master Fund, Inc. 20

Message from the Management

Management Strategy

ESG Measures

Financing Status

Portfolio

Investor Information

Financial Section

Portfolio Analysis (As of Aug. 31, 2021)
NUMBER OF PROPERTIES

299

propertiesASSET SIZE

¥1,068,409

millionHotels0.6%

Other Area

17.2%

Portfolio Distribution (Property locations in Japan, millions of yen)

OCCUPANCY RATE

98.1

%

Other

0.5%

1 Property 12 Properties
8,500 10,267

Residential
Facilities

2 Properties
10,39018.9%

Diversification by
location

Office Buildings

Retail Facilities

Retail Facilities(Residential areas)(near stations)

5.5%

Top Ten Tenants
as a Percentage
of Portfolio

3 Properties
7,400
5 Properties
1 Property
3,942
2,030

29.6%
Diversification byproperty type

Diversification bytenant(based on acquisition price)

54 Properties
40 Properties■ Retail
21 Properties■ Logistics
■ Residential 125 Properties
1 Property■ Other
241 Properties

Total

■ Hotels

14 Properties
11 Properties
1 Property
30 Properties
2 Properties

Total

58 Properties■ Office■ Retail■ Logistics
■ Residential(based on leased area)

Sendai City
Other

7 Properties
48,31051 Properties
385,745

Kyoto

70.4%

1 Property
18,3005 Properties
61,450

Nagoya City
5 Properties
7,645

5 Properties
46,375
1 Property
3,460
4 Properties
25,6503 Properties
8,997

2 Properties
6,580
1 Property
2,280
2 Properties
6,440 5 Properties
2,477

Hyogo

Tochigi

1 Property
2,320

26 Properties
108 Properties
68,718149,036

2 Properties
4,520
4 Properties
5,830

4 Properties
49,972

Saitama
1 Property
1,580

5 Properties
9 Properties 37,990
33,9607 Properties
4,632
1 Property
4,900

Hiroshima City
Osaka

1 Property
2,650

Other

Other Areas■ Office

11.4%

22.2%

289 Properties

OthersTokyo Area

Top Ten Properties
as a Percentage ofPortfolio

77.8%

Hotels(based on acquisition price)

Tokyo Area

Other

RetailSapporo City

18.8%
82.8%

Residential

Logistics

44.3%

Diversification byuse

Logistics
Facilities(based on acquisition price)

1 Property
3,600

Office3 Properties
15,9109 Properties
13,471Tokyo

1 Property
3,080

OthersFukuoka City

Chiba
Kanagawa

Naha City

For a detailed list of properties in our portfolio, visit the website below.
https://www.nre-mf.co.jp/en/portfolio/index.html(Note) In the diversification by tenant, the leased areas of properties under pass-through master lease agreements are calculated based on the leased areas of end tenants.

21 Nomura Real Estate Master Fund, Inc.

Nomura Real Estate Master Fund, Inc. 22

Message from the Management

Management Strategy

ESG Measures

Financing Status

Portfolio

Investor Information

Financial Section

Portfolio Gallery
OfficeRetailTOP 3 Properties (Acquisition price)

TOP 3 Properties (Acquisition price)1

NEC Head Office Building
Location: Minato Ward, Tokyo
Acquisition price: ¥44,100 million
Total floor area: 144,476.05 m2

2

Shinjuku Nomura Building
Location: Shinjuku Ward, Tokyo
Acquisition price: ¥43,900 million
Total floor area: 117,258.88 m2

3

Kojimachi Millennium
GardenLocation: Chiyoda Ward, Tokyo
Acquisition price: ¥26,700 million
Total floor area: 16,050.53 m2

1

Universal CityWalk Osaka
Location: Osaka City, Osaka
Acquisition price: ¥17,639 million
Total floor area: 17,769.42 m2 (latest figure)2

Yokosuka More’s City
Location: Yokosuka City, Kanagawa
Acquisition price: ¥13,640 million
Total floor area: 40,030.08 m2 (latest figure)3

Nakaza Cui-daore Building
Location: Osaka City, Osaka
Acquisition price: ¥11,600 million
Total floor area: 8,280.08 m2

Universal elements and all related indicia TM & © 2019 Universal Studios. All rights reserved. CR19-3958

PMO Higashi-Shinbashi

PMO Akihabara Kita

PMO HatchoboriⅠ
Ⅰ
Ⅰ

GEMS Shinbashi

Recipe SHIMOKITANRE Kichijoji Building

Location: Minato Ward, Tokyo
Total floor area: 3,430.06 m2

Location: Taito Ward, Tokyo
Total floor area: 6,367.04 m2

Location: Chuo Ward, Tokyo
Total floor area: 2,051.35 m2

Location: Minato Ward, Tokyo
Total floor area: 1,478.44 m2

Location: Setagaya Ward, Tokyo
Total floor area: 8,552.53 m2

Location: Musashino City, Tokyo
Total floor area: 5,550.35 m2

メルビル

NRE Shibuya Dogenzaka Building

NRE Nishi-Umeda Building

NMF Nagoya Fushimi Building

Summit Store Honamanuma

MEL Building

Izumiya Senrioka

Location: Shibuya Ward, Tokyo
Total floor area: 4,463.86 m2

Location: Osaka City, Osaka
Total floor area: 8,036.71 m2

Location: Nagoya City, Aichi
Total floor area: 4,954.83 m2

Location: Suginami Ward, Tokyo
Total floor area: 2,014.36 m2

Location: Sendai City, Miyagi
Total floor area: 1,756.32 m2

Location: Suita City, Osaka
Total floor area: 24,399.12 m2

23 Nomura Real Estate Master Fund, Inc.

Nomura Real Estate Master Fund, Inc. 24

Message from the Management

Management Strategy

ESG Measures

Financing Status

Portfolio

Investor Information

Financial Section

Portfolio Gallery
Logistics

Residential

TOP 3 Properties (Acquisition price)

TOP 3 Properties (Acquisition price)1

Landport Urayasu
Location: Urayasu City, Chiba
Acquisition price: ¥17,400 million
Total floor area: 71,570.64 m2

2

Landport Itabashi
Location: Itabashi Ward, Tokyo
Acquisition price: ¥15,710 million
Total floor area: 53,561.44 m2

3

Landport OmeⅠ
Ⅰ
Location: Ome City, Tokyo
Acquisition price: ¥14,620 million
Total floor area: 63,879.98 m2

Landport Higashi-Narashino

Landport OmeⅠ

Location: Narashino City, Chiba
Total floor area: 61,573.49 m2

Location: Ome City, Tokyo
Total floor area: 57,721.34 m2

Hanyu Logistics Center

Atsugi Minami Logistics Center A Tower

Hirakata Kuzuha Logistics Center

Location: Hanyu City, Saitama
Total floor area: 24,888.67 m2

Location: Atsugi City, Kanagawa
Total floor area: 9,788.62 m2

Location: Hirakata City, Osaka
Total floor area: 19,628.03 m2

25 Nomura Real Estate Master Fund, Inc.

1

Fukasawa House Towers H&I
Location: Setagaya Ward, Tokyo
Acquisition price: ¥7,140 million
Total floor area: 12,135.36 m2

2

Serenite Shinsaibashi
GrandeLocation: Osaka City, Osaka
Acquisition price: ¥5,567 million
Total floor area: 7,794.23 m2

3

PRIME URBAN Toyosu
Location: Koto Ward, Tokyo
Acquisition price: ¥5,290 million
Total floor area: 9,630.96 m2

Landport Iwatsuki

PROUD FLAT Shibuya Tomigaya

PROUD FLAT AsakusabashiⅠ
Ⅰ
Ⅰ

PROUD FLAT Shirokane Takanawa

Location: Saitama City, Saitama
Total floor area: 24,177.15 m2

Location: Shibuya Ward, Tokyo
Total floor area: 5,079.46 m2

Location: Taito Ward, Tokyo

Location: Minato Ward, Tokyo

Total floor area: 1,575.38 m2

Total floor area: 3,620.46 m2

PRIME URBAN
Meguro Ohashi Hills

PRIME URBAN
Sapporo Riverfront

PRIME URBAN Izumi

Location: Meguro Ward, Tokyo
Total floor area: 3,658.54 m2

Location: Sapporo City, Hokkaido
Total floor area: 21,239.84 m2

Location: Nagoya City, Aichi
Total floor area: 9,636.50 m2

Nomura Real Estate Master Fund, Inc. 26

Message from the Management

Management Strategy

ESG Measures

Distribution Policy

Financing Status

Portfolio

Investor Information

Financial Section

Structure and Organization

Basic Distribution Policy

Distribution Policy for Periods with Gain on Sales

Structure of NMF

Net income + amortization of goodwill

Distributions in excess of earnings may be adjusted to retain cash of an amountequivalent to gain on sale of real estate to promote stable medium- to long-term
management. (Note 1)

Specified Related Party

Investment Corporation

Custodian

Parent Company of the Asset Management Company

Sumitomo Mitsui Trust Bank, Ltd.

Nomura Real Estate Holdings, Inc.
売却益

10

Gain onsales

売却益相当額の留保Internal reserves
equivalent to gainon sale10

10

Amortizationof goodwill
Amortizationof goodwill

Distributions inDistributions
inexcessof earnings
excess of earnings

売却益

10

Gain onsales

NetincomeNet
incomeNet
incomeNet
income

売 却 益を除く

Distribution ofDistribution of
earnings
earnings

Net
当income期
excl.
利益
gain onsales

利益超過分配のれん
償却費
20
Amortizationof goodwill
20

80

10

売却益

売 却 益を除く

Net
当income期
excl.
利益
gain on
sales

80

80

10

10

売却益は分配し、
利益超過分配にて調整

10 Gain on sales is distributed,
and a corresponding
amount is deducted from
distributions in excess ofearnings

Gain on
sales

10

80

Distribution inexcess of earnings

Asset Custody Agreement10

Reserve
Reserve

Nomura Real Estate Development Co., Ltd.

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

Asset
Management
Agreement

Information Provision
Agreement

Information Provider
Nomura Real Estate Development Co., Ltd.
Basic Agreement with respect toLeasing Value Chain

売 却 益を除く(Statement of income)Net income(Statement of income)

当期利益（損益計算書）

Total
distribution
Total
distribution

80

Net income

分配金の内訳

Distribution

Breakdown of

Mitsubishi UFJ Trust and Banking Corporation

Executive Director

Transfer Agency Agreement, General Administration Agreement
Agreement on Special Account Management

Shuhei Yoshida
Supervisory Directors
Mineo Uchiyama
Mika Okada

Nomura Real Estate
Development Co., Ltd.

Auditor

Nomura Real Estate Retail Properties Co., Ltd.

分配方針

Board of Directors

Leasing Value Chain

Nomura Real Estate Partners Co., Ltd.
Net income

Unitholders' Meeting

Koichi Owada

80

Net
income当期
利excl.
益
gain onsales

General Administrator(Institutional Administration /Accounting)Transfer Agent andSpecial Account Administrator

General Administrator (Financial Agent)

Ernst & Young Shin Nihon LLC

Financial
Agent
Agreement

MUFG Bank, Ltd.
Sumitomo Mitsui Banking Corporation※記載の数値は、
policydistributions(Statement ofイメージを示すために例示したものです。
income)*Figures shown above are for illustrative purposes only

Organization of NREAM
Distributions in Excess of Earnings in the 12th Fiscal Period
About distribution in excess of earnings

Reversal of internal reserves

Compensation for some of the decline
in sales caused by COVID-19 infection

Distribution of allowance for temporary difference adjustments

General Meeting of Shareholders

Other distributions in excess of earnings

Investment Committee(Millions of yen)

447
1,244

Amortizationof goodwill

2,622

2,622

3,069

Total distribution¥15,503 million(¥3,288/unit)

Distributions
in excess ofearnings¥3,069 million(¥651/unit)

Other distributions
in excess of earnings(Income tax notwithheld)¥1,244 million(¥264/unit)

Net income(Statement ofincome)12,434

Distribution
policy12,434

Total distribution(Before adjustmentof fractions lessthan one unit)

12,433

Total distribution(After adjustmentof fractions lessthan one unit)

Compliance Committee

President & CEO

Risk Management Committee
NPR Valuation Committee
Project Screening Committee

1,825

1,824

(fractional
adjustment)

Corporate Planning

Distributions ofearnings, etc.
(Income tax withheld)¥14,258 million(¥3,024/unit)

12,434

Board of Directors

3,069（Note 2）Net
incomeStatutory Auditors

Distributionsof earnings¥12,433 million(¥2,637/unit)

12,433

Allowance fortemporarydifference
adjustments

Distributions inexcess of
earnings(breakdown)International Business Planning
Legal & Compliance

Chief Strategy Officer
Private Fund Management
NMF Investment Management GroupInternal Audit

Fund Management

Finance & Accounting

Asset Management I

Client Relations & Marketing

Asset Management II

Acquisitions

NPR Investment Management

Investment Management Planning(Note 1)	When there is a gain on sales, NMF’s policy is, in principle, to set aside an amount equivalent to the gain that is not more than the amount of amortization of
goodwill as retained earnings within the scope that will not be subject to income tax.
(Note 2)	The amount is obtained by deducting underdepreciation, etc. (provision deduction items) attributable to the difference between depreciation in tax andaccounting treatments from amortization of goodwill, etc. (provision addition items).

27 Nomura Real Estate Master Fund, Inc.

Nomura Real Estate Master Fund, Inc. 28

Message from the Management

Management Strategy

ESG Measures

Financing Status

Portfolio

Investor Information

Financial Section

Investor Information
Composition of Unitholders

IR ACTIVITIESForeign Corporations
628 2.0%
Financial Institutions(including financial
instrument businesses)
240 0.8%

Other Domestic
Corporations
528 1.7%

Other Domestic
Corporations
324,920 6.9%

Individuals
and Others
311,165
6.6%

Financial Institutions(including financial
instrument businesses)
2,925,384 62.0%

Nomura Real Estate Master Fund, Inc. - IR Activities
We are committed to SDGs in addition to its operational status and strive to make disclosures easy for investors to understand.

Official Website
Number ofinvestment units
Total

Unitholder
composition
Total

31,460Foreign
Corporations
1,153,731
24.5%

Individuals
and Others
30,064 95.6%

4,715,200

IR Calendar
Fiscal period

Announcement of financial results

End of February
January

February

Fiscal period

Mid-April
March

April

Announcement of financial results

End of August
May

June

July

AugustMid-October
September

OctoberNovember December
12月

Mid-May

Mid-November

Commencement of payment of distributions
Release of Asset Management Report

Commencement of payment of distributions
Release of Asset Management Report

Unitholder Information
The Process for Changing Your Address and Other Information
To change your address, name, seal, or other information, please contact the securities firm where your account was

ESG Annual Report

established.
Distributions
Stockholders can collect distributions at a Japan Post Bank or post office. If the receipt date has passed, please refer to instruc-～ &RQWHQWV ～tions on the back of the distribution receipt and either send it to the Corporate Agency Division of Mitsubishi UFJ Trust and＞ 3ROLFLHV DQG 0DQDJHPHQW 6WUXFWXUHV ・・・・・・・・・・・・・・＞ 0DWHULDOLW\＞ 6WDNHKROGHU(QJDJHPHQW

Banking Corporation or present it at the counter of one of the bank’s branches. In addition, regarding distributions going for-

Unitholder record date for voting
eligibility

The last day of February 2017, and then the last day of February every second year or a dateannounced in advanceDistribution payment record dates

The last days of February and August of every year

Stock exchange listings

Tokyo Securities Exchange (securities code: 3462)

Newspaper for announcements

Nihon Keizai Shimbun

Share transfer agent

Mitsubishi UFJ Trust and Banking Corporation

Contact information
for the share transfer agent

Corporate Agency Division, Mitsubishi UFJ Trust and Banking Corporation
1-1, Nikko-cho, Fuchu, Tokyo, Japan
TEL. 0120-232-711 (toll free) in Japan only
Mailing address: P.O. Box #29 Shin-Tokyo Post Office, Tokyo, Japan 137-8081
Corporate Agency Division, Mitsubishi UFJ Trust and Banking Corporation

29 Nomura Real Estate Master Fund, Inc.

・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・

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＞ ,QWHUQDWLRQDO,QLWLDWLYHVDQG&HUWLILFDWLRQV ・・・・・・・・

Ｐ．

2XU3RUWIROLR

2021.7

1RPXUD5HDO(VWDWH0DVWHU)XQG,QF

・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・

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＞ (QYLURQPHQWDO 0HDVXUHV（Ｅ）・・・・・・・・・・・・・・・・・・・・・

Ｐ．

＞ 6RFLDO 5HVSRQVLELOLW\（Ｓ）・・・・・・・・・・・・・・・・・・・・・・・・・

Ｐ．

＞ *RYHUQDQFH（Ｇ） ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・

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＞ *UHHQ)LQDQFH

・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・

Ｐ．

＞ (6* 'LVFORVXUH3ROLF\DQG5HSRUWLQJ)UDPHZRUN ・・・

Ｐ．

NMF’s principal LQLWLDWLYHVDQGDFKLHYHPHQWVIURP-XO\WR-XQH

The last days of February and August of every year
At least once every two years in principle

Ｐ．
Ｐ．

＞Raising the Proportion of “Green” Properties in(6* $QQXDO5HSRUWImportant Reminders for Unitholders

General meeting of unitholders

Ｐ．

・・・・・・・・・・・・・・・・・・・・・・・＞ 6WDQGDUGV

ward, if you wish distributions to be paid in the form of bank deposits or other, please contact your securities firm.

Closing dates

・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・

3DJH

15($0H[SUHVVHGLWVVXSSRUWIRUWKHUHFRPPHQGDWLRQVRIWKH7DVN)RUFHRQ&OLPDWHUHODWHG)LQDQFLDO'LVFORVXUHV 7&)' DQGLWGLVFORVHGLQIRUPDWLRQEDVHGRQWKH7&)'5HFRPPHQGDWLRQV10)PDGHVWHDG\ SURJUHVVWRZDUGDFKLHYLQJ.3, DFWXDOUHVXOWV 10)LVVXHG JUHHQERQGV

7KLVUHSRUWZDVSUHSDUHGEDVHGRQLQIRUPDWLRQRQ10)RIILFLDOZHEVLWHDVRI-XO\
For the more updated information on NMF’s ESG activities, please refer to its official website.

2

IR Activities■ IR tour of the financial results on Feb.2021 period for domestic institutional investors(Conducted by telephone conference)■ One-on-one IR meetings with overseas investors in North America, Europe and in Asia
(Conducted by telephone conference)

Nomura Real Estate Master Fund, Inc. 30

Message from the Management

Management Strategy

ESG Measures

Financing Status

Thousands of YenPortfolio

Investor Information

Financial Section

BALANCE SHEETAs of February 28, 2021

As of August 31, 2021

Thousands of Yen

As of February 28, 2021

As of August 31, 2021

ASSETSLIABILITIESCurrent Assets:
Cash and bank deposits
Rental receivables
Other current assets
Total current assets

Current Liabilities:
Trade accounts payable
Current portion of long-term debt
Lease obligations
Other accounts payable
Accrued expenses
Accrued income taxes
Accrued consumption taxes
Rent received in advance
Unearned revenue
Provision for loss on disaster
Derivatives liabilities
Other current liabilities
Total current liabilities

2,482,387
58,760,600
871
3,432,497
314,504
1,028
552,992
5,641,129
94,95231,000106,143
18,80771,436,916

2,588,017
55,090,600
871
2,763,065
357,458
1,125
957,285
5,655,117
60,23330,45061,671
11,18867,577,084

Long-term Liabilities:
Investment corporation bonds
Long-term debt
Lease obligations
Long-term advances received
Security deposits from tenants
Derivatives liabilities
Total long-term liabilities

32,000,000
427,081,000
2,904
34,40142,542,701
245,210
501,906,216

32,000,000
430,708,200
2,468
14,854
42,161,565
141,998
505,029,087

Total Liabilities

573,343,133

572,606,171

244,606,999

244,739,887

394,012,959(14,994,380)(13,763,038)(28,757,419)
365,255,539
13,503,646
378,759,186
623,366,185

394,012,959(16,624,976)(14,815,391)(31,440,368)
362,572,590
12,786,253
375,358,843
620,098,731(351,354)(351,354)(197,332)(197,332)

623,014,831

619,901,398

1,196,357,965

1,192,507,570

Property and Equipment:
Land
Buildings and structures
Machinery and equipment
Tools, furniture and fixtures
Leased assets
Construction in progress		Subtotal
Less accumulated depreciation
Net property and equipment
Investments and Other Assets:
Goodwill
Leasehold rights
Intangible assets
Long-term prepaid expenses
Long-term deposits
Security deposits
Derivative assets
Deferred investment corporation bond issuance costs
Total investments and other assets
Total Assets
The accompanying notes to financial statements are an integral part of these statements.

63,840,679
848,941
1,368,039
66,057,659

63,111,539
722,315
1,282,492
65,116,347

733,890,292
360,001,455
1,868,183
1,573,678
4,752
56,913
1,097,395,275(57,435,192)
1,039,960,082

736,068,822
362,880,018
2,017,603
1,658,047
4,752
124,467
1,102,753,711(63,009,077)
1,039,744,634

77,720,251
8,957,761
60,632
1,976,031
542,235
925,784

75,098,009
8,957,374
51,714
1,979,162
478,665925,784
6,336
149,540
87,646,588
1,192,507,570—

157,524
90,340,222
1,196,357,965

NET ASSETS
Unitholders’ Equity:
Unitholders’ capital
Surplus		Capital surplus
		 Allowance for temporary difference adjustment
		 Other deductions from capital surplus
		 Total deductions from capital surplus
		 Net capital surplus
		Retained earnings
		Total surplus
Total unitholders’ equity
Valuation and Translation Adjustments:
Deferred gains or losses on hedges
Total valuation and translation adjustments
Total Net Assets
Total Liabilities and Net Assets
The accompanying notes to financial statements are an integral part of these statements.

31 Nomura Real Estate Master Fund, Inc.

Nomura Real Estate Master Fund, Inc. 32

Message from the Management

Management Strategy

ESG Measures

STATEMENT OF INCOME AND RETAINED EARNINGS

Portfolio

Investor Information

For the period from September 1, 2020 to February 28, 2021
Thousands of Yen

For the period
from March 1, 2021
to August 31, 2021

Unitholders’ Equity

OPERATING REVENUES AND EXPENSES
Operating Revenues:
Real estate rental revenues
Operating Expenses:
Real estate rental expenses
Asset management fees
Loss on sale of real estate
Asset custody fees
Administrative service fees
Amortization of goodwill
Other operating expenses
Operating Income

38,064,606
38,064,606

37,519,267
37,519,267

15,973,489
3,441,901
6,245
57,100173,2432,622,242
419,470
22,693,693
15,370,912

16,097,387
3,394,277—
57,154
178,250
2,622,242
428,539
22,777,851
14,741,415

NON-OPERATING REVENUES AND EXPENSES
Non-Operating Revenues:
Interest income
Reversal of dividends payable
Interest on refund
Other non-operating revenues
Non-Operating Expenses:
Interest expense
Interest expenses on investment corporation bonds
Amortization of investment corporation bonds issuance costs
Loan arrangement fees
Other non-operating expenses

Ordinary Income
Extraordinary Losses:
Loss on disaster		 Income before Income Taxes
Income Taxes:
		Current		Net Income
		 Retained earnings brought forward
		 Retained Earnings at End of Period
The accompanying notes to financial statements are an integral part of these statements.

Financial Section

STATEMENT OF CHANGES IN NET ASSETS
Thousands of Yen

For the period
from September 1, 2020
to February 28, 2021

Financing Status

326
2,170
230
4
2,732

328
3,024
—
1,142
4,494

1,716,238
170,8027,984
425,105
4,824
2,324,955

1,677,807
173,528
7,984
446,432
4,824
2,310,577

13,048,689

12,435,333

31,00031,00013,017,689——
12,435,333

1,078
1,078
13,016,610

1,171
1,171
12,434,161

487,036

352,091

Balance as of September 1, 2020
Distributions of retained earnings
Reversal of allowance for temporary difference
adjustments
Distributions in excess of net earnings fromallowance for temporary difference adjustments
Other distributions in excess of net earnings
Net income
Net changes of items other than unitholders' equity
Total changes of items during the period
Balance as of February 28, 2021

SurplusCapital surplus
Deductions from capital surplus
Allowance fortemporary
Other
Total
difference
deductions from deductions fromadjustment
capital surplus capital surplus(13,515,837)(12,398,315)(25,914,153)
—
—
—

Units
4, 715,200—

Unitholders’capital244,307,911—

Capitalsurplus394,012,959——

299,087—

299,087(299,087)

—

—

—
—
—
—
—
4, 715,200————
299,087244,606,999

—
—
—
—
—
394,012,959(1,777,630)———(1,478,542)(14,994,380)—(1,065,635)——(1,364,723)(13,763,038)(1,777,630)(1,065,635)——(2,843,265)(28,757,419)(1,777,630)(1,065,635)——(2,843,265)
365,255,539

Thousands of Yen

Unitholders’ Equity
Surplus
Balance as of September 1, 2020
Distributions of retained earnings
Reversal of allowance for temporary difference
adjustments
Distributions in excess of net earnings fromallowance for temporary difference adjustments
Other distributions in excess of net earnings
Net income
Net changes of items other than unitholders' equity
Total changes of items during the period
Balance as of February 28, 2021

Valuation and Translation Adjustments
Total valuation andDeferred gains ortranslation
losses on hedges
adjustments
Total net assets(484,242)(484,242)
625,505,650——(12,797,052)

Retained earnings
13,583,176(12,797,052)

Total surplus
381,681,981(12,797,052)

Total
unitholders’equity625,989,893(12,797,052)(299,087)(299,087)

—

—

—

—

—
—
13,016,610—(79,529)
13,503,646(1,777,630)(1,065,635)
13,016,610—(2,922,795)
378,759,186(1,777,630)(1,065,635)
13,016,610—(2,623,707)
623,366,185———
132,888
132,888(351,354)———
132,888
132,888(351,354)(1,777,630)(1,065,635)
13,016,610
132,888(2,490,819)
623,014,831

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

For the period from March 1, 2021 to August 31, 2021
Thousands of Yen
Unitholders’ Equity

Balance as of March 1, 2021
Distributions of retained earnings
Reversal of allowance for temporary difference
adjustments
Distributions in excess of net earnings fromallowance for temporary difference adjustments
Other distributions in excess of net earnings
Net income
Net changes of items other than unitholders’ equity
Total changes of items during the period
Balance as of August 31, 2021

SurplusCapital surplus
Deductions from capital surplus
Allowance fortemporary
Other
Total
difference
deductions from deductions fromadjustment
capital surplus capital surplus(14,994,380)(13,763,038)(28,757,419)
—
—
—

Units
4,715,200—

Unitholders’capital244,606,999—

Capitalsurplus394,012,959——

132,888—

132,888(132,888)

—

—

—
—
—
—
—
4,715,200————
132,888244,739,887

—
—
—
—
—
394,012,959(1,763,484)———(1,630,596)(16,624,976)—(919,464)——(1,052,352)(14,815,391)(1,763,484)(919,464)——(2,682,948)(31,440,368)(1,763,484)(919,464)——(2,682,948)
362,572,590



13,503,646

12,786,253

Net capitalsurplus368,098,805—

Thousands of Yen

Unitholders’ Equity
Surplus
Balance as of March 1, 2021
Distributions of retained earnings
Reversal of allowance for temporary difference
adjustments
Distributions in excess of net earnings fromallowance for temporary difference adjustments
Other distributions in excess of net earnings
Net income
Net changes of items other than unitholders’ equity
Total changes of items during the period
Balance as of August 31, 2021

Net capitalsurplus365,255,539—

Valuation and Translation Adjustments
Total valuation andDeferred gains ortranslation
losses on hedges
adjustments
Total net assets(351,354)(351,354)
623,014,831——(13,018,667)

Retained earnings
13,503,646(13,018,667)

Total surplus
378,759,186(13,018,667)

Total
unitholders’equity623,366,185(13,018,667)(132,888)(132,888)

—

—

—

—

—
—
12,434,161—(717,393)
12,786,253(1,763,484)(919,464)
12,434,161—(3,400,342)
375,358,843(1,763,484)(919,464)
12,434,161—(3,267,454)
620,098,731———
154,021
154,021(197,332)———
154,021
154,021(197,332)(1,763,484)(919,464)
12,434,161
154,021(3,113,432)
619,901,398

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

33 Nomura Real Estate Master Fund, Inc.

Nomura Real Estate Master Fund, Inc. 34

Message from the Management

Management Strategy

ESG Measures

STATEMENT OF CASH FLOWS

Portfolio

Investor Information

Financial Section

NOTES TO FINANCIAL STATEMENTS

Thousands of Yen

For the period
from September 1, 2020
to February 28, 2021

For the period
from March 1, 2021
to August 31, 2021

CASH FLOWSCash Flows from Operating Activities
Income before income taxes
Depreciation
Amortization of goodwill
Amortization of investment corporation bonds issuance costs
Increase (Decrease) in provision for loss on disaster
Interest income
Interest expense
Loss on disposal of property and equipment
Decrease (Increase) in rental receivables
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
Decrease in property and equipment in trust due to sales
Other		Subtotal
Interest received
Interest paid
Income taxes paid
		Net cash provided by (used in) operating activities

13,017,689
5,483,396
2,622,242
7,984
27,189(326)
1,887,041
8,416
210,746
113,980(14,761)(54,472)
74,558418,287
56,967
37,695
131,32124,027,957
326(1,967,252)(3,824)22,057,206

12,435,333
5,587,125
2,622,242
7,984
(550)
(328)
1,851,336
15,436
97,507(3,130)63,569105,630(108,257)
404,292
13,987—32,912
23,125,092
328(1,862,616)(1,074)
21,261,729

Cash Flows from Investing Activities
Payments for purchases of property and equipment
Payments for purchases of leasehold rights and intangible assets
Reimbursement of security deposits to tenants
Proceeds from security deposits from tenants
Payments from security deposits
Proceeds from security deposits
		Net cash provided by (used in) investing activities(18,027,237)(12,390)(980,430)
1,307,669(52)
10,720(17,701,720)(5,922,923)(17,636)(1,594,948)
1,284,481——(6,251,026)

32,400,000(32,442,800)(12,795,769)

28,650,000(28,692,800)(13,014,277)

Cash Flows from Financing Activities
Proceeds from long-term debt
Repayments of long-term debt
Distributions to unitholders
Distributions in excess of net earnings from allowance fortemporary difference adjustments
Other distributions in excess of net earnings
		Net cash provided by (used in) financing activities(1,777,350)(1,763,205)(1,065,245)(15,681,165)(919,559)(15,739,842)

Net Increase (Decrease) in Cash and Cash Equivalents
Cash and Cash Equivalents at Beginning of Period
Cash and Cash Equivalents at End of Period(11,325,679)
75,166,359
63,840,679(729,140)
63,840,679
63,111,539

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

Financing Status

1. ORGANIZATION
Nomura Real Estate Master Fund, Inc. (NMF) is a real estate investment corporation formed to own and invest primarily in
office buildings, retail facilities, logistics and residential facilities. NMF is externally managed by a licensed asset managementcompany, Nomura Real Estate Asset Management Co., Ltd. (“NREAM”). NREAM is a wholly-owned subsidiary of Nomura Real
Estate Holdings, Inc. NMF was established on October 1, 2015 through the consolidation type merger involving the former
Nomura Real Estate Master Fund, Inc. (hereinafter the “former NMF”), Nomura Real Estate Office Fund, Inc. (hereinafter“NOF”) and Nomura Real Estate Residential Fund, Inc. (hereinafter “NRF”), and listed its investment securities (TSE code:3462) on the Real Estate Investment Trust Section of the Tokyo Stock Exchange on October 2 of the same year.
NMF adopts the basic policy of investing primarily in real estate and other assets to secure stable income and steady growth ofassets under management over the medium to long term. In order to realize this basic policy, NMF adopts an investment
strategy that centers on the Greater Tokyo area (Tokyo, Kanagawa, Chiba and Saitama prefectures), which has strong tenant
demand, while also considering regional diversification through the three major metropolitan areas and cabinet-order designated cities, etc. By combining the “diversified type strategy” in which investments are made in facilities of a variety of sectors
such as office buildings, retail facilities, logistics and residential facilities with the “large-scale REIT strategy,” which pursues theeffects of diversifying properties and tenants, to make the portfolio more stable as well as with the utilization of the “leasing
value chain” with the Nomura Real Estate Group, the sponsor, NMF will aim to increase unitholder value by securing stable
income and steady growth of assets under management over the medium to long term.

2. BASIS OF PRESENTATION
NMF maintains its accounting records and prepares its financial statements in accordance with accounting principles generally
accepted in Japan (“Japanese GAAP”), including provisions set forth in the Investment Trust Act of Japan, the Companies Act ofJapan, the Financial Instruments and Exchange Act of Japan and related regulations, which are different in certain respects as tothe application and disclosure requirements of International Financial Reporting Standards.
The accompanying financial statements are a translation of the audited financial statements of NMF, which were prepared inaccordance with Japanese GAAP and were presented in NMF’s Securities Report filed with the Kanto Local Finance Bureau. In
preparing the accompanying financial statements, certain reclassifications and modifications have been made to the financial
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 in accordancewith Japanese GAAP.
NMF’s fiscal period is a six-month period which ends at the end of February or August. NMF does not prepare consolidated
financial statements because it has no subsidiaries.

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

3 - 70 years
5 - 45 years
6 - 17 years
3 - 20 years

Intangible assets
Intangible assets are amortized by the straight-line method.
Goodwill is amortized using the straight-line method over 20 years.
Long-term prepaid expenses
Long-term prepaid expenses are amortized by the straight-line method.

35 Nomura Real Estate Master Fund, Inc.

Nomura Real Estate Master Fund, Inc. 36

Message from the Management

Management Strategy

ESG Measures

Financing Status

Portfolio

Investor Information

Financial Section

NOTES TO FINANCIAL STATEMENTS
Impairment of fixed assets
NMF reviews fixed assets for impairment whenever events or changes in circumstances indicate that the carrying value of 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 thewrite-down is recorded as an impairment loss during the period in which it occurs.
Deferred investment corporation bond issuance costs
Deferred investment corporation bond issuance costs are amortized by the straight-line method over the respective terms of
the bonds.
Investment units issuance expenses
The entire amount is expensed as incurred.
Allowances and provisions(1) Allowance for doubtful accounts
	For allowance for doubtful accounts against possible losses arising from default on receivables, the uncollectable amount isestimated and recorded by investigating collectability based on historical loan loss ratios for general receivables and on acase-by-case examination for doubtful and other specific receivables.
(2) Provision for loss on disaster	The amount that is reasonably estimated at the end of the previous fiscal period under review is recorded to cover expenditures for restoration etc. following the 2021 Fukushima Earthquake.
Accounting treatment of beneficial interests in real estate
All assets and liabilities held in trust, for which the real estate in possession of NMF was entrusted, and all related earnings andexpenses 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.
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.
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 theassessment made by the local government. The amount applicable to the buyer of a property is usually settled between eachparty and capitalized as part of the acquisition cost of the property. The capitalized property related taxes amounted to ¥4,533
thousand for the fiscal period ended February 28, 2021 and are not applicable in the current fiscal period.
Income taxes
Deferred tax assets and liabilities are computed based on the differences between the financial statements and income tax
bases of assets and liabilities using the applicable statutory tax rates.
Consumption taxes
Consumption taxes received and paid are not included in the accompanying statement of income and retained earnings.

(Accounting standards issued but not yet applied)“Accounting Standard for Revenue Recognition” (the Accounting Standards Board of Japan (ASBJ) Statement No. 29, issued by
ASBJ on March 31, 2020)“Implementation Guidance on Accounting Standard for Revenue Recognition” (ASBJ Guidance No. 30, issued by ASBJ on
March 31, 2020)(1) Overview
Comprehensive accounting standards on revenue recognition were developed jointly by the International AccountingStandards Board (IASB) and the US Financial Accounting Standards Board (FASB), and were released publicly in May 2014 as“Revenue from Contracts with Customers” (IFRS 15 by the IASB, and Topic 606 by the FASB). In light of this, the ASBJ
developed a comprehensive accounting standard on revenue recognition, and issued it together with implementation
guidance.
The basic policy adopted by the ASBJ in developing the accounting standard was to start by incorporating the basic principles of IFRS 15 from the perspective of comparability between financial statements, which is one of the benefits of maintaining consistency with IFRS 15. Then, where consideration should be given to practices used up to that time in Japan, the
ASBJ added alternative treatments, to the extent they do not impair comparability.
(2) Scheduled date of application
The accounting standard and guidance will be applied from the beginning of the fiscal period ending February 28, 2022.
(3) Impact of applying the new accounting standard.
The impact of applying the accounting standard and implementation guidance on the financial statements is currently underevaluation.
“Accounting Standard for Fair Value Measurement” (ASBJ Statement No. 30, issued by ASBJ on July 4, 2019)“Implementation Guidance on Accounting Standard for Fair Value Measurement (ASBJ Guidance No. 31, issued by ASBJ on
July 4, 2019)(1) Overview
The IASB and the FASB have established detailed guidance on measuring fair value (IFRS 13 “Fair Value Measurement”
issued by the IASB, and Topic 820 “Fair Value Measurement” issued by the FASB). In order to improve comparability with theprovisions of these international accounting standards, the ASBJ gave extensive consideration primarily regarding guidanceand disclosure concerning the fair value of financial instruments, following which it issued the Accounting Standard for Fair
Value Measurement and the Implementation Guidance on Accounting Standard for Fair Value Measurement.
The basic policy adopted by the ASBJ in developing the accounting standard was to fundamentally incorporate all of theprovisions of IFRS 13 from the perspective of improving comparability of financial statements between companies in Japanand overseas by using uniform methods of calculation. Then, taking account of practices used up to that time in Japan, the
ASBJ established other treatment for individual items, to the extent it does not significantly impair comparability between
financial statements.
(2) Scheduled date of application
The accounting standard and guidance will be applied from the beginning of the fiscal period ending February 28, 2022.
(3) Impact of applying the new accounting standard.
The impact of applying the accounting standard and implementation guidance on the financial statements is currently underevaluation.

Derivative financial instruments
NMF utilizes interest-rate swap contracts as derivative financial instruments only for the purpose of hedging its exposure tochanges in interest rates. NMF defers recognition of gains or losses resulting from changes in the fair value of interest-rate
swap contracts which meet the criteria for deferral hedge accounting.
Although deferral hedge accounting is generally applied, NMF applies the 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 atfair value; instead, the net amount paid or received under the interest-rate swap contract is recognized and included in interest
expense or income.

37 Nomura Real Estate Master Fund, Inc.

Nomura Real Estate Master Fund, Inc. 38

Message from the Management

Management Strategy

ESG Measures

Financing Status

Portfolio

Investor Information

Financial Section

NOTES TO FINANCIAL STATEMENTS

4. CASH AND CASH EQUIVALENTS

6. SCHEDULE OF PROPERTY AND EQUIPMENT
Property and equipment as of February 28, 2021 and August 31, 2021 consist of the following:

Cash and cash equivalents as of February 28, 2021 and August 31, 2021 consist of the following:

Cash and bank deposits
Cash and cash equivalents

Thousands of Yen

As of February 28, 2021

As of August 31, 2021

63,840,679
63,840,679

63,111,539
63,111,539

Important contents of the non-cash transactions:Not applicable.

5. ASSETS PLEDGED AS COLLATERAL AND SECURED LIABILITIESThe assets pledged as collateral are as follows:

Buildings in trust
Land in trust
Structures in trust
Tools, furniture and fixtures in trust
Total

Thousands of Yen

As of February 28, 2021

As of August 31, 2021

3,274,450
6,096,368
4,438
4,095
9,379,352

3,239,960
6,096,368
4,794
3,710
9,344,833

The secured liabilities are as follows:

Tenant leasehold and security deposits in trust
Total

39 Nomura Real Estate Master Fund, Inc.

Thousands of Yen

As of February 28, 2021

As of August 31, 2021

726,648
726,648

726,648
726,648

Thousands of Yen

As of February 28, 2021
Land
Buildings and structures
Accumulated depreciation
Machinery and equipment
Accumulated depreciation
Tools, furniture and fixtures
Accumulated depreciation
Land in trust
Buildings and structures in trust
Accumulated depreciation
Machinery and equipment in trust
Accumulated depreciation
Tools, furniture and fixtures in trust
Accumulated depreciation
Lease assets in trust
Accumulated depreciation
Construction in progress
Total

Acquisition costs
311,019,052
159,563,452(21,135,533)
986,902(563,469)
511,319(210,485)
422,871,240
200,438,003(34,844,012)
881,280(217,496)
1,062,358(462,875)
4,752(1,320)56,913
1,039,960,082

Book value
311,019,052
138,427,919
423,433
300,833
422,871,240
165,593,990
663,784
599,483
3,432
56,913
1,039,960,082

As of August 31, 2021
Acquisition costs
313,197,582
160,252,956(23,504,974)
1,049,441(594,655)
569,914(254,552)
422,871,240
202,627,061(37,847,583)
968,161(263,601)
1,088,132(541,993)
4,752(1,716)
124,467
1,039,744,634

Book value
313,197,582
136,747,981
454,786
315,361
422,871,240
164,779,478
704,560
546,139
3,036
124,467
1,039,744,634

Nomura Real Estate Master Fund, Inc. 40

Message from the Management

Management Strategy

ESG Measures

Financing Status

Portfolio

Investor Information

Financial Section

NOTES TO FINANCIAL STATEMENTS
7. LONG-TERM DEBTAs of February 28, 2021

Long-term debts as of February 28, 2021 and August 31, 2021 consist of the following:Amount(Thousands of Yen)

As of February 28, 2021

Unsecured loans from banks due on March 26, 2021
Unsecured loans from banks due on May 26, 2021
Unsecured loans from a bank due on May 26, 2021
Unsecured loans from a bank due on May 27, 2021
Unsecured loans from a bank due on May 27, 2021
Unsecured loans from banks due on July 26, 2021
Unsecured loans from a bank due on August 26, 2021
Unsecured loans from banks due on August 26, 2021
Unsecured loans from a bank due on November 26, 2021 (Note 2)
Unsecured loans from banks due on November 26, 2021 (Note 2)
Unsecured loans from banks due on November 26, 2021 (Note 2)
Unsecured loans from banks due on December 27, 2021 (Note 2)
Unsecured loans from a bank due on January 26, 2022 (Note 2)
Unsecured loans from banks due on February 28, 2022 (Note 2)
Unsecured loans from a bank due on February 28, 2022 (Note 2)
Unsecured loans from banks due on February 28, 2022 (Note 2)
Unsecured loans from banks due on May 26, 2022 (Note 2)
Unsecured loans from banks due on May 31, 2022 (Note 2)
Unsecured loans from banks due on June 27, 2022 (Note 2)
Unsecured loans from banks due on August 26, 2022 (Note 2)
Unsecured loans from a bank due on August 26, 2022 (Note 2)
Unsecured loans from banks due on August 26, 2022 (Note 2)
Unsecured loans from a bank due on August 26, 2022 (Note 2)
Unsecured loans from banks due on September 30, 2022
Unsecured loans from banks due on October 26, 2022

4,670,000
8,000,000
1,000,000
1,000,000
3,500,000
4,180,000
2,700,000
3,600,000
2,000,000
2,000,000
4,900,000
6,375,000
3,500,000
4,500,000
2,750,000
4,000,000
5,500,000
4,500,000
4,000,000
2,980,000
3,000,000
4,000,000
1,000,000
4,000,000
3,000,000

Weightedaverage interest
rate (Note 1)
0.24818%
1.56250%
1.46375%
1.68200%
1.62500%
1.23920%
1.24100%
0.81585%
1.30289%
1.11662%0.97410%0.24818%
1.48300%
1.31850%
1.29600%
1.16000%
1.25900%
0.82500%
0.21818%
1.19700%
1.09133%
1.08034%
0.32886%
0.76250%
0.24818%

Unsecured loans from banks due on November 28, 2022

2,100,000

Unsecured loans from banks due on November 28, 2022
Unsecured loans from a bank due on November 28, 2022
Unsecured loans from banks due on November 28, 2022
Unsecured loans from a bank due on November 28, 2022
Unsecured loans from banks due on November 28, 2022
Unsecured loans from a bank due on February 27, 2023
Unsecured loans from banks due on February 27, 2023
Unsecured loans from banks due on February 28, 2023
Unsecured loans from a bank due on May 26, 2023
Unsecured loans from a bank due on May 26, 2023
Unsecured loans from a bank due on May 26, 2023
Unsecured loans from a bank due on May 26, 2023
Unsecured loans from a bank due on May 26, 2023
Unsecured loans from a bank due on August 28, 2023
Unsecured loans from a bank due on August 28, 2023
Unsecured loans from a bank due on August 28, 2023
Unsecured loans from a bank due on August 28, 2023
Unsecured loans from banks due on August 28, 2023
Unsecured loans from a bank due on August 28, 2023
Unsecured loans from a bank due on August 28, 2023

4,550,000
1,800,000
1,500,000
1,000,000
1,500,000
1,300,000
2,800,000
10,000,000
2,000,000
2,000,000
1,000,000
1,000,000
2,500,000
1,000,000
1,000,000
1,000,000
4,000,000
6,100,000
1,000,000
1,000,000

Amount(Thousands of Yen)

41 Nomura Real Estate Master Fund, Inc.

As of August 31, 2021

—
—
—
—
—
—
—
—
2,000,000
2,000,000
4,900,000
6,375,000
3,500,000
4,500,000
2,750,000
4,000,000
5,500,000
4,500,000
4,000,000
2,980,000
3,000,000
4,000,000
1,000,000
4,000,000
3,000,000

Weightedaverage interest
rate (Note 1)
—
—
—
—
—
—
—
—
1.30289%
1.11662%0.97410%0.25545%
1.48300%
1.31850%
1.29600%
1.16000%
1.25900%
0.82500%
0.22545%
1.19700%
1.09133%
1.08034%
0.32886%
0.76250%0.25545%0.92280%

2,100,000

0.92280%

1.11000%
1.05000%
0.98624%0.71221%0.69250%
1.13250%0.40740%0.48700%
1.86500%
1.89500%
1.83875%
0.41250%0.43408%
1.14850%
1.15850%
1.18032%
1.20772%
1.08510%0.43466%
0.41000%

4,550,000
1,800,000
1,500,000
1,000,000
1,500,000
1,300,000
2,800,000
10,000,000
2,000,000
2,000,000
1,000,000
1,000,000
2,500,000
1,000,000
1,000,000
1,000,000
4,000,000
6,100,000
1,000,000
1,000,000

1.11000%
1.05000%
0.98624%0.71221%0.69250%
1.13250%0.40740%0.48700%
1.86500%
1.89500%
1.83875%
0.41250%0.43408%
1.14850%
1.15850%
1.18032%
1.20772%
1.08510%0.43466%
0.41000%

Amount(Thousands of Yen)

Unsecured loans from a bank due on August 28, 2023
Unsecured loans from banks due on August 31, 2023
Unsecured loans from banks due on September 26, 2023
Unsecured loans from banks due on November 27, 2023
Unsecured loans from banks due on November 27, 2023
Unsecured loans from banks due on November 27, 2023
Unsecured loans from banks due on November 27, 2023
Unsecured loans from banks due on November 27, 2023
Unsecured loans from a bank due on February 26, 2024
Unsecured loans from banks due on February 26, 2024
Unsecured loans from a bank due on February 26, 2024
Unsecured loans from a bank due on February 26, 2024
Unsecured loans from banks due on February 26, 2024
Unsecured loans from banks due on May 27, 2024
Unsecured loans from a bank due on May 27, 2024
Unsecured loans from a bank due on May 27, 2024
Unsecured loans from a bank due on June 26, 2024
Unsecured loans from a bank due on June 26, 2024
Unsecured loans from a bank due on August 26, 2024
Unsecured loans from a bank due on August 26, 2024
Unsecured loans from banks due on August 26, 2024
Unsecured loans from a bank due on August 26, 2024
Unsecured loans from a bank due on November 26, 2024
Unsecured loans from banks due on November 26, 2024
Unsecured loans from a bank due on November 26, 2024
Unsecured loans from a bank due on November 26, 2024
Unsecured loans from banks due on November 26, 2024
Unsecured loans from a bank due on November 26, 2024
Unsecured loans from banks due on February 26, 2025
Unsecured loans from a bank due on February 26, 2025
Unsecured loans from banks due on February 26, 2025
Unsecured loans from banks due on February 26, 2025
Unsecured loans from banks due on February 26, 2025
Unsecured loans from a bank due on May 26, 2025
Unsecured loans from a bank due on May 26, 2025
Unsecured loans from banks due on May 26, 2025
Unsecured loans from a bank due on May 26, 2025
Unsecured loans from a bank due on May 26, 2025
Unsecured loans from banks due on May 26, 2025
Unsecured loans from a bank due on May 26, 2025
Unsecured loans from banks due on August 26, 2025
Unsecured loans from banks due on August 26, 2025
Unsecured loans from banks due on August 26, 2025
Unsecured loans from banks due on August 26, 2025
Unsecured loans from banks due on August 26, 2025
Unsecured loans from a bank due on November 26, 2025
Unsecured loans from a bank due on November 26, 2025
Unsecured loans from a bank due on November 26, 2025
Unsecured loans from a bank due on November 26, 2025
Unsecured loans from a bank due on November 26, 2025

500,000
6,700,000
3,000,000
2,000,000
2,600,000
4,000,000
1,500,000
1,230,000
2,750,000
1,300,000
500,000
1,000,000—
1,100,000
2,700,000
2,000,000
2,700,000
2,700,000
3,000,000
2,430,000
5,670,000
1,000,000
2,250,000
3,000,000
1,800,000
500,000
2,000,000
800,000
4,200,000
1,000,000
3,000,000
1,500,000
1,000,000
2,000,000
2,000,000
2,800,000
1,000,000
1,000,000
2,000,000
1,000,000
3,000,000
4,050,000
1,850,000
2,600,000
3,000,000
1,100,000
1,100,000
2,000,000
2,000,000
2,000,000

Weightedaverage interest
rate (Note 1)
0.41435%
0.55700%
0.24818%
1.75900%
0.82800%
0.49380%0.47483%0.24818%
1.59400%
0.53630%0.24000%
0.18500%—
0.51000%
0.46376%
0.53676%
0.85925%
0.49533%
0.58175%
0.49971%0.49485%0.28624%
0.50825%0.58000%
0.55979%
0.52384%
0.42630%
0.21380%0.62675%
0.52140%0.53936%0.53880%
0.50604%
0.60286%
0.60286%
0.60286%
0.61434%
0.50506%
0.46301%
0.19750%
0.56380%0.58727%
0.67915%0.60489%
0.58380%
1.09830%
1.06250%
1.03955%
0.59639%0.60448%

As of August 31, 2021
Amount(Thousands of Yen)

500,000
6,700,000
3,000,000
2,000,000
2,600,000
4,000,000
1,500,000
1,230,000
2,750,000
1,300,000
500,000
1,000,000
4,670,000
1,100,000
2,700,000
2,000,000
2,700,000
2,700,000
3,000,000
2,430,000
5,670,000
1,000,000
2,250,000
3,000,000
1,800,000
500,000
2,000,000
800,000
4,200,000
1,000,000
3,000,000
1,500,000
1,000,000
2,000,000
2,000,000
2,800,000
1,000,000
1,000,000
2,000,000
1,000,000
3,000,000
4,050,000
1,850,000
2,600,000
3,000,000
1,100,000
1,100,000
2,000,000
2,000,000
2,000,000

Weightedaverage interest
rate (Note 1)
0.41435%
0.55700%
0.25545%1.75900%
0.82800%
0.49380%0.47483%0.25545%1.59400%
0.53630%0.24000%
0.18500%
0.25545%0.51000%
0.46376%
0.53676%
0.85925%
0.49533%
0.58175%
0.49971%0.49485%0.28624%
0.50825%0.58000%
0.55979%
0.52384%
0.42630%
0.21380%0.62675%
0.52140%0.53936%0.53880%
0.50604%
0.60286%
0.60286%
0.60286%
0.61434%
0.50506%
0.46301%
0.19750%
0.56380%0.58727%
0.67915%0.60489%
0.58380%
1.09830%
1.06250%
1.03955%
0.59639%0.60448%

Nomura Real Estate Master Fund, Inc. 42

Message from the Management

Management Strategy

ESG Measures

Financing Status

Portfolio

Investor Information

Financial Section

NOTES TO FINANCIAL STATEMENTS
As of February 28, 2021
Weightedaverage interest
rate (Note 1)
4,200,000
0.64616%

Amount(Thousands of Yen)

Unsecured loans from banks due on November 26, 2025

As of August 31, 2021
Weightedaverage interest
rate (Note 1)
4,200,000
0.64616%

AmountAmount(Thousands of Yen)

Unsecured loans from a bank due on November 26, 2025

900,000

0.65123%900,000

0.65123%

Unsecured loans from a bank due on November 26, 2025
Unsecured loans from a bank due on November 26, 2025
Unsecured loans from a bank due on November 26, 2025
Unsecured loans from banks due on February 26, 2026
Unsecured loans from banks due on February 26, 2026
Unsecured loans from banks due on February 26, 2026
Unsecured loans from a bank due on February 26, 2026
Unsecured loans from banks due on February 26, 2026
Unsecured loans from a bank due on February 26, 2026
Unsecured loans from a bank due on May 26, 2026
Unsecured loans from a bank due on May 26, 2026
Unsecured loans from banks due on May 26, 2026
Unsecured loans from a bank due on May 26, 2026
Unsecured loans from a bank due on May 26, 2026
Unsecured loans from a bank due on May 26, 2026
Unsecured loans from a bank due on August 26, 2026
Unsecured loans from a bank due on August 26, 2026
Unsecured loans from banks due on August 26, 2026
Unsecured loans from a bank due on August 26, 2026
Unsecured loans from banks due on August 26, 2026
Unsecured loans from a bank due on August 26, 2026
Unsecured loans from a bank due on August 26, 2026
Unsecured loans from a bank due on August 26, 2026
Unsecured loans from banks due on August 26, 2026
Unsecured loans from a bank due on August 26, 2026
Unsecured loans from a bank due on November 26, 2026
Unsecured loans from a bank due on November 26, 2026
Unsecured loans from banks due on November 26, 2026
Unsecured loans from banks due on November 26, 2026
Unsecured loans from banks due on November 26, 2026
Unsecured loans from banks due on November 26, 2026
Unsecured loans from banks due on November 26, 2026
Unsecured loans from banks due on November 26, 2026
Unsecured loans from banks due on February 26, 2027
Unsecured loans from banks due on February 26, 2027
Unsecured loans from a bank due on February 26, 2027
Unsecured loans from banks due on February 26, 2027
Unsecured loans from a bank due on February 26, 2027
Unsecured loans from a bank due on February 26, 2027
Unsecured loans from a bank due on February 26, 2027
Unsecured loans from a bank due on February 26, 2027
Unsecured loans from a bank due on February 26, 2027
Unsecured loans from a bank due on February 26, 2027
Unsecured loans from banks due on March 26, 2027
Unsecured loans from banks due on May 26, 2027
Unsecured loans from banks due on May 26, 2027
Unsecured loans from a bank due on May 26, 2027

1,300,000
1,000,000
500,000
4,000,000
2,500,000
800,000
500,000
1,500,000—
2,500,000
1,100,000
3,600,000
1,000,000
1,100,000
1,500,000
2,700,000
2,700,000
3,000,000
1,000,000
3,000,000
1,000,000
1,000,000
500,000
1,500,000
1,000,000
2,000,000
2,000,000
4,165,000
4,000,000
1,500,000
2,000,000
1,000,000
1,200,000
2,320,000
1,500,000
500,000
1,000,000
1,500,000
1,000,000
300,000
500,000
500,000—
1,500,000
3,060,000
2,300,000
1,800,000

0.64278%0.59499%
0.56311%0.74080%0.59592%
0.37630%
0.39196%0.17136%—0.63995%
0.65267%
0.60880%0.59614%0.37000%
0.25873%
0.67591%
0.67591%
0.77669%
0.70414%0.67483%0.64500%
0.42118%
0.43627%
0.20880%0.30116%0.76000%
0.74229%0.73506%
0.69956%
0.64999%0.60750%0.28000%
0.30000%
0.71500%
0.46630%
0.44859%
0.48144%0.28500%
0.28500%
0.16205%
0.10094%
0.35139%—0.69068%
0.78177%
0.74736%0.70250%

1,300,000
1,000,000
500,000
4,000,000
2,500,000
800,000
500,000
1,500,000
500,000
2,500,000
1,100,000
3,600,000
1,000,000
1,100,000
1,500,000
2,700,000
2,700,000
3,000,000
1,000,000
3,000,000
1,000,000
1,000,000
500,000
1,500,000
1,000,000
2,000,000
2,000,000
4,165,000
4,000,000
1,500,000
2,000,000
1,000,000
1,200,000
2,320,000
1,500,000
500,000
1,000,000
1,500,000
1,000,000
300,000
500,000
500,000
500,000
1,500,000
3,060,000
2,300,000
1,800,000

0.64278%0.59499%
0.56311%0.74080%0.59592%
0.37630%
0.39196%0.17136%0.21500%
0.63995%
0.65267%
0.60880%0.59614%0.37000%
0.25873%
0.67591%
0.67591%
0.77669%
0.70414%0.67483%0.64500%
0.42118%
0.43627%
0.20880%0.30116%0.76000%
0.74229%0.73506%
0.69956%
0.64999%0.60750%0.28000%
0.30000%
0.71500%
0.46630%
0.44859%
0.48144%0.28500%
0.28500%
0.16205%
0.10094%
0.35139%0.24818%0.69068%
0.78177%
0.74736%0.70250%

43 Nomura Real Estate Master Fund, Inc.

As of February 28, 2021
(Thousands of Yen)

Unsecured loans from a bank due on May 26, 2027
Unsecured loans from banks due on August 26, 2027
Unsecured loans from banks due on August 26, 2027
Unsecured loans from a bank due on August 26, 2027
Unsecured loans from a bank due on August 26, 2027
Unsecured loans from banks due on August 26, 2027
Unsecured loans from a bank due on August 26, 2027
Unsecured loans from a bank due on August 26, 2027
Unsecured loans from a bank due on November 26, 2027
Unsecured loans from banks due on November 26, 2027
Unsecured loans from a bank due on November 26, 2027
Unsecured loans from banks due on November 26, 2027
Unsecured loans from banks due on November 26, 2027
Unsecured loans from banks due on November 26, 2027
Unsecured loans from a bank due on November 26, 2027
Unsecured loans from a bank due on February 28, 2028
Unsecured loans from a bank due on February 28, 2028
Unsecured loans from banks due on February 28, 2028
Unsecured loans from a bank due on February 28, 2028
Unsecured loans from a bank due on February 28, 2028
Unsecured loans from banks due on February 28, 2028
Unsecured loans from banks due on February 28, 2028
Unsecured loans from a bank due on February 28, 2028
Unsecured loans from a bank due on February 28, 2028
Unsecured loans from a bank due on February 28, 2028
Unsecured loans from a bank due on February 28, 2028
Unsecured loans from banks due on May 26, 2028
Unsecured loans from a bank due on May 26, 2028
Unsecured loans from a bank due on May 26, 2028
Unsecured loans from a bank due on May 26, 2028
Unsecured loans from banks due on May 26, 2028
Unsecured loans from a bank due on May 26, 2028
Unsecured loans from banks due on August 28, 2028
Unsecured loans from a bank due on August 28, 2028
Unsecured loans from banks due on August 28, 2028
Unsecured loans from a bank due on August 28, 2028
Unsecured loans from a bank due on August 28, 2028
Unsecured loans from a bank due on August 28, 2028
Unsecured loans from a bank due on August 28, 2028
Unsecured loans from banks due on November 27, 2028
Unsecured loans from banks due on November 27, 2028
Unsecured loans from a bank due on November 27, 2028
Unsecured loans from a bank due on November 27, 2028
Unsecured loans from banks due on February 26, 2029
Unsecured loans from banks due on February 26, 2029
Unsecured loans from a bank due on February 26, 2029
Unsecured loans from a bank due on February 26, 2029
Unsecured loans from a bank due on February 26, 2029
Unsecured loans from a bank due on February 26, 2029
Unsecured loans from a bank due on February 26, 2029

1,400,000
4,000,000
2,600,000
1,000,000
1,000,000
1,500,000
600,000—
2,000,000
5,000,000
1,800,000
1,700,000
2,500,000
1,000,000
750,000
1,000,000
2,355,000
1,500,000
1,800,000
2,650,000
1,500,000
1,000,000
1,000,000
1,000,000
500,000
920,000
5,000,000
2,000,000
1,550,000
500,000
2,000,000
1,400,000
3,600,000
500,000
1,000,000
500,000
500,000
1,000,000
1,260,000
2,000,000
3,000,000
1,800,000
500,000
2,500,000
1,400,000
2,300,000
500,000
3,500,000
500,000
500,000

Weightedaverage interest
rate (Note 1)
0.32000%
0.76843%0.76290%0.74500%
0.51356%0.29000%
0.32630%—
0.89209%
0.79571%0.75050%0.70750%
0.52234%
0.31630%
0.29630%
0.82130%
0.76241%0.78296%
0.79642%0.54205%
0.57365%0.17813%0.41000%
0.41000%
0.39000%
0.30000%
0.79880%0.75922%0.55038%0.54010%0.54750%
0.40500%
0.84750%0.61005%
0.62163%
0.62025%
0.37500%
0.40380%0.45375%
0.81130%
0.59375%
0.50880%
0.39380%0.65880%0.67098%
0.63692%
0.63692%
0.41815%0.37000%
0.49750%

As of August 31, 2021
Amount(Thousands of Yen)

1,400,000
4,000,000
2,600,000
1,000,000
1,000,000
1,500,000
600,000
1,700,000
2,000,000
5,000,000
1,800,000
1,700,000
2,500,000
1,000,000
750,000
1,000,000
2,355,000
1,500,000
1,800,000
2,650,000
1,500,000
1,000,000
1,000,000
1,000,000
500,000
920,000
5,000,000
2,000,000
1,550,000
500,000
2,000,000
1,400,000
3,600,000
500,000
1,000,000
500,000
500,000
1,000,000
1,260,000
2,000,000
3,000,000
1,800,000
500,000
2,500,000
1,400,000
2,300,000
500,000
3,500,000
500,000
500,000

Weightedaverage interest
rate (Note 1)
0.32000%
0.76843%0.76290%0.74500%
0.51356%0.29000%
0.32630%
0.27130%
0.89209%
0.79571%0.75050%0.70750%
0.52234%
0.31630%
0.29630%
0.82130%
0.76241%0.78296%
0.79642%0.54205%
0.57365%0.17813%0.41000%
0.41000%
0.39000%
0.30000%
0.79880%0.75922%0.55038%0.54010%0.54750%
0.40500%
0.84750%0.61005%
0.62163%
0.62025%
0.37500%
0.40380%0.45375%
0.81130%
0.59375%
0.50880%
0.39380%0.65880%0.67098%
0.63692%
0.63692%
0.41815%0.37000%
0.49750%

Nomura Real Estate Master Fund, Inc. 44

Message from the Management

Management Strategy

ESG Measures

Financing Status

Portfolio

Investor Information

Financial Section

NOTES TO FINANCIAL STATEMENTS
As of February 28, 2021
Amount(Thousands of Yen)

Unsecured loans from banks due on May 28, 2029
Unsecured loans from a bank due on May 28, 2029
Unsecured loans from a bank due on May 28, 2029
Unsecured loans from a bank due on May 28, 2029
Unsecured loans from a bank due on May 28, 2029
Unsecured loans from banks due on May 28, 2029
Unsecured loans from banks due on August 27, 2029
Unsecured loans from banks due on August 27, 2029
Unsecured loans from banks due on August 27, 2029
Unsecured loans from banks due on August 27, 2029
Unsecured loans from a bank due on August 27, 2029
Unsecured loans from a bank due on August 27, 2029
Unsecured loans from banks due on August 27, 2029
Unsecured loans from a bank due on August 27, 2029
Unsecured loans from a bank due on November 26, 2029
Unsecured loans from a bank due on November 26, 2029
Unsecured loans from a bank due on November 26, 2029
Unsecured loans from a bank due on November 26, 2029
Unsecured loans from a bank due on November 26, 2029
Unsecured loans from a bank due on November 26, 2029
Unsecured loans from a bank due on November 26, 2029
Unsecured loans from a bank due on November 26, 2029
Unsecured loans from banks due on November 26, 2029
Unsecured loans from banks due on February 26, 2030
Unsecured loans from a bank due on February 26, 2030
Unsecured loans from a bank due on February 26, 2030
Unsecured loans from a bank due on February 26, 2030
Unsecured loans from banks due on February 26, 2030
Unsecured loans from a bank due on February 26, 2030
Unsecured loans from a bank due on February 26, 2030
Unsecured loans from a bank due on February 26, 2030
Unsecured loans from banks due on May 27, 2030
Unsecured loans from a bank due on May 27, 2030
Unsecured loans from a bank due on May 27, 2030
Unsecured loans from a bank due on May 27, 2030
Unsecured loans from a bank due on May 27, 2030
Unsecured loans from a bank due on May 27, 2030
Unsecured loans from a bank due on May 27, 2030
Unsecured loans from banks due on August 26, 2030
Unsecured loans from a bank due on August 26, 2030
Unsecured loans from a bank due on August 26, 2030
Unsecured loans from banks due on August 26, 2030
Unsecured loans from a bank due on August 26, 2030
Unsecured loans from a bank due on August 26, 2030
Unsecured loans from a bank due on October 28, 2030
Unsecured loans from a bank due on October 28, 2030
Unsecured loans from a bank due on November 26, 2030
Unsecured loans from a bank due on November 26, 2030
Unsecured loans from a bank due on November 26, 2030
Unsecured loans from a bank due on November 26, 2030
Unsecured loans from a bank due on February 26, 2031

45 Nomura Real Estate Master Fund, Inc.

5,000,000
800,000
500,000
1,000,000
1,000,000
1,000,000
2,000,000
3,900,000
2,800,000
1,600,000
1,500,000
500,000
1,000,000—
2,000,000
2,000,000
1,200,000
1,000,000
750,000
500,000
2,000,000
750,000
4,000,000
4,250,000
1,500,000
600,000
500,000
1,300,000
1,500,000
1,400,000
1,000,000
7,000,000
800,000
1,000,000
1,000,000
500,000
720,000—
2,000,000
1,100,000
300,000
500,000
1,000,000—
1,100,000
1,100,000
350,000
500,000——
700,000

Weightedaverage interest
rate (Note 1)
0.64000%
0.55190%0.26451%0.45875%
0.44880%
0.38500%
0.46130%
0.46130%
0.55845%
0.48380%
0.48380%
0.46380%0.43880%—
1.12506%
1.12506%
0.59500%
0.59500%
0.48000%
0.59500%
0.50630%
0.47380%0.54904%0.52000%
0.48000%
0.40915%0.34054%0.59482%
0.52446%
0.58630%
0.58630%
0.54630%
0.52630%
0.53250%
0.55988%0.50485%0.59399%—
0.56500%
0.54500%
0.54500%
0.52063%0.46000%—
1.92250%
1.91700%
0.42630%
0.53630%——
0.67750%

As of August 31, 2021
Amount(Thousands of Yen)

5,000,000
800,000
500,000
1,000,000
1,000,000
1,000,000
2,000,000
3,900,000
2,800,000
1,600,000
1,500,000
500,000
1,000,000
1,800,000
2,000,000
2,000,000
1,200,000
1,000,000
750,000
500,000
2,000,000
750,000
4,000,000
4,250,000
1,500,000
600,000
500,000
1,300,000
1,500,000
1,400,000
1,000,000
7,000,000
800,000
1,000,000
1,000,000
500,000
720,000
1,430,000
2,000,000
1,100,000
300,000
500,000
1,000,000
1,000,000
1,100,000
1,100,000
350,000
500,000
2,000,000
1,000,000
700,000

Weightedaverage interest
rate (Note 1)
0.64000%
0.55190%0.26451%0.45875%
0.44880%
0.38500%
0.46130%
0.46130%
0.55845%
0.48380%
0.48380%
0.46380%0.43880%
0.40500%
1.12506%
1.12506%
0.59500%
0.59500%
0.48000%
0.59500%
0.50630%
0.47380%0.54904%0.52000%
0.48000%
0.40915%0.34054%0.59482%
0.52446%
0.58630%
0.58630%
0.54630%
0.52630%
0.53250%
0.55988%0.50485%0.59399%0.45862%
0.56500%
0.54500%
0.54500%
0.52063%0.46000%
0.56068%
1.92250%
1.91700%
0.42630%
0.53630%
0.59763%0.59819%0.67750%

As of February 28, 2021
Amount(Thousands of Yen)

Unsecured loans from a bank due on February 26, 2031
Unsecured loans from banks due on February 26, 2031
Unsecured loans from a bank due on February 26, 2031
Unsecured loans from a bank due on February 26, 2031
Unsecured loans from a bank due on February 26, 2031
Unsecured loans from a bank due on February 26, 2031
Unsecured loans from banks due on May 26, 2031
Unsecured loans from a bank due on May 26, 2031
Unsecured loans from a bank due on May 26, 2025 (Note 3)
Unsecured loans from a bank due on May 26, 2025 (Note 3)
Total

2,000,000
4,000,000
400,000
420,000————
668,300
668,300
485,841,600

Weightedaverage interest
rate (Note 1)
0.67750%0.67750%0.50000%
0.65750%————
2.17000%
2.21812%

As of August 31, 2021
Amount(Thousands of Yen)

2,000,000
4,000,000
400,000
420,000
2,750,000
1,800,000
6,000,000
3,500,000
646,900
646,900
485,798,800

Weightedaverage interest
rate (Note 1)
0.67750%0.67750%0.50000%
0.65750%
0.50226%
0.52198%
0.64130%
0.64242%2.17000%
2.21812%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 forthe borrowings, hedged by interest-rate swaps for the purpose of avoiding interest rate fluctuation risk, the swapped interest rates are used to calculate theweighted-average interest rate.
Note 2:	At the end of the period, these loans are accounted for under current liabilities on the balance sheets as the current portion of long-term borrowings.
Note 3:	Installments of ¥10.7 million will be made on the 26th day of every third month starting on August 26, 2013, with the remaining payment of ¥497.1 million to be
repaid on May 26, 2025.

The scheduled repayment amounts of long-term debt for each of the five years after the balance sheet date are as follows.


Thousands of Yen

As of February 28, 2021
As of August 31, 2021

Within a year
58,760,600
55,090,600

1-2 years
58,615,600
64,435,600

2-3 years
50,765,600
47,935,600

3-4 years
44,435,600
48,387,000

4-5 years
52,694,200
54,100,000

Note 1:	The Company entered into ¥10,000 million of credit facilities in the form of commitment lines with two financial institutions for the fiscal period ended February
28, 2021. The total unused amount of such credit facilities was ¥10,000 million as of February 28, 2021.
Note 2:	The Company entered into ¥40,000 million of credit facilities in the form of commitment lines with four financial institutions for the fiscal period ended February
28, 2021. The total unused amount of such credit facilities was ¥40,000 million as of February 28, 2021.
Note 3:	The Company entered into ¥10,000 million of credit facilities in the form of commitment lines with two financial institutions for the fiscal period ended August
31, 2021. The total unused amount of such credit facilities was ¥10,000 million as of August 31, 2021.
Note 4:	The Company entered into ¥40,000 million of credit facilities in the form of commitment lines with four financial institutions for the fiscal period ended August
31, 2021. The total unused amount of such credit facilities was ¥40,000 million as of August 31, 2021.

Nomura Real Estate Master Fund, Inc. 46

Message from the Management

Management Strategy

ESG Measures

Financing Status

Portfolio

Investor Information

Financial Section

NOTES TO FINANCIAL STATEMENTS
8. INVESTMENT CORPORATION BONDS

10. ALLOWANCE FOR TEMPORARY DIFFERENCE ADJUSTMENTS

Details of investment corporation bonds outstanding are summarized as follows.

The movement in the allowance for temporary difference adjustments on the Balance Sheet was as follows:

As of February 28, 2021
Amount(Thousands of Yen)

Interest rate
(Note 1)

As of August 31, 2021
Amount(Thousands of Yen)

Interest rate
(Note 1)Former NMF's 1st series of unsecured investment corporation bonds due on October 30, 2024

3,000,000

0.87%

3,000,000

0.87%

NOF's 10th series of unsecured investment corporation
bonds due on November 25, 2024

6,000,000

1.02%

6,000,000

1.02%

NMF's 2nd series of unsecured investment corporation
bonds due on November 16, 2027

2,000,000

0.59%

2,000,000

0.59%

NOF's 7th series of unsecured investment corporation
bonds due on March 17, 2028

4,500,000

2.90%

4,500,000

2.90%

3,000,000

0.53%

3,000,000

0.53%

7,000,000

0.54%

7,000,000

0.54%

1,500,000

1.03%

1,500,000

1.03%

5,000,000

0.90%

5,000,000

0.90%

NMF's 4th series of unsecured investment corporation
bonds due on September 20, 2029 (green bonds)
NMF's 6th series of unsecured investment corporation
bonds due on August 14, 2030 (green bonds)
NMF's 3rd series of unsecured investment corporation
bonds due on May 21, 2038
NMF's 5th series of unsecured investment corporation
bonds due on September 20, 2039

32,000,000

32,000,000

Note 1: The interest rate is rounded to the nearest second decimal place.

The scheduled redemption amounts of investment corporation bonds for each of the five years after the balance sheet date areas follows.


For the period from September 1, 2020 to February 28, 2021
1. Reason, related assets and amounts


Related assets, etc.

Within a year——

1-2 years——

2-3 years——

3-4 years
9,000,000
9,000,000

Amortization of
goodwill
Land, buildings, etc. Merger expenses
Loss oninterest-rate
Deferred gains or
swaps recognized
losses on hedges
at the end of the
fiscal period
Increase - subtotal
Total

NMF 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. NMF is required to maintain net assets of at least ¥50,000 thousand as set
forth in the Investment Trust Act.

InitialamountBalance atAllowance
the end of
set aside
previous
during period
period19,978,097 11,409,812

1,783,145

ReversalduringperiodBalance atthe end ofcurrent
periodReason forreversal— 13,192,958—

4,029,135

1,322,694(5,515)—

1,317,179—

2,867,594

783,330—(299,087)

484,242

Changes in fairvalue of derivative transactions— 13,515,837— 13,515,837

1,777,630
1,777,630(299,087) 14,994,380(299,087) 14,994,380——

2. Method of reversal(1) Amortization of goodwill
In principle, amortization of goodwill is not reversed.
(2) Merger expenses
Item
Buildings, etc.
Land
Buildings in trust, etc.
Land in trust
Leasehold rights
Leasehold rights in trust

4-5 years——

9. UNITHOLDERS’ EQUITY

ReasonGoodwillThousands of Yen

As of February 28, 2021
As of August 31, 2021

Thousands of Yen

Method of reversal
Upon depreciation and sale, etc., the corresponding amount is scheduled to be reversed.
Upon sale, etc., the corresponding amount is scheduled to be reversed.
Upon depreciation or sale, etc., the corresponding amount is scheduled to be reversed.
Upon sale, etc., the corresponding amount is scheduled to be reversed.

(3) Deferred gains or losses on hedges
Based on changes in the fair value of derivatives used as hedging instruments, the corresponding amount is scheduled to bereversed.
For the period from March 1, 2021 to August 31, 2021
1. Reason, related assets and amountsThousands of Yen

Related assets, etc.

ReasonAmortization of
goodwill
Land, buildings, etc. Merger expenses
Loss oninterest-rate
Deferred gains or
swaps recognized
losses on hedges
at the end of the
fiscal period
Increase - subtotal
Total
Goodwill

47 Nomura Real Estate Master Fund, Inc.

InitialamountBalance atAllowance
the end of
set aside
previous
during period
period

22,600,340 13,192,958

1,769,017

ReversalduringperiodBalance atthe end ofcurrent
periodReason forreversal— 14,961,976—

4,029,135

1,317,179(5,533)—

1,311,646—

2,867,594

484,242—(132,888)

351,354

Changes in fairvalue of derivative transactions— 14,994,380— 14,994,380

1,763,484
1,763,484(132,888) 16,624,976(132,888) 16,624,976——

Nomura Real Estate Master Fund, Inc. 48

Message from the Management

Management Strategy

ESG Measures

Financing Status

Portfolio

Investor Information

Financial Section

NOTES TO FINANCIAL STATEMENTS
13. INCOME TAXES

2. Method of reversal(1) Amortization of goodwill
In principle, amortization of goodwill is not reversed.
(2) Merger expenses
Item
Buildings, etc.
Land
Buildings in trust, etc.
Land in trust
Leasehold rights
Leasehold rights in trust

Method of reversal
Upon depreciation and sale, etc., the corresponding amount is scheduled to be reversed.
Upon sale, etc., the corresponding amount is scheduled to be reversed.
Upon depreciation or sale, etc., the corresponding amount is scheduled to be reversed.

Since the Company distributed in excess of 90% of its distributable income in the form of cash distributions totaling¥15,503,577 thousand for the fiscal period ended August 31, 2021 such distributions were treated as deductible distributions
for purposes of corporate income taxes.

Upon sale, etc., the corresponding amount is scheduled to be reversed.

(3) Deferred gains or losses on hedges
Based on changes in the fair value of derivatives used as hedging instruments, the corresponding amount is scheduled to bereversed.

11. PER UNIT INFORMATIONThe net asset values per unit and the net income per unit as of February 28, 2021 and August 31, 2021 were as follows:
For the period
from September 1, 2020
to February 28, 2021
Net assets per unit
Net income per unit

For the period
from March 1, 2021
to August 31, 2021

132,1292,760

131,468
2,637

Note 1: The net income per unit is calculated by dividing net income by the weighted-average number of units outstanding.
Note 2: The basis for calculating net income per unit is as follows.

For the period
from September 1, 2020
to February 28, 2021
Net income (Thousands of Yen)
Amount not available to ordinary unitholders (Thousands of Yen)
Net income available to ordinary unitholders (Thousands of Yen)
Average number of units during the period (Units)

For the period
from March 1, 2021
to August 31, 2021

13,016,610—
13,016,610
4,715,200

12. RELATED PARTY TRANSACTIONS
For the periods from September 1, 2020 to February 28, 2021 and from March 1, 2021 to August 31, 2021
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

The Company, as an investment corporation, is subject to corporate income taxes at a statutory tax rate of approximately
31.46% for the fiscal period ended August 31, 2021. 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.

12,434,161—
12,434,161
4,715,200

The following summarizes breakdown of deferred tax assets and liabilities:

Thousands of Yen

For the period
from September 1, 2020
to February 28, 2021
Deferred tax asset:
Valuation difference on other assets acquired by merger
Deferred gains or losses on hedges
Unearned revenue
Write-offs for long-term prepaid expenses
Depreciation costs of trust leasehold rights
Non-deductible accrued enterprise tax
		Subtotal		Valuation allowance
		 Total non-current deferred tax assets
Total deferred tax assets
Net deferred tax assets

For the period
from March 1, 2021
to August 31, 2021

19,717,747
110,536
40,685
3,237
1,702
22
19,873,932(19,873,932)———

19,486,187
62,081
23,623991
1,824
27
19,574,735(19,574,735)———

The following summarizes the significant differences between the statutory tax rate and the effective tax rate.
For the period
from September 1, 2020
to February 28, 2021
Statutory tax rate
Deductible cash distributions
Valuation of allowance
Amortization of goodwill
Other
Effective tax rate

31.46%(35.72%)(2.07%)
6.34%
0.00%
0.01%

For the period
from March 1, 2021
to August 31, 2021
31.46%(36.07%)(2.02%)
6.63%
0.00%
0.01%

14. FINANCIAL INSTRUMENTS
Overview(1) Policy for Financial Instruments
Upon acquisition of property-related assets, the Company may raise funds through certain financing methods including
borrowings, issuance of investment corporation bonds and issuance of investment units. In financing through interest-bearing debt, to secure stable financing capability and reduce future risks of rising interest rates, the Company’s investment
policy is to secure longer-term, fixed-rate borrowings with well-diversified maturities.
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
Borrowings and investment corporation bonds are primarily used to fund the acquisition of property-related assets as well as
the repayment of debts and redemption of investment corporation bonds. The Company is exposed to liquidity risk of being

49 Nomura Real Estate Master Fund, Inc.

Nomura Real Estate Master Fund, Inc. 50

Message from the Management

Management Strategy

ESG Measures

Financing Status

Portfolio

Investor Information

Financial Section

NOTES TO FINANCIAL STATEMENTS
unable to meet its obligations on scheduled due dates. The Company controls and limits such risk by diversifying not only thefinancial institutions, but also the type of financing to include the effective use of surplus funds and direct financing from thecapital markets such as issuance of investment units. In addition, the Company is exposed to the market risk arising fromfluctuations in interest rates on its floating-rate debt. However, the effect of such risk on the operation of the Company islimited by maintaining the LTV ratio at low levels and the ratio of long-term fixed-rate debt to total debt at high levels.
Furthermore, the Company may utilize derivative transactions (interest-rate swap transactions) as a hedging instrument to
reduce the market risk under floating-rate debt by swapping such floating-rate interest payments for fixed-rate interest
payments.

Note 3: Redemption schedule for cash and bank deposits as of February 28, 2021

Cash and bank deposits
Total

Total

(i) Cash and bank deposits(ii) Current portion of long-term debt(iii) Investment corporation bonds(iv) Long-term debt(v) Derivative transactions

The following table summarizes the carrying value and the estimated fair values of financial instruments as of August 31, 2021.
Thousands of Yen(i) Cash and bank deposits(ii) Current portion of long-term debt(iii) Investment corporation bonds(iv) Long-term debt(v) Derivative transactions

Carrying value (Note 1)
63,111,539(55,090,600)(32,000,000)(430,708,200)(199,516)

Fair value (Note 1)
63,111,539(55,268,046)(32,632,833)(437,372,030)(199,516)

Difference—
177,446
632,833
6,663,830—

Note 1: The numbers in parenthesis indicate liabilities.
Note 2: Method for determining the fair value of financial instruments and derivative transactions
		(i) Cash and bank deposits			As these items are settled within a short-term period, their fair value is nearly equal to the carrying value. Therefore, for these items, the carrying value isreported as the fair value.
		(ii) Current portion of long-term debt and(iv)Long-term debt
			For floating-rate long-term debt, the carrying value is reported as it is considered to be approximately equal to the fair value because such debt reflects themarket interest rates within a short-term period. (However, the fair value of certain floating-rate long-term debt that qualifies for the special treatment ofinterest-rate swaps (see “21. 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 isdetermined by discounting the sum of its principal and interest payments at a rate reasonably estimated to be applicable to similar fixed-rate debt.
		(iii) Investment corporation bonds
			 The fair value of investment corporation bonds issued by the Company is determined based on their market prices.
		(v) Derivative transactions
			 See “21. Derivatives and Hedge Accounting.”

51 Nomura Real Estate Master Fund, Inc.

—

—

—

After two years,
After three years, After four years,
within three
After five years
within four years within five years
years

Due within
one year

After one year,
within two years

63,111,539

—

—

—

—

—

63,111,539

—

—

—

—

—

After one year,
within two years

After two years,
After three years, After four years,
within three
After five years
within four years within five years
years

—

—

—

9,000,000—

23,000,000

58,760,600

58,615,600

50,765,600

44,435,600

52,694,200

220,570,000

58,760,600

58,615,600

50,765,600

53,435,600

52,694,200

243,570,000

Redemption schedule for debt as of August 31, 2021

—137,234
76,8275,220,445—

For the period from March 1, 2021 to August 31, 2021——

Thousands of Yen

Total

Thousands of Yen

Difference——

Due within
one year

The following table summarizes the carrying value and the estimated fair values of financial instruments as of February 28, 2021.
Fair value
63,840,679(58,897,834)(32,076,827)(432,301,445)(352,590)——

Long-term debt

Carrying value
63,840,679(58,760,600)(32,000,000)(427,081,000)(352,590)—

63,840,679

Note 4: Redemption schedule for debt as of February 28, 2021

Investment corporation bonds(Note 1)

63,840,679

Thousands of Yen

Cash and bank deposits

For the period from September 1, 2020 to February 28, 2021

(Note 1)After one year,
within two years

Redemption schedule for cash and bank deposits as of August 31, 2021

Fair Value of Financial InstrumentsAfter two years,
After three years, After four years,
within three
After five years
within four years within five years
years

Due within
one year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 of derivative transactions stated in “21. Derivatives and Hedge Accounting” below do not represent the market risk involved in thesederivative transactions.

Thousands of Yen

Thousands of Yen

Due within
one yearInvestment corporation bonds
Long-term debt
Total

After one year,
within two years

After two years,
After three years, After four years,
within three
After five years
within four years within five years
years

—

—

—

9,000,000—

23,000,000

55,090,600

64,435,600

47,935,600

48,387,000

54,100,000

215,850,000

55,090,600

64,435,600

47,935,600

57,387,000

54,100,000

238,850,000

15. INVESTMENT AND RENTAL PROPERTIESThe Company owns leasable office, leasable retail facilities, leasable logistics facilities, leasable residential (including land) inGreater Tokyo area and other areas for the purpose of earning revenue from leasing. The following table summarizes the carrying value and the estimated fair value of these properties.


Thousands of Yen

For the period
from September 1, 2020
to February 28, 2021
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

1,035,946,025
12,971,818
1,048,917,843
1,205,558,000

For the period
from March 1, 2021
to August 31, 2021
1,048,917,843(215,834)
1,048,702,009
1,218,347,000

Note 1: The carrying value represents the acquisition cost less accumulated depreciation.
Note 2: O f the change in investment and rental properties, the increase during the previous period is mainly attributable to the acquisition of Landport Ome II(¥14,888,784 thousand). The decrease during the previous period is mainly attributable to the partial sale of Mitsubishi Motors Katsushika (a part of the landarea) (¥37,695 thousand) as well as depreciation expenses (¥5,474,834 thousand). The increase during the current period is mainly attributable to the acquisitionof Universal CityWalk Osaka (Land) (¥2,178,530 thousand). The decrease during the current period is mainly attributable to depreciation expenses(¥5,578,207
thousand).
Note 3: Fair value at the end of the period is the appraisal value or survey price determined by an outside real estate appraiser.

The real estate rental revenues and expenses for the fiscal period ended August 31, 2021 are presented in “17. Breakdown ofReal Estate Rental Revenues and Expenses.”

Nomura Real Estate Master Fund, Inc. 52

Message from the Management

Management Strategy

ESG Measures

Financing Status

Portfolio

Investor Information

Financial Section

NOTES TO FINANCIAL STATEMENTS
16. SEGMENT INFORMATION

18. BREAKDOWN OF GAIN AND LOSS ON SALES OF REAL ESTATE

For the periods from September 1, 2020 to February 28, 2021 and from March 1, 2021 to August 31, 2021
Segment Information

For the period from September 1, 2020 to February 28, 2021

Since the Company has been engaged in the real estate leasing business as a single segment, segment information has been omitted.

Mitsubishi Motors Katsushika(a part of the land area)
Proceeds from sales of real estate
Cost of sales of real estate
Other related sales expenses
Loss on sales of real estate

Thousands of Yen

Related Information
1. Information about products and services
Since revenues from external customers for products and services within a single segment are more than 90 percent of
total operating revenues, information about products and services has been omitted.
2. Information about geographical areas(1) Revenues
Since more than 90 percent of the total operating revenues were generated from external customers in Japan, a 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, a geographicalbreakdown of property and equipment has been omitted.

For the period from September 1, 2020 to February 28, 2021

For the period from March 1, 2021 to August 31, 2021
Not applicable.

19. BREAKDOWN OF EXTRAORDINARY LOSS
For the period from September 1, 2020 to February 28, 2021

For the period from March 1, 2021 to August 31, 2021

Revenues (Thousands of Yen)
5,312,679

Related segment nameRental real estate business

For the period from March 1, 2021 to August 31, 2021
Customer name
Nomura Real Estate Partners Co., Ltd.

6,245

Losses related to assets damaged by the 2021 Fukushima Earthquake totaling ¥31,000 thousand are recorded as loss on
disaster.

3. Information about major clients

Customer name
Nomura Real Estate Partners Co., Ltd.

35,012
37,695
3,562

Not applicable

20. LEASESRevenues (Thousands of Yen)
5,373,430

Related segment nameRental real estate business

The future minimum rental revenues from tenants under non-cancelable operating leases of properties as of February 28, 2021
and August 31, 2021 are summarized as follows:

17. BREAKDOWN OF REAL ESTATE RENTAL REVENUES AND EXPENSES
Real estate rental revenues and expenses for the fiscal periods ended February 28, 2021 and August 31, 2021 consist of the following:

Thousands of Yen

For the period
from September 1, 2020
to February 28, 2021
Real estate rental revenues
Rental revenues
		Rental revenues
		 Common area charges
Other rental revenues
		Parking revenues
		Incidental income
		 Other miscellaneous revenues
Real estate rental expenses
		 Property management costs
		 Property management fees
		 Property and other taxes
		Utility expenses
		Casualty insurance		 Repairs and maintenance		Land rents
		Depreciation
		 Other rental expenses
Real estate rental profits

53 Nomura Real Estate Master Fund, Inc.

38,064,606
35,172,568
32,764,268
2,408,300
2,892,037
631,536
1,987,428
273,072
15,973,489
1,837,680
1,013,518
3,110,231
1,561,738
44,5761,510,977
206,564
5,482,712
1,205,488
22,091,116

For the period
from March 1, 2021
to August 31, 2021
37,519,267
34,679,385
32,344,406
2,334,9782,839,881
622,960
1,806,838
410,082
16,097,387
1,832,875
975,826
3,263,841
1,431,766
54,1101,531,578
201,748
5,586,593
1,219,046
21,421,880

Thousands of Yen

As of February 28, 2021

As of August 31, 2021

36,123,509
76,658,145
112,781,654

34,049,489
74,520,472
108,569,961

Due within one year
Due after one year
Total

21. DERIVATIVES AND HEDGE ACCOUNTING
Derivative transactions as of February 28, 2021
(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
methodPrincipal treatment
methodSpecial treatment ofinterest-rate swaps
Total

Type of derivative
instruments
Interest-rate swaps:
Received/floating andpaid/fixedInterest-rate swaps:
Received/floating andpaid/fixed

Main hedged
itemLong-term debt

Notional amount(Note 1)

Fair value (Note 2)

Due after one year
70,210,000

41,830,000(352,590)(Note 3)Long-term debt

42,868,300

34,825,500(518,329)(Note 4)

113,078,300

76,655,500(870,920)

Note 1: Contract amount is based on notional amount.
Note 2: Fair value is measured by swap counterparty, based on the actual market interest rate, etc.
Note 3: Out of the fair value, (¥1,236 thousand) is booked as “accrued expenses” on the Balance Sheet.
Note 4: Out of the fair value, (¥518,329 thousand) is not marked to market on the Balance Sheet, since adopting special treatment for interest-rate swaps.

Nomura Real Estate Master Fund, Inc. 54

Message from the Management

Management Strategy

ESG Measures

Financing Status

Portfolio

Investor Information

Financial Section

NOTES TO FINANCIAL STATEMENTS
Derivative transactions as of August 31, 2021

23. INFORMATION ON ALLOWANCE FOR TEMPORARY DIFFERENCE ADJUSTMENTS(1) There were no derivative financial instruments not subject to hedge accounting.

For the period from September 1, 2020 to February 28, 2021

(2) Derivative financial instruments subject to hedge accounting were as follows:

Thousands of Yen

Hedge accounting
methodPrincipal treatment
methodSpecial treatment ofinterest-rate swaps

Type of derivative
instruments
Interest-rate swaps:
Received/floating andpaid/fixedInterest-rate swaps:
Received/floating andpaid/fixed

Main hedged
itemLong-term debt

Total



Thousands of Yen

Notional amount(Note 1)

Related assets, etc.

Fair value (Note 2)

Reason for provision

Due after one year
58,730,000

34,350,000(199,516)(Note 3)Long-term debt

1. Reason for provision, related assets and amounts

34,846,900

29,304,100(531,285)(Note 4)

93,576,900

63,654,100(730,802)Note 1: Contract amount is based on notional amount.
Note 2: Fair value is measured by swap counterparty, based on the actual market interest rate, etc.
Note 3: Out of the fair value, (¥2,184 thousand) is booked as “accrued expenses” on the Balance Sheet.
Note 4: Out of the fair value, (¥531,285 thousand) is not marked to market on the Balance Sheet, since adopting special treatment for interest-rate swaps.

Goodwill
Long-term deposits
Increase-subtotal
Buildings, facilities, etc.
Unearned revenue
Land
OthersDecrease-subtotal
Total

Amortization of goodwill
Shortfall of reserve for repairs
Depreciation deficiency equivalent
Write-down of loss on interest-rate swap due to merger
Cost of sales of land—

Provision of allowancefor temporary difference
adjustments
2,622,242
6,013
2,628,256(792,086)(57,573)(134)(14,976)(864,771)
1,763,484

2. Reason for reversal, related assets and amounts


22. CASH DISTRIBUTIONSYenFor the period
from September 1, 2020
to February 28, 2021

For the period
from March 1, 2021
to August 31, 2021

1. Retained earnings at end of period

13,503,646,955

12,786,253,162

2. Distributions in excess of retained earnings
		 Of which, allowance for temporary difference adjustment
		 Of which, other distributions in excess of net income

2,682,948,800
1,763,484,800
919,464,000

3,069,595,200
1,824,782,400
1,244,812,800

3. Incorporation into unitholders’ capital		 Of which, reversal of allowance for temporary difference adjustments

132,888,372
132,888,372

154,021,761
154,021,761

4. Distributions
		 [Distributions (per unit)]		 Of which, distributions of earnings
		 [Of which, distributions of earnings (per unit)]		 Of which, allowance for temporary difference adjustments		 [Of which, allowance for temporary difference adjustments (per unit)]		 Of which, other distributions in excess of net income
		 [Of which, other distributions in excess of net income (per unit)]

15,701,616,000(3,330)13,018,667,200(2,761)
1,763,484,800(374)
919,464,000(195)

15,503,577,600(3,288)12,433,982,400(2,637)
1,824,782,400(387)
1,244,812,800(264)

352,091,383

198,249,001

Thousands of Yen

Related assets, etc.

Reason for reversal

Sale and depreciation of properties for which merger
expenses were recorded
Deferred gains or losses on hedges Changes in fair value of derivatives
Total
Land, buildings, etc.

Provision of allowancefor temporary difference
adjustments—(Note 1)(132,888)(132,888)

Note 1: The amount of reversal during the current fiscal period (¥5,533 thousand) is included in “Depreciation deficiency equivalent” on “1. Reasons for provision,
related assets and amounts.”

3. Method of reversal(1) Amortization of goodwill
In principle, amortization of goodwill is not reversed.
(2) Merger expenses

5. Retained earnings carried forward
Calculation method of distribution amount

NMF calculates distributions in accordance with the cash distribution policies as specified in Article 36, Paragraphs 1 and 2 of
NMF’s Articles of Incorporation.

Item
Buildings, etc.
Land
Buildings in trust, etc.
Land in trust, etc.
Leasehold
Leasehold in trust

Method of reversal
Upon depreciation or sale, the corresponding amount is scheduled to be reversed.
Upon sale, the corresponding amount is scheduled to be reversed.
Upon depreciation or sale, the corresponding amount is scheduled to be reversed.
Upon sale, the corresponding amount is scheduled to be reversed.

(3) Long-term deposits
In principle, long-term deposits are not reserved.
(4) Deferred gains or losses on hedges
The amount corresponding to changes in the fair value of derivatives used as hedging instruments is scheduled to bereversed.

For the fiscal period under review, NMF decided to implement a total of ¥15,503,577,600 in distributions (¥3,288 per investmentunit). This figure was arrived at by adding to ¥12,434,161,779 in net income after taxes ¥2,622,242,820 in amortization of goodwill, and by adding ¥447,173,001 in consideration of temporary decrease in operating revenues due to the impact of COVID-19
pandemic on per-unit distribution.
Total distributions comprise distribution of earnings and distribution in excess of net income. Distribution of earnings as stipulated in Article 136, Paragraph 1 of the Investment Trusts Act came to ¥12,433,982,400 (¥2,637 per investment unit).
Distribution in excess of net income comprises a distribution of ¥1,824,782,400 (¥387 per investment unit) as allowance fortemporary difference adjustment and ¥1,244,812,800 (¥264 per investment unit) in other distribution in excess of net income.

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Message from the Management

Management Strategy

ESG Measures

Financing Status

Portfolio

Investor Information

Financial Section

NOTES TO FINANCIAL STATEMENTS
24. SIGNIFICANT SUBSEQUENT EVENTSFor the period from March 1, 2021 to August 31, 2021
1. Reason for provision, related assets and amountsThousands of Yen

Related assets, etc.

Reason for provision

Goodwill
Long-term deposits
Increase-subtotal
Buildings, facilities, etc.

Amortization of goodwill
Shortfall of reserve for repairs

Unearned revenue

Write-down of loss on interest-rate swap due to merger—

OthersDecrease-subtotal
Total

Depreciation deficiency equivalent

Provision of allowancefor temporary difference
adjustments
2,622,242
7,161
2,629,404(741,188)(54,234)(9,199)(804,622)
1,824,782

Asset Sales
NMF sold the following asset subsequent to the 12th fiscal period (August 31, 2021).
(1) NMF Utsunomiya Building
Type of asset Trust beneficiary interest in mainly real estate
Use: Office
Scheduled contract date: October 14, 2021
Scheduled transfer date: October 29, 2021
Scheduled transfer price: ¥2,720 million
Buyer: A domestic corporation
Impact on 13th fiscal period earnings (Scheduled): ¥162 million
The impact of (1), above, on earnings for the 13th fiscal period (September 1, 2021 to February 28, 2022) will be recorded asgain on sales of real estate under operating revenues.

2. Reason for reversal, related assets and amountsThousands of Yen

Related assets, etc.

Reason for reversal

Sale and depreciation of properties for which merger
expenses were recorded
Deferred gains or losses on hedges Changes in fair value of derivatives
Total
Land, Buildings, etc.

Provision of allowancefor temporary difference
adjustments—(Note 1)

(154,021)(154,021)

Note 1: The amount of reversal during the current fiscal period (¥5,440 thousand) is included in “Depreciation deficiency equivalent” on “1. Reasons for provision,
related assets and amounts.”

3. Method of reversal(1) Amortization of goodwill
In principle, amortization of goodwill is not reversed.
(2) Merger expenses
Item
Buildings, etc.
Land
Buildings in trust, etc.
Land in trust, etc.
Leasehold
Leasehold in trust

Method of reversal
Upon depreciation or sale, the corresponding amount is scheduled to be reversed.
Upon sale, the corresponding amount is scheduled to be reversed.
Upon depreciation or sale, the corresponding amount is scheduled to be reversed.
Upon sale, the corresponding amount is scheduled to be reversed(3) Long-term deposits
In principle, long-term deposits are not reserved.
(4) Deferred gains or losses on hedges
The amount corresponding to changes in the fair value of derivatives used as hedging instruments is scheduled to be reversed.

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Message from the Management

Management Strategy

ESG Measures

Financing Status

Portfolio

Investor Information

Financial Section

INDEPENDENT AUDITOR’S REPORT

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Message from the Management

Management Strategy

ESG Measures

Financing Status

Portfolio

Investor Information

Financial Section

INDEPENDENT AUDITOR’S REPORT

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