Supplement Documentation for Press Release“Acquisition and Disposition of the Assets” dated today
March 21, 2017

Exchange deal with The Sponsor
Along with acquiring prime properties developed by the sponsor,
selling favorably-located properties to secure future external growth opportunities

Acquisition✔ Acquisition of 4 properties for 16.8 billion yen developedby the sponsor✔ Acquisition of prime properties of various uses (retail, logisticsand residential) from the sponsor

Development
NRE Kichijoji Building（49％）

Landport KashiwaShonanⅠ

PROUD FLAT
Omori ⅢPROUD FLATKinshicho✔ Disposition with right of first refusal after redevelopmentof 3 properties for 14.3 billion yen to the sponsor to secure
future external growth opportunities

Disposition✔ Disposition of Mitsubishi Motors Shibuya(land with leasehold right), and Suginami(land with leasehold right).
Sponsor considering redevelopment as
PROUD FLAT, and store, respectively
NOF Nihonbashi Honcho
Building （51％）

Acquisition✔ Disposition of remaining interest (51%) in NOF
Nihonbashi Honcho Building, completing
disposition of the property in its entirety

Disposition
Possible forredevelopment

AssetManagement

Inadequate forredevelopment

Strategic Property Replacement (SPR)
Promotion of disposition of properties amounting to cumulative total of 51.3 billion yen in the approximately 1.5 years since
establishment of Nomura Real Estate Master Fund (※)※ The sum total of the acquisition price of disposition properties announced to date since establishment, and thus including properties of which disposition is yet to be completed.

2

Points of the Transaction

1

Avoidance of risk of decrease in revenue through disposition of properties✔ Disposition of Mitsubishi Motors Shibuya and Mitsubishi Motors Suginami
to avoid risk of decrease in revenue arising from having received notice of contract cancellation from tenants✔ Disposition of remaining interest (51%) in NOF Nihonbashi Honcho Building to complete disposition of the property in its
entirety2

Acquisition of prime properties and securing of external growth opportunities✔ Along with acquisition of prime properties of various uses developed by the sponsor, disposition with right of first refusal
after redevelopment of favorably-located properties to the sponsor to secure future external growth opportunities

Change in Various Indicators Subsequent to End of 3rd Fiscal Period

17/2/28( 3rd FP )Published ※1

Today's Release

Acquisition Disposition

Acquisition Disposition

After SPR

Number ofProperties

272 properties+3-2
properties properties

+4 ※2
-3
properties properties

273 properties※2

AcquisitionPrice\932,896mln.

+21,400m
ln.

+16,885m
ln.

\952,538mln.

Age
（※2）

Repair Cost（※3）

-5,429mln.

-13,224mln.

19.6 years-0.2 years-0.8years

18.6 years\57,139mln.

-1,514mln.

-385mln.

\55,239mln.

※1: Acqusition of 3properties (nORBESA, Nakaza Cui-daore Building, PRIME URBAN Gakugei Daigaku Parkfront) and Disposition of 2properties (NOF Technoport Kamata
Center Building, Ito-Yokado Higashi-Narashino Store)※2: The number of the properties from the additional acquisition of Nomura Real Estate Kichijoji Building released today, does not change, since the acquisition of the said
property is the additional acquisition of the quasi-ownership.
※3: Figures as of today (March 21, 2017).
※4: The total amount of the forecast of long-term repair costs (12 years) written in the Engineering Report.

3

Overview of New Properties
RetailNRE Kichijoji Building(Aditional stake acquisition 49%)

Acquisition Price ¥5,100mln.

✔ Retail facility serving as a landmark in the Kichijoji area located
3-minute walk from Kichijoji Station on JR Chuo and Sobu Lines andKeio Inokashira Line
✔ With largest company in domestic fashion industry as tenant, boasts
high brand power
Residential

PROUD FLAT Omori ⅢAcquisition Price ¥1,110mln.

✔ Located 5-minute walk from Omori Station on JR Keihin-Tohoku
Line, boasts excellent access to Shinagawa, Tokyo and other major
business areas and also close proximity to Haneda Airport✔ Omori Station vicinity has concentration of retail facilities, including
station building, making it a busy and convenient area

Logistics

Landport Kashiwa Shonan Ⅰ

Acquisition Price ¥9,900mln.

✔ Favorable location within 30km from central Tokyo, approximately 12km
from “Kashiwa IC” on Joban Expressway and near National Route 16✔ With leading commuter town of Chiba Prefecture nearby, exclusive
shuttle bus service to Abiko Station on JR Joban Line will enablesecuring of employment from wide area
Residential

PROUD FLAT Kinshicho

Acquisition Price ¥785mln.

✔ Located 5-minute walk from Kinshicho Station on JR Sobu Lineand Sobu Line (Rapid) and Tokyo Metro Hanzomon Line, providing
access to 3 train lines✔ Kinshicho Station vicinity has “olinas” mixed-use facility withshopping mall, cinema complex, etc., large ”Kinshi Koen” park, etc.,
providing high convenience in terms of daily living

4Regarding the Management of
Mitsubishi Motors Shibuya and Suginami

Risk of decrease in revenue from receiving notice of contract cancellation
being turned into external growth opportunities
LeasingRetainingthe asset
Received noticein September
2016 of contract
cancellation

The risk of prolongation of vacancy period is high.

Redevelop-ment

Construction delays, extended leasing periods, etc.
causing development risks
High risk of decrease in revenue

External

Amid fierce competition to acquire properties,
sustainable assets with untapped potential
shortsightedly transferred to external parties
Missing out on external growth opportunities

SponsorBoth properties are highly rated for their location, boasting
potential for increase in revenue through redevelopment
Securing external growth opportunities fromredeveloped properties

SaleRetailMitsubishi Motors Shibuya✔ Corner lot of residential
district of Shibuya Ward
✔ Site is regular-shaped
land exceeding 1,400 m2

The operator is limited from business scale, investment yield,
and the credit of the tenant.

Acquisition Price ¥1,720mln.

RetailMitsubishi Motors Suginami

Acquisition Price ¥896mln.

✔ Corner lot facing Waseda-dori,boasting high visibility✔ Site area exceeding 1,800 m2

Subject Property
Subject Property

5Retaining of Amount Equivalent to Gain on Sale
Basic distribution policy

Distribution policy if there is gain on sale of real estate
There may be cases of adjustment of distribution in excess of profit
to retain cash of an amount equivalent to gain on sale of real estatein an aim for medium- to long-term stable management
Retaining ofGain onsale of realamount equivalent toestate
gain on sale of real estate
RetainDistribution in excess
of profit

Distribute net income + amortization of goodwill

Amortizationof goodwill

Distribution
in excessof profit

Gain onsale of realestateDistributionof profit

ProfitProfitProfit(statement ofincome)

Total distributions

Amortizationof goodwill

Gain onsale of realestateDistribution of gainon sale of real estateand corresponding
adjustment ofdistribution in excessof profit

ProfitProfitProfitexcludinggain on saleofreal estate

excludinggain on saleofreal estate

excludinggain on saleofreal estate

Profit(statement ofincome)Distribution
policyBreakdown ofdistribution

Utilization of retained cash

Possible scope of retaining of cash
Can retain within the scope of amortization of goodwill in principle to avoid taxation(※1)

Utilization of the retained cash for distribution in excessof profit<Image if distribution in excess of profit is implemented><Change in taxable income in excess of profit>

Distribution ofthe retained cash

TaxableincomeTaxable
incomeProfitAmortization difference betweenof goodwill tax and accounting
treatment

Possiblescope ofretainingof cash

loss ofdispositionin terms oftax
treatment

TaxableincomePosting ofgain/loss of
disposition
properties

TaxableincomeBreakdown ofdistribution
in excess of
profitAllowance fortemporary difference
adjustments

Amortizationof goodwill

Distribution
in excess of
profitDistributionof profit
Profit(statement ofincome)

Total
distributions*1 If allowance for temporary difference adjustments is a negative figure, there may be cases of retaining an amount equivalent to gain on sale of real estate in excess of amortization of goodwill.
*2 There may be case of utilization of investment.

6This document has been prepared for the purpose of provision of information only, and should not
be construed as an offer, solicitation or commercial conduct of any nature associated with anyspecific products. Investors wishing to purchase the investment units of Nomura Real Estate Master
Fund, Inc. should contact their own securities brokers or dealers. A fee may be charged by yourfinancial instruments business operator in relation to the sale or purchase of investment units.
For management fees that the Fund pays to Nomura Real Estate Asset Management Co., Ltd., pleaserefer to the terms and conditions of the Fund, etc.
The forward-looking statements with respect to the future financial results contained in thisdocument are based on the current facts about the investment policy of the Fund, applicable lawsand regulations, the market environment, business practice, etc., as of the preparation date of thisdocument and do not reflect or consider any changes in the circumstances after the preparation
date. These forward-looking statements inherently reflect uncertainty about known risks as well as
unknown risks and other factors and may deviate from the actual operating and management
results, financial conditions, etc., of the Fund.
Investment in real estate investment securities may result in a loss due to a decline in thetransaction price caused by, for example, changes in the price or the revenue-generating capabilityof the underlying properties or deterioration of the financial conditions of the issuer.
Although the information contained in this document is intended to be complete and thorough, there
is no assurance of precision and safety of the same. Please note that the contents of this document
is subject to change or cancellation without prior notice.
It is prohibited to make duplication, reproduction, distribution or use of any part or whole of theinformation contained in this document without express prior written consent.