O

April 16, 2012

Financial Results for the Fiscal Period
From September 1, 2011 to February 29, 2012
Nippon Accommodations Fund Inc. (NAF) is listed on the Tokyo Stock Exchange (J-REIT) withthe securities code number 3226. (Website: http://www.naf-r.jp/english/)Representative Executive Director:
Asset Management Company:
Representative President and CEO:Inquiries:

Yuji Yokoyama
Mitsui Fudosan Accommodations Fund Management Co., Ltd.
Kosei Murakami
Satoshi Nohara, Director and Chief Financial Officer
Tel: +81-3-3246-3677
Scheduled Filing Date of Securities Report:
May 29, 2012Scheduled Commencement Date of Cash Distribution Payment: May 15, 2012

1. Business Results for the Fiscal Period from September 1, 2011 to February 29, 2012
(1) Operating Results(in millions of yen, rounded down; except as noted)
Total revenues

Operating income(%)*

Income before incometaxes

(%)*

(%)*

For the period ended
February 29, 2012

7,857

3.9

3,613

5.6

2,833

7.7

August 31, 2011

7,565

22.4

3,420

16.2

2,631

19.5

IncomeIncomebeforebeforeNet income Net income/ income
incomeper unit
net assets
taxes/taxes/
operatingtotal assets
incomeNet income

(%)*

(yen)

(%)

(%)

(%)

For the period ended
February 29, 2012

2,832

7.7

14,548

2.7

1.2

36.1

August 31, 2011

2,630

19.6

13,518

2.8

1.2

34.8

*Percent figures show changes from previous period1(2) Distributions(in millions of yen, rounded down; except as noted)
Distribution
per unit

Distribution in
Total
excess ofdistributions inDistributions/
Payout ratio
earnings
net assets
excess of
per unit
earnings
(yen)
(%)
(%)

Total
distributions(yen)

For the period ended
February 29, 2012

14,5482,832––100.02.7

August 31, 2011

13,508

2,630

––

100.0

2.5

Note:
The payout ratio is rounded down to the nearest first decimal place.

(3) Financial Position(in millions of yen, rounded down; except as noted)

Total assets

Net assets

Net assets/
total assets

Net assets perunit

(%)

(yen)

As ofFebruary 29, 2012

237,222106,06844.7

544,746

August 31, 2011

230,551

105,86545.9

543,705

Cash flows fromoperating activities

Cash flows frominvesting activities(4) Cash Flows(in millions of yen, rounded down; except as noted)Cash flows fromfinancing activities

Cash and cash
equivalents

For the period ended
February 29, 2012

4,403

(7,805)

3,870

4,951

August 31, 2011

4,799

(38,879)

34,3854,483

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2. Forecasts for the Fiscal Period from March 1, 2012 to August 31, 2012
(in millions of yen, rounded down; except as noted)

Totalrevenues

For the period ending

August 31, 2012

8,075

Distribution in
IncomeDistribution excess ofbefore
Net income
per unit
earnings
income taxes
per unit

Operatingincome

(%)*

(%)*

(%)*

(%)*

(yen)

(yen)

2.8 3,557(1.5) 2,757(2.7) 2,757 (2.7)

13,800–*Percent figures show changes from previous period

Notes:
1. Projected net income per unit for the fiscal period ending August 31, 2012 is ¥14,159.
2. “Distribution per unit” is calculated on the assumption that a part of retained earnings beretained internally.

3. Other
1. Changes in significant accounting policies, Changes in accounting estimates and Restatement:(1) Changes due to revisions in accounting standards and others: None
(2) Changes other than in the above item (1): None
(3) Changes in accounting estimates: None(4) Restatement: None
For accounting changes and corrections of prior period errors which are made after thebeginning of the period ended February 29, 2012, NAF adopted the “Accounting Standard forAccounting Changes and Error Corrections” (Accounting Standards Board of Japan (“ASBJ”)
Statement No. 24 issued on December 4, 2009) and the “Guidance on Accounting Standard
for Accounting Changes and Error Corrections” (ASBJ Guidance No. 24 issued on December4, 2009).
2. Number of investment units issued(1) The number of investment units issued (including treasury investment units) as of theperiod-end:
As of February 29, 2012:

194,711 units

As of August 31, 2011:

194,711 units(2) The number of treasury investment units as of the period-end:
As of February 29, 2012:- units

As of August 31, 2011:- units

Note:
Net income per unit is calculated by dividing net income by the weighted average number ofinvestment units: 194,711 units as of February 29, 2012, and 194,559 units as of August 31,
2011.
Disclaimer:
The above forecasts are based on information currently available to NAF and on certain
assumptions deemed to be reasonable. Actual operations may differ substantially due to anumber of factors.

312th Period (February 2012) Overview of Operating Results(in millions of yen, rounded down; except as noted)

Result of the 12thPeriod(February 2012)(1)
Number ofoperating days
Total revenues
Income before
income taxes
Net income
Distribution perunit (yen)Number ofinvestment
properties
Averageoccupancy rate atend of period (%)

Forecast of the12th Period

Result of the 11thPeriod(August 2011)(2)

Comparison withthe 11th Period(1)-(2)

182

182

184

(2)

7,857

7,795

7,565

291

2,833

2,746

2,631

202

2,832

2,745

2,630

202

14,548

14,10013,508

1,040

87

86

83

4

96.2

95.0

95.5

0.7

Overview of Performance and Distribution
In the period under review, NAF recorded total revenues of ¥7,857 million, operating income of¥3,613 million, income before income taxes of ¥2,833 million and net income of ¥2,832 million. Inaddition to the above, NAF has decided to distribute nearly the entire amount of earnings inaccordance with the Distribution Policy (Article 34 of the Articles of Incorporation) set forth by NAF.
The distribution per unit was ¥14,548.

12th Period (February 2012) Overview of Investment
External Growth (Acquisition of properties)
During the period under review, NAF acquired 4 properties in total consisting of 3 properties in
September 2011 (total acquisition price: ¥5,650 million) and 1 property in January 2012(acquisition price: ¥1,700 million).

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Internal Growth (Management and operation of properties held by NAF)
Mitsui Fudosan Housing Lease Co., Ltd., the master property management company (below,“Master PM”), and the asset management company collaborate in the management of properties
held by NAF with the aim of implementing effective management and operation activities inaccordance with regional characteristics and the individual features of each property. Theseinclude efforts such as rapid management and operations by the Master PM applying the portfolio
management system, tenant recruiting activities suited to the circumstances of individualproperties, the streamlining of management cost reduction efforts, interior renovations at
Okawabata Apartment Communities, one of the principle properties of NAF, and provide tenant
services corresponding to various needs in accordance with the results of resident questionnaires.
Financial Strategy (Overview of funds procurement)
During the period under review, NAF borrowed a total amount of ¥7,500 million from multiple
financial institutions as funds for the acquisition of new properties, etc. Also, while taking into
account market trends and interest rate levels, NAF raised the long-term loans to totalinterest-bearing debt ratio and refinanced its existing loans. As a result, total interest-bearing debt
at the end of the period amounted to ¥126,000 million, while the long-term loans to totalinterest-bearing debt ratio was 94.4% (ratio excluding long-term loans due within one year:80.6%). Also, LTV (loan-to-value ratio) at the end of the period was 53.1%.
A shelf-registration statement of investment corporation bonds in public offering was filed at theKanto Local Finance Bureau in July 2011. An overview of the shelf-registration statement is givenbelow. The remaining balance of the planned issuance amount at the end of the period is¥100,000 million.
Planned issuance amount
Scheduled period of issuancePurpose for funds

Up to ¥100,000 million
From July 18, 2011 to July 17, 2013
Acquisition of new specified assets (same meaning as definedin Article 2, Paragraph 1 of the Investment Trust and Investment
Corporation Act of Japan), repayment of borrowings, repaymentof tenant security deposit, payments for maintenance andrenovation, and operational use

Rating of NAF as of February 29, 2012 is as follows.
Rating agency
Rating subject
RatingMoody’s Japan K.K. (Moody’s)Issuer credit ratingA 2 (Outlook for rating: Negative)*
Rating and Investment Information, Inc. Issuer credit rating
A A - (Trend of rating: Stable)(R&I)
Standard & Poor’s Ratings Japan K.K.
Long-term corporate A + (Outlook for rating: Stable)(S&P)
Short-term corporate A -1
*Moody’s provided NAF with an issuer credit rating of “A 3 (Outlook for rating: Stable)” on March 15,
2012.

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Significant Subsequent Events
Not applicable.
(Reference information)
The following assets were acquired on March 29, 2012. The figures listed below under“Acquisition price” are exclusive of miscellaneous expenses for acquisition, fixed property taxes,
urban planning taxes, consumption taxes, and local consumption taxes.
Artis Sendai Kakyoin
Acquisition price:
Appraised value:

Type of property:
Location (residence indication):
Completion date:
Structure/number of stories:
Rentable units:
Rentable area:
Seller:Artis Sendai Kimachi Dori
Acquisition price:
Appraised value:

Type of property:
Location (residence indication):
Completion date:
Structure/number of stories:
Rentable units:
Rentable area:
Seller:¥540 million¥581 million(date of value appraisal: February 29,2012)
Real estate
1-6, Kakyoin 2-chome, Aoba-ku,
Sendai-shi, MiyagiDecember 2008
Flat-roofed reinforced concrete structure/
11 stories
60 residential
1,564.40 m²
ITOCHU Corporation¥1,160 million¥1,270 million(date of value appraisal: February 29,2012)
Real estate
4-45, Kimachi Dori 1-chome, Aoba-ku,
Sendai-shi, Miyagi
March 2010
Flat-roofed reinforced concrete structure/
14 stories
142 residential
4,063.47 m²
ITOCHU Corporation6

A sales contract for the following asset was concluded on April 6, 2012. The scheduled
handover date is April 25, 2012. The figure listed below under “Transfer price” is exclusive of
miscellaneous expenses, fixed property taxes, urban planning taxes, consumption taxes, andlocal consumption taxes.
Park Cube Keio Hachioji
Transfer price:
Type of property:
Location (residence indication):
Completion date:
Structure/number of stories:
Rentable units:
Rentable area:¥1,020 million
Trust beneficiary interest
25-3, Myojincho 1-chome, Hachioji-shi,Tokyo
January 2005
Flat-roofed reinforced concrete structure/
14 stories
52 residential
2,814.32 m²

7Forecasts of Investment Performance
The forecasts for the 13th period (from March 1, 2012 to August 31, 2012) are as follows.
(in millions of yen, rounded down; except as noted)

Total revenues
Income before income taxes
Net income
Distribution per unit (yen)Distribution in excess of earnings per unit (yen)13th period(August 2012)
8,075
2,757
2,757
13,800―Notes: Underlying assumptions of forecasts
Investment assets:

Expenses:

Interest-bearing debt:

Number of units
issued:Distribution per unit:-The number of properties held by NAF as of the date of this document
is 89.
-For Park Cube Keio Hachioji, a trust beneficiary interest sales contract(transfer) whereby the handover will be made on April 25, 2012 hasbeen concluded. An approx. ¥85 million in gain on sale of investment
properties from this property is anticipated.
-In the forecasts of investment performance, for the 88 properties held
following the handover of Park Cube Keio Hachioji stated above, it isassumed that no subsequent transfer of properties (acquisition of new
properties, transfer of properties acquired, etc.) shall occur until August
31, 2012.
-The occupancy rate at the end of the 13th period for total properties isexpected to be approx. 95 %.
-The following expenses are projected.
(in millions of yen)
13th period
Fixed property taxes and399
urban planning taxes
Depreciation and amortization
1,724Interest expense and interest
expenses on investment799
corporation bonds-It is assumed that NAF’s balance of interest-bearing debt that is¥127,500 million as of the date of this document shall not fluctuate until
August 31, 2012.
-We assume 194,711 units outstanding as of the date of this document.
-It is assumed that, there shall be no issuance of new units until August
31, 2012.
-Regarding the gain from transfer of Park Cube Keio Hachioji, in orderto strengthen its financial position, NAF plans to internally retain approx.
¥70 million by implementing a reduction entry utilizing the “SpecialProvisions for Taxation in the Event of Advance Acquisition of Land,etc. in 2009 and 2010.”

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The forecasts are the figures calculated based on the above assumptions at the time ofpreparation of this information. Therefore, actual total revenues, income before income taxes, net
income and distribution per unit may be subject to change due to acquisition or sale of properties
in future, fluctuation in the real estate market or other changes in the environment in which NAF
operates. Accordingly, the forecasts are not a guarantee of any cash distribution amount.

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Management Policy and Issues for the 13th Period Onward
NAF has always aimed to maximize its unitholder value through investments in accommodation
properties and the utilization of the Mitsui Fudosan Group as well as the formulation andmanagement of a high quality portfolio centered on rental residential properties located in the 23
wards of Tokyo.
From the 13th period onward, we aim to manage our portfolio stably based on theabove-mentioned policies and further increase our unitholder value by achieving internal andexternal growth expectations.
External Growth (New acquisition of properties)
We will strive to rapidly obtain the best real estate information possible by utilizing our pipeline to
the Mitsui Fudosan Group and fortifying our independent information channel consisting of theasset management company. Our basic strategy will be to stably expand our portfolio based on
the Park Axis Series developed by Mitsui Fudosan Co., Ltd. in addition to the Park Cube Series
constructed by other developers. Moreover, we will work to steadily acquire properties considered
to possess mid- to long-term competitive advantages through individual strategies such asenhancing our portfolio within the 23 wards of Tokyo and other parts of the Tokyo area, mainlywith single-occupant and compact residential properties for which a high occupancy rate isexpected, and carefully selecting properties for investment in the major cities of regional areas.
The main part of the acquisition strategy of NAF continues to be stable acquisition of “RentalApartments”. However, it will continue to consider making acquisitions of “Other AccommodationAssets”, including dormitories and corporate housing, as the investment market in “OtherAccommodation Assets”, excluding “Rental Apartments”, appears to have matured in somecategories. In the management of its portfolio, NAF has set the upper limit of the share of “OtherAccommodation Assets” in the overall portfolio to around 10% (on the basis of acquisition price)for the time being (the share of “Other Accommodation Assets” in the overall portfolio was 3.5% at
the end of the 12th period).
We will also continue to work towards effectuating high quality due diligence when acquiringproperties in order to avoid risk.
Internal Growth (Management and operation of leasehold properties)
NAF will aim to improve its rent levels and occupancy rate through the formulation andimplementation of a leasing strategy that takes into account the characteristics of each individual
property with the objective of maximizing rent revenues over the mid- to long-term. NAF will
review the adequacy of the grade of property management and cost of management andoperation as to each invested property in an appropriate timeframe and manner and reduce costby the rational review of management cost by utilizing the merits of outsourcing all property
management tasks to the Master PM. NAF will continue to aim to maintain and enhance market
competitiveness by implementing strategic renovations, primarily at Okawabata Apartment
Communities.

10Further, with the help of Mitsui Fudosan Co., Ltd., NAF will work to establish brand power byconcentrating on the market penetration of the “Park Axis” brand, NAF’s main invested asset, andthe further enhancement of name recognition on the rental housing market.
Financial Strategy
NAF will continue to emphasize the continued use of long-term, fixed-rate loans taking into
account measures to counter future interest rate and refinancing risks. Regarding LTV(loan-to-value ratio), the upper limit is set at around 60%. NAF will examine the issuance of newunits paying attention to market trends and distribution levels and taking into consideration thedemand for funds for the purpose of property acquisition as well as our financial position.
Additionally, NAF will examine future issuances of investment corporation bonds, in accordancewith market trends, within the range of the remaining balance of the planned issuance amount, forwhich shelf-registration of NAF bonds has been carried out.

Disclaimer:This financial report has been prepared in accordance with Japanese accounting standards andJapanese laws. Figures have been rounded down to eliminate amounts of less than one million
yen.
Please note that this English translation of the Japanese original document is provided solely for
informational purposes. In the event of any discrepancy between the Japanese original and thisEnglish translation, the Japanese original shall prevail.

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