October 15, 2007

Financial Results for the Fiscal Period
From March 1, 2007 to August 31, 2007
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/)
Executive Director:
Nobuyuki Nakai
Investment Management Company: Mitsui Fudosan Accommodations Fund Management Co., Ltd.
Inquiries:
Morio Shibata, Director and Chief Financial Officer
Tel: +81-3-3246-3677
Scheduled Filing Date of Securities Report:
November 28, 2007
Scheduled Commencement Date of Cash Distribution Payment: November 15, 20071. Business Results for the Fiscal Period From March 1, 2007 to August 31, 2007
(in millions of yen, rounded down; except as noted)(1) Operating Results
Total revenue

Operating income(%)

Income before incometaxes

(%)

(%)

For the period ended
August 31, 2007

3,524(30.5)

1,795(33.7)

1,447(28.7)

February 28, 2007

5,072

449.0

2,705

480.5

2,029

437.5

Operatingincome /IncomebeforeIncomeNet income Net income/ income
per unit
net assets
beforetaxes/
Total assets incometaxes

Net income

(%)

(yen)

(%)

(%)

(%)

For the period ended
August 31, 2007

1,446

(28.7)

12,749

2.3

1.3

41.1

February 28, 2007

2,028

438.2

23,375

4.8

2.7

40.0

(Percent figures show changes from previous period)

1(2) Distributions(in millions of yen, rounded down; except as noted)
Distribution
per unit

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

Total
distributions(yen)

For the period ended
August 31, 2007

12,7501,446––

100.0

2.3

February 28, 2007

17,871

2,028––

99.9

3.2

Notes:
1. The payout ratio is rounded down to the nearest first decimal place.
2. “Distribution per unit” does not include distribution in excess of retained earnings per unit.

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

Total assets

Net assets

Net assets/
total assets

Net assets perunit

(%)

(yen)

54.6

550,102

As ofAugust 31, 2007

114,366

62,425February 28, 2007

108,096
63,00658.3
555,223
Note: Net assets as of August 31, 2007 and February 28, 2007 were respectively ¥62,425 millionand ¥63,006 million.

(4) Cash Flow(in millions of yen, rounded down; except as noted)

Cash flows fromoperating activities

Cash flows frominvesting activities

Cash flows fromfinancing activities

Cash and cash
equivalents

(%)

(yen)

For the period ended
August 31, 2007

1,861

(7,315)

4,974

3,437

February 28, 2007

4,259

(62,560)

60,7423,917

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2. Forecasts for the Fiscal Period From September 1, 2007 to February 29, 2008
(in millions of yen, rounded down; except as noted)

For the period ending

February 29, 2008

Totalrevenue

Operatingincome%%4,014 (13.9)

Distributions
Incomein excess ofDistribution
beforeNet income
retainedper unit
income taxes
earnings perunit%

1,971 (9.8)%(yen)(yen)

1,470 (1.6) 1,469 (1.6)

12,950-(Percent figures show changes from previous period)

Notes:
1. “Distribution per unit” does not include distribution in excess of retained earnings per unit.
2. Projected net income per unit for the fiscal period ending February 29, 2007 is 12,950 yen.

3. Other
1. Changes in significant accounting policies: None.
(1) Changes due to revisions in accounting standards and others: None
(2) Changes other than in the above item (1): None.
2. Number of Investment Units Issued and Outstanding(1) The number of investment units issued and outstanding (including treasury investment
units) as of the period-end:
As of August 31, 2007:

113,480 units

As of February 28, 2007:

113,480 units(2) The number of treasury investment units as of the period-end:
As of August 31, 2007:- units

As of February 28, 2007:- units

Note:
1. Net income per unit is calculated by dividing net income by the weighted average number ofunits: 113,480 units as of August 31, 2007, and 86,757 units as of February 28, 2007.

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3rd Period (August 2007) Overview of Operating Results(in millions of yen, rounded down; except as noted)

Number of days
under asset
management(days)
Total revenue
Income before
income taxes
Net income
Distribution perunit (Yen)
Number ofinvestment
properties
Averageoccupancy rate atend of period (%)

Result of the 3rdPeriod (August2007) (1)184Forecast of the3rd Period

3,524
1,447

3,498
1,401

5,072
2,029(1,548)
(582)

1,446
12,7501,400
12,3402,028
17,871(582)(5,121)

30

30

27

3

96.9

95

97.2(0.3)

184

Result of the 2ndPeriod (February2007) (2)334

Comparison withthe 2nd Period(1)-(2)(150)

Overview of performance and distribution
As a result of the above results, NAF recorded total revenue of ¥3,524 million, operating income of¥1,795 million, income before income taxes of ¥1,447 million, and net income of ¥1,446 million. Inaddition to the above, NAF has decided to distribute nearly the entire amount of retained earnings
in accordance with the distribution policy (Article 34) set forth by NAF. The distribution per unit
was ¥12,750.

3rd Period (August 2007) Overview of Investment
External Growth (Acquisition and sale of properties)
During the period under review ended August 31, 2007, NAF acquired one property in March 2007
(acquisition price: ¥1,608 million) and two properties in April 2007 (total acquisition price: ¥5,240million). As a result, NAF held 30 properties in its assets at the end of the period and the totalacquisition price was ¥108,233 million.

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Internal Growth (Management and operation of properties held by NAF)
NAF concentrates to hold its investment properties in the 23 wards of Tokyo, where the demand
for rental housing is steadily strong and implemented effective leasing activities in accordancewith the regional characteristics and the individual feature of our each property collaborating withMitsui Fudosan Housing Lease Co., Ltd. (“MFHL”), Master Property Management company. NAF
has continued large-scale repair work of exterior wall at the Okawabata Apartment Communities,
one of the principle properties, since the previous period.
Furthermore, NAF implemented renovation of proprietary space of some dwelling units. Aiming toincrease name recognition of the “Park Axis” brand, NAF addressed measures such as creation of
new logo in cooperation with Mitsui Fudosan Co., Ltd. As portfolio management system stated its
operation on a full scale in MFHL in this period, that enabled NAF to enhance the expedition ofmanagement and operation business further and develop the recruiting tenants activities suited tothe situation of the individual property.
As a result of above leasing activities, lease-up of “Park Cube Ikebukuro Kanamecho” has been
almost completed, which was newly constructed and was not in operation at the time ofacquisition. NAF achieved the high average occupancy rate of 96.9% in all invested properties atthe end of the 3rd period. At the same time, NAF strived to reduce the maintenance costs ofequipment. NAF will try to implement measures in relation to “accommodating” service
corresponding to various needs, in accordance with the results of residents questionnaire survey
as to all of the properties implemented in the previous period.
Financial Strategy (Overview of funds procurement)
NAF has borrowed funds from some financial institutions to purchase the new assets, which thetotaled amount was ¥7,000 million. As a result, total interest-bearing debt at the end of the 3rd
period reached to ¥49,500 million with 43.3% of LTV (loan-to-value ratio). To hedge the interest
ratio raise for borrowings, NAF emphasizes the use of long-term, fixed-rate loans to counter therisk of future increases in interest rates and the long-term fixed ratio for the total interest-bearing
debt at the end of the 3rd period is 68.7%.
Moreover, NAF filed the shelf-registration statement of investment corporation bonds in public
offering to the Kanto Local Finance Bureau of the Ministry of Finance in July 2007 to diversify andincrease the flexibility of access to funding.
Brief overview of the shelf-registration statement is as follows.
Planned issuance amount
Scheduled period of issuance
Reason for use of proceeds

Up to ¥100 billion
From July 18, 2007 to July 17, 2009
Acquisition of new specified assets (same meaning as definedin Article 2-1 of the Investment Trust and Investment
Corporation Act of Japan), Repayment of borrowings,
Repayment of tenant security deposit, payment for maintenanceand renovation, and operational use.

5Rating of NAF as of August 31, 2007 is as follows.
Rating agency
Moody’s Investors Service Inc
Rating and Investment Information, Inc.
Standard and Poor’s

Rating subject
Issuer credit rating
Issuer credit rating

Long-term
Corporate
Short-term
Corporate

RatingA 1 (Outlook for rating: Stable)
A A (Trend of rating: Stable)
A + (Outlook for rating: Stable)
A-1

Outlook of investment performance
The forecast for the 4th period (from September 1, 2007 to February 29, 2008) is as follows.
(in millions of yen, rounded down; except as noted)

Total revenue
Income before income taxes
Net income
Distribution per unit
Cash distribution in excess of net income¥4,014¥1,470¥1,469¥12,950¥―

Underlying assumptions of forecasts
Investment assets: NAF is assuming that there is no change from 37 properties held as ofOctober 15, 2007 during the period. (No acquisition and no sale ofproperties)
Interest-bearing debt ratio: Interest-bearing debt ratio of 51.4% as of October 15, 2007 is thepremise of the forecast.
Interest-bearing debt ratio = Interest-bearing debt / (Interest-bearing debt + capital)
Number of units issued: The 113,480 units outstanding as of October 15, 2007 (assumption ofno additional unit issuance) is assumed.
Note: Above-mentioned forecasts are based on the above assumptions and information available
at the time of preparation of this information. As a result, actual total revenue, income before
income taxes, net income, distribution per unit and exceeding profit distribution per unit will
be subject to change due to acquisition or sale of properties in future, fluctuation in the realestate market, and other changes in environment around NAF. Accordingly, the forecasts
are not a guarantee of any cash distribution amount.

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Management policy and issues to be dealt with hereafter
External Growth (New acquisition of properties)
NAF will try to screen the properties that will bring the stable profit in the long and medium terms
and can be competitive.
And NAF will aim the constant acquisition of properties, with an emphasis on avoiding excessive
price competition.
Internal Growth (Management and operation of leasehold properties)
NAF will review the adequacy of the grade of property management and cost of management andoperation as to each property in an appropriate time and manner and will reduce the cost by thereasonable review of management cost, by utilizing the advantage of requesting Master Property
Management company to manage the properties in bulk. Also, NAF is continuously aiming at themaintenance and enhancement of the market competitiveness of Okawabata Apartment
Communities by the implementation of strategic renovation.
Financial Strategy
NAF will continue to emphasize the use of long-term, fixed-rate loans. Intending to diversify andincrease the flexibility of access to finding, NAF was registered as the investment corporation
issuing bonds in public offering in July, 2007. So NAF will examine the issuances of the bonds forthe future. Regarding LTV (loan-to-value ratio), upper limit is set at 60% and targeted range during
operation is set at approximately 40% to 50%. Additionally, NAF will examine the issuance of newunits paying attention to market trend and distribution level and taking into consideration funddemands on property acquisition and financial situation.

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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