Semi-Annual Report
13th fiscal period
December 1, 2012 >>> May 31, 2013

1－1－

Profile
Nomura Real Estate Residential Fund, Inc. (referred to as “Nomura Residential Fund” or
the “Company” hereinafter) was listed on the Tokyo Stock Exchange on February 14, 2007as a real estate investment corporation formed to own and invest in Residential properties,
subject to the Act on Investment Trusts and Investment Corporations of Japan. The
Company’s basic investment policy is to assure stable rent revenues and steady portfolio
growth over the medium-to-long-term.
Nomura Real Estate Asset Management Co., Ltd. (referred to as “NREAM” hereinafter), a
wholly owned subsidiary of Nomura Real Estate Holdings, Inc. is in charge of asset
management on behalf of Residential Fund in accordance with the basic investment policy
as described above. Through coordination with Nomura Real Estate Holdings, Inc. andother group companies, NREAM aims to achieve these goals and more.

Contents
To Our Investors
Summary of Portfolio Properties
Profile of the Asset Management Company
Performance Report
Financial Section
Business Structure/Corporate Data
Website

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-11－2－To Our Investors
Dear Investors,
I would like to thank all of you for your continuing trust in Nomura Real Estate Residential Fund, Inc. and tell you howmuch we value being a part of your financial portfolio.
Closing of accounts for the 13th fiscal period, which ended May 31, 2013, showed the following overview and results.
Concerning real estate transactions in the fiscal period under review, we promoted property replacement for the purpose ofenhancement of portfolio profitability and quality by utilizing diverse sourcing channels, such as Nomura Real Estate
Development Co., Ltd. Specifically, we sold two properties in the Greater Tokyo Area and acquired URBAN STAGE Mejiro.
As a result, the size of assets at the end of the fiscal period was 152 properties amounting to 150,960 million yen.
Concerning the management of properties we own, we launched appropriate leasing activities according to property
characteristics in the busy tenant turnover season at the end of the fiscal year, resulting in the portfolio occupancy rate at theend of the fiscal period being maintained at a high level of 96.4%. In addition, at URBAN STAGE Komagome, we
implemented construction work that split a large residential unit of over 200 square meters into four residential units for
remodeling into residential units that meet tenant needs and thereby completed lease-up at an early stage.
Concerning financing activities, we achieved lengthening of loan periods and fixing of interest rates upon refinancing 7.1
billion yen to enhance financial stability and address the risk of rising interest rates.
As a result of the management described above, we achieved operating revenues of 5,257 million yen, ordinary income of
1,878 million yen and net income of 1,876 million yen for the period.
In addition, concerning cash distributions, we decided that an amount of a portion of the gain on transfer of land, etc. earned
in a transfer of property shall be set aside as a reserve for reduction entry by utilizing the “Special Provisions for Taxation in
the Event of Advance Acquisition of Land, etc. in 2009 and 2010” under Article 66-2 of the Act on Special Measures
Concerning Taxation. As a result, we declared cash distribution per unit of 12,170 yen.
We will continue prioritizing stable management over the mid- and long-term in and after the next fiscal period.
Again, we are grateful for the trust you have placed in us and we look forward to serving you in 2013.

Masatomi Natsume
Executive Director
Nomura Real Estate Residential Fund, Inc.
Chief Investment Officer, NRF
Nomura Real Estate Asset Management Co., Ltd.

1－3－
-2-

Summary of Portfolio Properties
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83
84
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86
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89
90

Name of Property
PROUD FLAT Shirokane Takanawa
PROUD FLAT Yoyogi Uehara
PROUD FLAT Hatsudai
PROUD FLAT Shibuya Sakuragaoka
PROUD FLAT Gakugei Daigaku
PROUD FLAT M eguro Gyoninzaka
PROUD FLAT Sumida Riverside
PROUD FLAT Kagurazaka
PROUD FLAT Waseda
PROUD FLAT Shinjuku Kawadacho
PROUD FLAT Sangen Jaya
PROUD FLAT Kamata
PROUD FLAT Kamata II
PROUD FLAT Shinotsuka
PROUD FLAT Kiyosumi Shirakawa
PROUD FLAT M onzen Nakacho II
PROUD FLAT M onzen Nakacho I
PROUD FLAT Fujimidai
PROUD FLAT Asakusa Komagata
PROUD FLAT Yokohama
PROUD FLAT Kamioooka
PROUD FLAT Tsurumi II
PRIM E URBAN Akasaka
PRIM E URBAN Tamachi
PRIM E URBAN Yoyogi
PRIM E URBAN Bancho
PRIM E URBAN Chiyoda Fujimi
PRIM E URBAN Iidabashi
PRIM E URBAN Ebisu
PRIM E URBAN Naka M eguro
PRIM E URBAN Gakugei Daigaku
PRIM E URBAN Senzoku
PRIM E URBAN M eguro Riverside
PRIM E URBAN M eguro Ohashi Hills
PRIM E URBAN Hakusan
PRIM E URBAN Yotsuya Gaien Higashi
PRIM E URBAN Nishi Shinjuku I
PRIM E URBAN Nishi Shinjuku II
PRIM E URBAN Shinjuku Naitomachi
PRIM E URBAN Nishi Waseda
PRIM E URBAN Sangen Jaya
PRIM E URBAN M inami Karasuyama
PRIM E URBAN Karasuyama Galleria
PRIM E URBAN Karasuyama Court
PRIM E URBAN Chitose Funabashi
PRIM E URBAN Shinagawa Nishi
PRIM E URBAN Osaki
PRIM E URBAN Omori
PRIM E URBAN Kita Senzoku
PRIM E URBAN Denenchofu M inami
PRIM E URBAN Nakano Kamitakada
PRIM E URBAN Nishi Ogikubo
PRIM E URBAN Otsuka
PRIM E URBAN M onzen Nakacho
PRIM E URBAN Kameido
PRIM E URBAN Sumiyoshi
PRIM E URBAN Kinshi Koen
PRIM E URBAN Kinshicho
PRIM E URBAN Hirai
PRIM E URBAN Kasai
PRIM E URBAN Kasai II
PRIM E URBAN Shinyurigaoka
PRIM E URBAN Urayasu
PRIM E URBAN Gyotoku I
PRIM E URBAN Gyotoku II
PRIM E URBAN Gyotoku Ekimae
PRIM E URBAN Nishi Funabashi
PRIM E URBAN Kawaguchi
URBAN STAGE Azabu Juban
URBAN STAGE Shibaura LOFTURBAN STAGE Hatagaya
URBAN STAGE Kachidoki
URBAN STAGE Shinkawa
URBAN STAGE Nihonbashi Yokoyamacho
URBAN STAGE Hongo Ikizaka
URBAN STAGE Naka Ochiai
URBAN STAGE Ochiai
URBAN STAGE Shinjuku Ochiai
URBAN STAGE M ejiro
URBAN STAGE Roka Koen
URBAN STAGE Kamiuma
URBAN STAGE Sangen Jaya
URBAN STAGE Chitose Karasuyama
URBAN STAGE Sangen Jaya II
URBAN STAGE Komazawa
URBAN STAGE Karasuyama
URBAN STAGE Kamikitazawa
URBAN STAGE Yoga
URBAN STAGE Oimachi
URBAN STAGE Oimachi II

Location
M inato-ku, Tokyo
Shibuya-ku, Tokyo
Shibuya-ku, Tokyo
Shibuya-ku, Tokyo
M eguro-ku, Tokyo
M eguro-ku, Tokyo
Chuo-ku, Tokyo
Shinjuku-ku, Tokyo
Shinjuku-ku, Tokyo
Shinjuku-ku, Tokyo
Setagaya-ku, Tokyo
Ota-ku, Tokyo
Ota-ku, Tokyo
Toshima-ku, Tokyo
Koto-ku, Tokyo
Koto-ku, Tokyo
Koto-ku, Tokyo
Nerima-ku, Tokyo
Taito-ku, Tokyo
Yokohama-shi, Kanagawa
Yokohama-shi, Kanagawa
Yokohama-shi, Kanagawa
M inato-ku, Tokyo
M inato-ku, Tokyo
Shibuya-ku, Tokyo
Chiyoda-ku, Tokyo
Chiyoda-ku, Tokyo
Chiyoda-ku, Tokyo
M eguro-ku, Tokyo
M eguro-ku, Tokyo
M eguro-ku, Tokyo
M eguro-ku, Tokyo
M eguro-ku, Tokyo
M eguro-ku, Tokyo
Bunkyo-ku, Tokyo
Shinjuku-ku, Tokyo
Shinjuku-ku, Tokyo
Shinjuku-ku, Tokyo
Shinjuku-ku, Tokyo
Shinjuku-ku, Tokyo
Setagaya-ku, Tokyo
Setagaya-ku, Tokyo
Setagaya-ku, Tokyo
Setagaya-ku, Tokyo
Setagaya-ku, Tokyo
Shinagawa-ku, Tokyo
Shinagawa-ku, Tokyo
Ota-ku, Tokyo
Ota-ku, Tokyo
Ota-ku, Tokyo
Nakano-ku, Tokyo
Suginami-ku, Tokyo
Toshima-ku, Tokyo
Koto-ku, Tokyo
Koto-ku, Tokyo
Koto-ku, Tokyo
Sumida-ku, Tokyo
Sumida-ku, Tokyo
Edogawa-ku, Tokyo
Edogawa-ku, Tokyo
Edogawa-ku, Tokyo
Kawasaki-shi, Kanagawa
Urayasu-shi, Chiba
Ichikawa-shi, Chiba
Ichikawa-shi, Chiba
Ichikawa-shi, Chiba
Funabashi-shi, Chiba
Kawaguchi-shi, Saitama
M inato-ku, Tokyo
M inato-ku, Tokyo
Shibuya-ku, Tokyo
Chuo-ku, Tokyo
Chuo-ku, Tokyo
Chuo-ku, Tokyo
Bunkyo-ku, Tokyo
Shinjuku-ku, Tokyo
Shinjuku-ku, Tokyo
Shinjuku-ku, Tokyo
Shinjuku-ku, Tokyo
Setagaya-ku, Tokyo
Setagaya-ku, Tokyo
Setagaya-ku, Tokyo
Setagaya-ku, Tokyo
Setagaya-ku, Tokyo
Setagaya-ku, Tokyo
Setagaya-ku, Tokyo
Setagaya-ku, Tokyo
Setagaya-ku, Tokyo
Shinagawa-ku, Tokyo
Shinagawa-ku, Tokyo

Acquisition Price(thousands of yen)
3,510,000
1,100,000
865,000
800,000
812,000
882,000
2,260,000
1,540,000
1,110,000
1,010,000
1,350,000
1,140,000
2,980,000
695,000
900,000
650,000
1,130,000
1,370,000
1,960,000
2,340,000
2,770,000
1,430,000
956,000
941,000
408,000
1,170,000
707,000
2,030,000
1,200,000
1,320,000
886,000
536,000
464,000
3,580,000
893,000
1,700,000
1,290,000
1,000,000
512,000
503,000
835,000
840,000
645,000
413,000
885,000
624,000
1,700,000
824,000
576,000
900,000
640,000
435,000
794,000
2,200,000
705,000
552,000
1,180,000
668,000
700,000
637,000
958,000
1,210,000
840,000
635,000
741,000
476,000
772,000
2,170,000
991,000
1,510,000
452,000
2,290,000
2,250,000
3,530,000
647,000
655,000
324,000
635,000
1,260,000
362,000
900,000
755,000
730,000
539,000
396,000
344,000
738,000
1,150,000
530,000
1,100,000

1－4－
-3-

Percentage
of Total (%)
2.3
0.7
0.6
0.5
0.5
0.6
1.5
1.0
0.7
0.7
0.9
0.8
2.0
0.5
0.6
0.4
0.7
0.9
1.3
1.6
1.8
0.9
0.6
0.6
0.3
0.8
0.5
1.3
0.8
0.9
0.6
0.4
0.3
2.4
0.6
1.1
0.9
0.7
0.3
0.3
0.6
0.6
0.4
0.3
0.6
0.4
1.1
0.5
0.4
0.6
0.4
0.3
0.5
1.5
0.5
0.4
0.8
0.4
0.5
0.4
0.6
0.8
0.6
0.4
0.5
0.3
0.5
1.4
0.7
1.0
0.3
1.5
1.5
2.3
0.4
0.4
0.2
0.4
0.8
0.2
0.6
0.5
0.5
0.4
0.3
0.2
0.5
0.8
0.4
0.7

Leasable Floor Area(sqm)
2,950.11
1,151.34
958.98638.70934.39855.23
3,055.21
1,793.43
1,450.91
1,102.20
1,277.82
1,541.64
4,051.72
752.091,209.56
830.55
1,191.08
2,222.05
2,685.39
3,118.12
4,872.17
2,219.74
1,062.05
1,107.36
439.56
1,277.04
793.872,087.70
1,444.40
1,302.42
1,008.39
655.27453.772,955.74
1,069.82
1,759.11
1,459.86
1,162.55
578.18507.11
874.15
1,049.73
835.05576.201,027.44
961.252,106.16
1,190.70
834.901,100.17
818.75543.09944.993,207.92
1,117.34
813.52
1,886.50
991.62
1,095.91
905.81
1,437.84
1,708.19
1,264.84
1,151.36
1,244.00
778.191,237.80
2,477.11
1,222.13
1,905.39
650.604,524.00
3,600.61
5,926.17
662.581,237.98
517.53
1,053.39
1,755.52
567.201,739.86
1,018.72
1,774.01
810.98572.41507.52
1,384.45
1,773.05
722.701,782.26

Leasable Units(units)
106
44
31
30
41
40
110
70
60
41
48
67
169
35
55
35
55
94
79
113
200
81
25
48
19
52
32
90
29
49
32
22
24
99
42
51
60
46
14
28
33
41
33
23
38
46
99
54
46
44
33
24
46
118
52
40
77
49
53
45
68
64
60
52
58
37
60
98
40
68
38
145
46
124
27
18
32
28
65
34
37
47
27
17
26
28
29
54
45
93

Occupancy Rate
(M ay 2013)(%)
96.7
98.0
93.7
93.3
100.0
100.0
97.9
100.0
97.0
97.1
92.3
91.4
94.7
100.0
100.0
92.1
100.0
100.0
94.3
93.2
100.0
97.1
100.0
94.0
96.0
91.1
100.0
95.7
100.0
100.0
91.0
84.7
100.0
99.1
92.2
97.8
100.0
95.7
100.0
100.0
94.2
92.8
88.0
87.0
97.5
95.9
96.0
98.1
95.7
90.0
100.0
95.7
100.0
96.7
100.0
87.5
98.7
100.0
92.5
97.8
95.6
100.0
96.7
98.1
100.0
91.9
96.7
100.0
100.0
95.9
100.0
90.7
94.8
95.9
96.3
100.0
97.0
100.0
88.1
97.1
96.4
95.1
96.2
91.3
82.2
100.0
90.5
93.0
100.0
94.2

#
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92
93
94
95
96
97
98
99
100
101
102
103
104
105
106
107
108
109
110
111
112
113
114
115
116
117
118
119
120
121
122
123
124
125
126
127
128
129
130
131
132
133
134
135
136
137
138
139
140
141
142
143
144
145
146
147
148
149
150
151
152

Name of Property
URBAN STAGE Yukigaya
URBAN STAGE Ikegami
URBAN STAGE Nakano
URBAN STAGE Takaido
URBAN STAGE Komagome
URBAN STAGE M ukojima
URBAN STAGE Kasai East
URBAN STAGE Ekoda
URBAN STAGE Takinokawa
URBAN STAGE Itabashi Kuyakushomae
URBAN STAGE Asakusa
URBAN STAGE M achiya
URBAN STAGE M achiya South Court
URBAN STAGE Koganei
URBAN STAGE M usashi Koganei
URBAN STAGE M usashino Hills
URBAN STAGE Koganei Honcho
URBAN STAGE Hino
URBAN STAGE Kumegawa
URBAN STAGE M usashi Kosugi comodo
URBAN STAGE Kawasaki
URBAN STAGE Tsurumi Teraya
URBAN STAGE Urayasu
URBAN STAGE M inami Gyotoku II
URBAN STAGE M inami Gyotoku III
URBAN STAGE M inami Gyotoku IV
URBAN STAGE Gyotoku Ekimae
URBAN STAGE M inami Gyotoku V
URBAN STAGE Gyotoku
Greater Tokyo Area
PROUD FLAT Itsutsubashi
PROUD FLAT Kawaramachi
PROUD FLAT Shin Osaka
PRIM E URBAN Yamahana
PRIM E URBAN Kita Juyo Jo
PRIM E URBAN Odori Koen I
PRIM E URBAN Odori Koen II
PRIM E URBAN Kita Juichi Jo
PRIM E URBAN M iyanosawa
PRIM E URBAN Odori Higashi
PRIM E URBAN Chiji Kokan
PRIM E URBAN M aruyama
PRIM E URBAN Kita Nijuyo Jo
PRIM E URBAN Sapporo Idaimae
PRIM E URBAN Nagamachi Icchome
PRIM E URBAN Yaotome Chuo
PRIM E URBAN Aoi
PRIM E URBAN Kanayama
PRIM E URBAN Tsurumai
PRIM E URBAN Esaka I
PRIM E URBAN Esaka II
PRIM E URBAN Esaka III
URBAN STAGE Sapporo Riverfront
URBAN STAGE Kita Sanjo DoriURBAN STAGE Tsutsumidori Amamiya
URBAN STAGE Kamimaezu
URBAN STAGE Izumi
URBAN STAGE Tamatsukuri
Benefis Hakata Grand Suite
Benefis Yakuin M inami
Benefis Kashii Verbena
Benefis Hakata Higashi Grand Suite
Benefis Chihaya Grand Suite
Other Areas
Total

Location
Ota-ku, Tokyo
Ota-ku, Tokyo
Nakano-ku, Tokyo
Suginami-ku, Tokyo
Toshima-ku, Tokyo
Sumida-ku, Tokyo
Edogawa-ku, Tokyo
Nerima-ku, Tokyo
Kita-ku, Tokyo
Itabashi-ku, Tokyo
Taito-ku, Tokyo
Arakawa-ku, Tokyo
Arakawa-ku, Tokyo
Koganei-shi, Tokyo
Koganei-shi, Tokyo
Koganei-shi, Tokyo
Koganei-shi, Tokyo
Hino-shi, Tokyo
Higashimurayama-shi, Tokyo
Kawasaki-shi, Kanagawa
Kawasaki-shi, Kanagawa
Yokohama-shi, Kanagawa
Urayasu-shi, Chiba
Ichikawa-shi, Chiba
Ichikawa-shi, Chiba
Ichikawa-shi, Chiba
Ichikawa-shi, Chiba
Ichikawa-shi, Chiba
Ichikawa-shi, Chiba
Sendai-shi, M iyagi
Sendai-shi, M iyagi
Osaka-shi, Osaka
Sapporo-shi, Hokkaido
Sapporo-shi, Hokkaido
Sapporo-shi, Hokkaido
Sapporo-shi, Hokkaido
Sapporo-shi, Hokkaido
Sapporo-shi, Hokkaido
Sapporo-shi, Hokkaido
Sapporo-shi, Hokkaido
Sapporo-shi, Hokkaido
Sapporo-shi, Hokkaido
Sapporo-shi, Hokkaido
Sendai-shi, M iyagi
Sendai-shi, M iyagi
Nagoya-shi, Aichi
Nagoya-shi, Aichi
Nagoya-shi, Aichi
Suita-shi, Osaka
Suita-shi, Osaka
Suita-shi, Osaka
Sapporo-shi, Hokkaido
Sapporo-shi, Hokkaido
Sendai-shi, M iyagi
Nagoya-shi, Aichi
Nagoya-shi, Aichi
Osaka-shi, Osaka
Fukuoka-shi, Fukuoka
Fukuoka-shi, Fukuoka
Fukuoka-shi, Fukuoka
Fukuoka-shi, Fukuoka
Fukuoka-shi, Fukuoka

Acquisition Price(thousands of yen)
970,000
1,460,000
472,000
1,080,000
412,000
487,000
940,000
385,000
287,000
940,000
350,000
210,000
1,740,000
229,000
2,390,000
1,590,000
725,000
319,000
1,370,000
2,150,000
1,150,000
457,000
277,000
285,000
263,000
256,000
561,000
293,000
948,000
122,339,000
682,000
724,000
1,430,000
377,000
336,000
530,000
322,000
600,000
576,200
424,000
337,900
283,200
503,700
731,600
1,110,000
428,000
724,000
632,000
1,189,096
672,000
790,000
1,535,000
3,500,000
1,450,000
969,000
1,250,000
2,800,000
906,000
830,000
351,000
396,000
693,000
545,000
28,627,696
150,966,696

1－5－
-4-

Percentage ofTotal (%)
0.6
1.0
0.3
0.7
0.3
0.3
0.6
0.3
0.2
0.6
0.2
0.1
1.2
0.2
1.6
1.1
0.5
0.2
0.9
1.4
0.8
0.3
0.2
0.2
0.2
0.2
0.4
0.2
0.6
81.0
0.5
0.5
0.9
0.2
0.2
0.4
0.2
0.4
0.4
0.3
0.2
0.2
0.3
0.5
0.7
0.3
0.5
0.4
0.8
0.4
0.5
1.0
2.3
1.0
0.6
0.8
1.9
0.6
0.5
0.2
0.3
0.5
0.4
19.0
100.0

Leasable Floor Area(sqm)
1,536.59
2,456.48
801.301,746.20
991.94
1,108.91
1,884.62
872.49554.391,742.64
876.70455.194,141.56
682.43
5,999.80
2,961.06
1,604.72
994.682,610.05
3,692.44
1,706.46
952.06437.94611.61
542.69535.08927.33662.68
1,766.47
177,732.73
1,861.56
1,967.54
2,990.68
1,518.58
1,155.60
1,850.20
1,148.72
1,851.39
2,114.53
1,494.36
1,007.30
911.07
1,773.90
2,439.90
3,411.24
1,380.21
1,571.04
1,391.02
2,502.11
1,189.12
1,392.00
2,151.67
15,459.57
5,094.29
4,251.91
3,541.43
7,543.10
2,373.10
2,176.23
897.84
1,222.34
1,854.13
1,740.70
85,228.38
262,961.11

Leasable Units(units)
94
95
51
107
22
55
78
35
29
68
22
26
77
27
98
80
43
54
91
56
80
50
27
37
33
32
46
38
77
6,553
60
64
112
33
36
53
36
60
54
36
42
27
36
58
60
43
46
58
104
48
57
79
310
114
65
101
250
80
67
34
39
65
48
2,375
8,928

Occupancy Rate
(M ay 2013)(%)
93.6
93.9
100.0
95.4
92.2
98.2
100.0
97.5
100.0
93.9
97.0
100.0
94.2
100.0
98.0
86.9
97.9
88.9
99.1
100.0
100.0
97.6
92.6
64.9
100.0
93.8
100.0
90.0
98.7
96.1
97.8
100.0
96.5
94.0
96.8
100.0
100.0
98.3
96.2
100.0
100.0
96.3
97.2
96.0
100.0
100.0
88.4
100.0
96.2
93.8
94.0
92.7
97.2
97.0
100.0
98.1
95.4
97.5
96.2
100.0
94.4
98.7
97.9
97.2
96.4

Profile of the Asset Management Company
As of October 1, 2011, Nomura Real Estate Asset Management Co., Ltd. (NREAM) was merged with Nomura Real Estate
Investment Management Co., Ltd. (NREIM) and Nomura Real Estate Capital Management Co., Ltd. (NRECM), with a change of its
Japanese trade name from Nomura Fudosan Toshin to Nomura Fudosan Toshi Komon. We believe that the Company can benefit
from various synergy effects from this merger including the ability to quickly respond to changes in the real estate and financial
markets, the enhancement of expertise and experience necessary for real estate investment, and the ability to provide asset
management services through one of the largest real estate asset management companies in Japan.

Company: Nomura Real Estate Asset Management Co., Ltd.
Capital: ¥300 million (as of May 31, 2013)
Shareholder : Nomura Real Estate Holdings, Inc. (100%)
Incorporation : January 24, 2003

Statutory Auditors

Corporate Planning
Legal & ComplianceInternal Audit
Fund Management
Investment Management Planning

President & CEO

Board of Directors

Client Relations & Marketing
Research & Analysis Section
Investment Performance Analysis Section
Acquisitions
Asset Management
Investment Management
New Products & Marketing
Finance
Accounting

Project Screening Committee

NPR Valuation Committee

Risk Management Committee

Compliance Committee

Chief Investment Officer, NOF

Investment Committee

General Meeting of Shareholders

Board of Statutory Auditors

・Organization of the asset management company

Chief Investment Officer, NRF
Chief Investment Officer, NPR
Chief Investment Officer, NMF
Chief Investment Officer, Private Fund Ⅰ
Chief Investment Officer, Private Fund Ⅱ
Chief Investment Officer, Private Fund Ⅲ
Chief Investment Officer, Private Fund Ⅳ
Chief Investment Officer, Investment Advisory

1－6－
-5-

Performance Report

Contents
Asset Management Report
Profile of the Company
Status of Investment Assets of the Company
Capital Expenditures
Expenses and Liabilities
Trading during the 13th fiscal period
Other Information

7
13
15
25
26
31
34

-6-

Asset Management Report
1. CHANGES IN KEY INDICATORS
13th Period
from Dec. 1, 2012
to May 31, 2013

12th Period
from Jun. 1, 2012
to Nov. 30, 2012

11th Period
from Dec. 1, 2011
to May 31, 2012

10th Period
from Jun. 1, 2011
to Nov. 30, 2011

9th Period
from Dec. 1, 2010
to May 31, 2011

Operating Revenues(¥mln)

5,257

5,174

5,250

4,445

4,510

of which Real Estate Rental Revenues(¥mln)

5,238

5,174

5,241

4,445

4,497

Operating Expenses(¥mln)

2,823

2,721

2,743

2,346

2,333

of which Real Estate Rental Expenses(¥mln)

2,252

2,131

2,188

1,824

1,838

Operating Profit(¥mln)

2,433

2,452

2,507

2,098

2,177

Ordinary Income(¥mln)

1,878

1,876

1,857

1,479

1,553

Net Income(¥mln)

1,876

1,875

1,856

1,477

1,465

Total Assets(¥mln)

156,576

156,703

156,780140,152

140,534(%)（△0.1）（△ 0.0）（＋11.9）（△0.3）（△0.1）

Interest-Bearing Debts(¥mln)

83,002

83,092

83,182

74,216

74,606

Net Assets(¥mln)

70,83870,83670,81863,27763,265(%)（＋0.0）（＋0.0）（＋11.9）（＋0.0）（△0.1）(Changes from Previous Period)(Changes from Previous Period)
Unitholders’ Capital(¥mln)

68,961

68,961

68,961

61,79961,799Number of Units Issued(Units)150,936

150,936

150,936

125,535

125,535

Net Assets per Unit(¥)

469,326

469,315

469,193504,059

503,963

Total Cash Distribution(¥mln)

1,836

1,875

1,856

1,477

1,465

Cash Distribution per Unit(¥)

12,17012,424

12,302

11,77011,674of which Cash Distribution of Profits(¥)

12,17012,424

12,302

11,77011,674of which Cash Distribution in excess of Profits

(¥)

－

－

－

－

－

ROA (Return on Assets) (Note 1)

(%)

1.2

1.2

1.2

1.1

1.1

Annualized ROA (Note 2)

(%)

2.4

2.4

2.4

2.1

2.2

ROE (Return on Equity) (Note 3)

(%)

2.6

2.6

2.6

2.3

2.3

Annualized ROE (Note 2)

(%)

5.3

5.3

5.2

4.7

4.6

Capital Adequacy Ratio (Note 4)

(%)

45.2

45.2

45.2

45.1

45.0

(%)

（＋0.0）（＋0.0）（＋0.0）（＋0.1）（△0.0）LTV (Loan-to-Value) (Note 5)

(%)

53.0

53.0

53.1

53.0

53.1

Number of Operating Days

(days)

182

183

183

183

182

Payout Ratio (Note 6)

(%)

97.8

99.9

99.9

100.0

99.9

(Changes from Previous Period)

Number of Properties Held(bldgs)

152

153

152

145

143

Total Leasable Floor Space(㎡)

262,961.11

262,881.53

261,275.90

220,129.28

214,215.90

Number of Tenants(tenants)

152

153

152

145

143

Occupancy Rate

(%)

96.4

96.2

96.2

96.8

96.1

Depreciation(¥mln)

967

968

963

804

793

Capital Expenditures(¥mln)

138

40

41

45

49

NOI (Net Operating Income) (Note 7)(¥mln)

3,953

4,010

4,016

3,424

3,452

FFO (Funds from Operation) (Note 8)(¥mln)

2,833

2,850

2,818

2,285

2,251

(¥)

18,773

18,886

18,671

18,207

17,931

FFO per Unit (Note 9)

Note 1: “ROA (Return on Assets)” = Ordinary Income / {(Total Assets at the beginning of the period + Total Assets at the end of the period) / 2} x 100
As for 11th period, the Total Assets were time-adjusted due to the additional issuance of investment units.
Note 2: “ROA” and “ROE” are annualized using the following number of operating days. 9th Period: 182 days, 10th Period: 183 days, 11th Period: 183 days, 12th Period: 183 days, and 13th
Period: 182 days.
Note 3: “ROE (Return on Equity)” = Net Income / {(Net Assets at the beginning of the period + Net Assets at the end of the period) / 2} x 100
As for 11th period, Net Assets were time-adjusted due to the additional issuance of investment units.
Note 4: “Capital Adequacy Ratio” = Net Assets / Total Assets x 100
Note 5: “LTV (Loan-to-Value)” = Interest-Bearing Debts / Total Assets x 100
Note 6: Rounded off to the first decimal place.
Note 7: “NOI (Net Operating Income)” = Real Estate Rental Revenues – Real Estate Rental Expenses + Depreciation
Note 8: “FFO (Funds from Operation) = Net Income + Depreciation + Amortization of Investment Corporation Bonds Issuance Costs – Real Estate Sale Profit/Loss
Note 9: “FFO per Unit” = FFO / Number of Units Issued-7-2. OUTLINE OF INVESTMENTS IN THE 13TH FISCAL PERIOD
Nomura Real Estate Residential Fund was incorporated on August 3, 2006 under the Act on Investment Trusts and Investment
Corporations of Japan, and listed Investment Securities that represent the units of investment equity of the Company in the Real
Estate Investment Trust (REIT) Market of the Tokyo Stock Exchange (TSE) on February 14, 2007 (TSE code: 3240).
The Company’s basic investment policy is to assure stable income and steady portfolio asset growth over the
medium-to-long-term through investment in specified assets such as properties and property-related securities.
We invest in properties with a focus on residential use in accordance with the Company’s basic policy (securities specified
for residential properties). In addition, in order to realize stable income over the medium-to-long term, we carry out expeditious
asset management according to property characteristics and market conditions (medium-to-long term stable management).
Note:
The Law Concerning Investment Trusts and Investment Corporations of Japan (Law No. 198 of 1951) is referred to as the "Investment Trust Law" hereinafter.
The Tokyo Stock Exchange is referred to hereinafter as the “TSE”.
The units of investment equity means the units of investment equity of the Company.
The term “property (ies)” refers to those assets defined in Section 29, Paragraph 1, Article (1) and (2), and “property-backed securities” refers to those assets defined in Section 29,
Paragraph 1, Article (3) respectively of the Articles of Incorporation of the Company.
The terms “property (ies)” and “property-backed securities” are collectively referred to as “property-related assets” hereinafter.
The properties and underlying properties of the property-related assets are collectively referred to as the “investment properties”.
The term “investment assets” refers to those assets that belong to the Company.

(1) Market Environments and fund performance
In the Japanese economy, in addition to the European debt crisis, such other factors as delay in U.S. economic recovery anddeceleration of Chinese economic growth led to slowdown in exports and industrial production, resulting in weak economic
performance. However, backed by various measures for pulling out of deflation and realizing sustainable economic growth fromthe change of government at the end of 2012, the weaker yen and higher stock prices led to improvement in the economic
sentiment and export environment, and the Japanese economy is thus anticipated to get back on the path to recovery. In addition,with Bank of Japan’s June 2013 Short-Term Economic Survey of Enterprises in Japan (Tankan) finding the business conditions
DI for large manufacturing enterprises improving 12 points compared with the previous survey and an improvement of 6 points
being projected as the outlook for three months later, future recovery in corporate business performance is forecast.
In the rental housing market, increase in single households and small households due to population inflow, trends of latemarriages and declining birth rates, etc. in the Greater Tokyo Area (Tokyo, Kanagawa, Chiba and Saitama prefectures) anddecrease in supply of newly-built properties in Other Areas, among other factors, led to a high occupancy rate being maintained,
centering on properties with excellent locations and properties with excellent merchantability. Rent increases were found atsome of the properties with market competitiveness and there were other factors showing signs of the rent level bottoming out
in certain areas.
In the real estate investment market, cases of postponement or suspension of transactions in the wake of the Great East
Japan Earthquake, as well as widening of the price gap between buyers and sellers, led to transactions continuing to be on aweak note. In addition, contrary to the real estate investment market’s stagnation, the financial environment maintained its
relatively good status. Due in part to this, there were often found to be such cases as those where refinancing is selected rather
than selling portfolio properties even upon the end of the investment period of real estate private funds. However, withexpectation for growth of the Japanese economy backed by various measures for pulling out of deflation and realizing
sustainable economic growth from the change of government at the end of 2012, signs of a recovery trend in the real estate
investment market and increase in the volume and amount of transactions by listed J-REITs are starting to be seen.
The listed J-REIT market is showing a recovery trend as economic recovery and Bank of Japan’s purchases of J-REIT
investment units, etc. led to supply-demand improvement. Under such circumstances, there was a series of new J-REIT listingsand capital increases through public offering by existing J-REITs.
In the management environment described above, the 13th fiscal period (ended May 2013) realized the following
management achievements.

-8-

(a) Asset Acquisition
The Company has fully utilized the strong sourcing routes of each property brand listed in the table below, and has continued
acquisition activities.
Brand

Acquisition Strategy

PROUD FLAT

Strategic Cooperation with Nomura Real Estate Development

Properties planned/developmentby Nomura Real Estate Development

The strategic cooperation with Nomura Real Estate Development enables theFund to undertake the development and acquisition of PROUD FLAT, aresidential property brand, which utilizes residential property related
know-how for land acquisition, product planning, management, etc. This
plays the pivotal role of the Fund’s growth strategy and the Fund will utilize itto the full extent.

PRIME URBAN

Properties planned/developed by companies
other than Nomura Real Estate Development＜Age of Building: Approx.1year or, less＞

Utilization of Networks with Providers Utilizationof Nomura Real Estate Group Information Networks

URBAN STAGE

Proactively utilizing the network with providers built through the
management of private funds which extends over 5 years and the Fund’s
management which extends over 6 years. By utilizing the expansive
brokerage network held by Nomura Real Estate Group, pursuit of collecting
adequate information on properties for selling will be fulfilled.

Properties planned/developed by companies
other than Nomura Real Estate Development＜Age of Building: Approx.1year or, more＞
Note:
We implemented an acquisition strategy for properties other than the above-mentioned three in accordance with that implemented for PRIME URBAN and URBAN STAGE.
Hereinafter, Nomura Real Estate Development refers to Nomura Real Estate Development Co., Ltd. Nomura Real Estate Group refers to a corporate group consisting of theconsolidated subsidiaries of Nomura Real Estate Holdings, Inc. (hereinafter referred to as “Nomura Real Estate Holdings”) including Nomura Real Estate Development (hereinafterreferred to as “NRED”) but excluding Nomura Real Estate Asset Management Co., Ltd., to which the Company assigns asset management- related operations.
Age of buildings above means that of the relevant property at the time of acquisition by the Company.

The promotion of property replacement for the purpose of enhancement of portfolio profitability and quality that theCompany has been implementing in previous fiscal periods was continued into the 13th fiscal period. In the 13th fiscal
period, the Company sold URBAN STAGE Toritsu Daigaku (Meguro-ku, Tokyo; transfer price: 564 million yen) and
URBAN STAGE Minami Gyotoku I (Ichikawa-shi, Chiba; transfer price: 365 million yen) on the one hand, and acquired
URBAN STAGE Mejiro (Shinjuku-ku, Tokyo; acquisition price: 1,260 million yen) on the other to achieve enhancement of
portfolio profitability and quality.
As a result of the above, the size of assets at the end of the 13th fiscal period (as of May 31, 2013) was 152 properties
amounting to 150,966 million yen (sum total of acquisition prices).

-9-

(b) Property Management
In terms of property management, since the 13th fiscal period was a period that included the end of the fiscal year when
tenant turnover is high, the Company conducted property management with a view to maintaining the 12th fiscal period’s
high occupancy status.
In leasing, the Company achieved increase in revenues by raising the unit price of rent through flexible review ofadvertising terms and conditions in light of the status of individual properties and by implementing construction work for
splitting a large residential unit. In addition, such efforts as shortening the vacancy period through management of the periodof construction work for restoration of properties to their original state, which the Company has been implementing, proved
effective in maintaining a high occupancy status with the portfolio occupancy rate at the end of the fiscal period at 96.4%.
In addition, the property management companies (hereinafter referred to as the “PM companies”) for 23 of theproperties under management in the Greater Tokyo Area were changed to Nomura Living Support Co., Ltd., effective
December 1, 2012. The addition of these properties brings the number of properties at which Nomura Living Support Co.,
Ltd.’s services for tenants “Chintai Hotto Support” (24-hour call center for trouble with equipment within residential units
and other emergency matters; travel, leisure and other special benefits, etc.) have been introduced to a total of 65 properties,
which the Company believes will serve to enhance tenant satisfaction and property competitiveness.
In this manner, following on from previous fiscal periods, the Company continued to strive to enhance earnings
through such means as appropriately meeting market needs, maintaining and enhancing occupancy rates, increasing
incidental income and reducing expenses.
(c) Status of Funding
In order to assure stable income and the steady growth of portfolio assets over the medium-to-long-term, the Company
undertook conservative financial strategies in the 13th fiscal period as shown below.
Regarding refinancing of 1,600 million yen and 5,500 million yen in existing loans, these were refinanced into four
long-term loans with fixed interest rates (including those for which the interest rate was fixed through interest rate swap
transactions) to achieve lengthening of loan periods and fixing of interest rates of interest-bearing debt and thereby
enhancing financial stability and addressing the risk of rising interest rates.
As a result, the ratio of long-term debt is 81.1%, the ratio of fixed interest debt (including fixation through interest
rate swap transactions) is 89.9%, the average maturity of the outstanding interest-bearing debt is 2.78 years (the average
maturity of the outstanding long-term interest-bearing debt is 3.30 years). In the end, the rate of interest-bearing debt in the
total assets, which is the loan-to-value (LTV) ratio, becomes 53.0%.
The table below shows the credit ratings of the Company as of the end of the 13th fiscal period.
Rating Company
Japan Credit Rating Agency, Ltd

Standard & Poor’s Ratings Japan K.K.

RatingOutlookLong-term Senior Debt Rating：AA

StableLong-term corporate credit rating：A

StableShort-term Corporate Credit Rating ：A-1－(d) Financial Performance and Distributions
As a result of the above-described management during the 13th fiscal period, the Company recorded 5,257 million yen in
operating revenue, 2,433 million yen in operating profit, 1,878 million yen in ordinary income, and 1,876 million yen in net
income. Concerning cash distributions in the 13th fiscal period, by applying special provisions of the tax system (Article
67-15 of the Act on Special Measures Concerning Taxation (Act No. 26 of 1957)), along with utilizing the “Special
Provisions for Taxation in the Event of Advance Acquisition of Land, etc. in 2009 and 2010” under Article 66-2 of the Act
on Special Measures Concerning Taxation, the Company decided that an amount of a portion of the gain on transfer of land,
etc. earned in a transfer of property shall be set aside as a reserve for reduction entry within the limit that taxable income will
not generate in the fiscal period. In addition, in order to have the maximum amount of distributions of earnings included indeductible expenses, the Company decided to distribute almost the entire amount of unappropriated retained earnings after
deduction of the reserve for reduction entry. As a result, the Company declared cash distribution per unit of investment
equity of 12,170 yen.

- 10 -

3. STATUS OF CAPITAL
Changes in the number of units issued and unitholders’ Capital until the end of the 13th fiscal period (as of May 31, 2012) are as
follows:
Date

Number of Units Issued (Unit)
ChangeBalance
400

Type of Issue

Unitholders’ Capital (¥ mln)
ChangeBalance240Aug. 3, 2006

Initial private placement (Note 1)

Sep. 26, 2006

Private Offering (Note 2)

17,93018,330400

10,758

10,998240

Feb.13 , 2007
Mar.13, 2007

Public offering (Note 3)
Third-party allotment (Note 4)

47,4002,370

65,73068,10028,816
1,440

39,814
41,255

Feb.13, 2008
Mar.11, 2008

Public offering (Note 5)
Third-party allotment (Note 6)

27,3001,365

95,40096,765

11,918595

53,17353,769Dec. 7, 2009
Dec.24, 2009

Public offering (Note 7)
Third-party allotment (Note 8)

27,4001,370

124,165
125,535

7,647
382

61,417
61,799Dec. 1, 2011

Public offering (Note 9)23,629149,164

6,662

68,461

Dec.20, 2011

Third-party allotment (Note 10)

1,772

150,936

499

68,961

Note1: Investment units were issued at issue price of 600,000 yen per unit upon establishment of the Fund.
Note2: Additional investment units were issued at the price of 600,000 yen per unit for the purpose of financing acquisition of new properties, etc. Asset management commenced.
Note3: Additional investment units were issued at 630,000 yen per unit (subscription price: 607,950 yen) in a public offering, for the purpose of financing acquisition of new properties andrepayment of debt.
Note4: In conjunction with the public offering on February 13, 2007, investment units were allocated to Nomura Securities Co., Ltd., at 607,950 yen per unit issue price.
Note5: Additional investment units were issued at 451,780 yen per unit (subscription price: 436,567 yen) in a public offering, for the purpose of financing repayment of debt.
Note6: In conjunction with the public offering on February 13, 2008, investment units were allocated to Nomura Securities Co., Ltd., at 436,567 yen per unit issue price.
Note7: Additional investment units were issued at 289,545 yen per unit (subscription price: 279,097 yen) in a public offering, for the purpose of financing acquisition of new properties andrepayment of debt.
Note8: In conjunction with the public offering on December 7, 2009, investment units were allocated to Nomura Securities Co., Ltd., at 279,097 yen per unit issue price.
Note9: Additional investment units were issued at 292,193 yen per unit (subscription price: 281,951 yen) in a public offering, for the purpose of financing acquisition of new properties.
Note10: In conjunction with the public offering on December 1, 2011, investment units were allocated to Nomura Securities Co., Ltd., at 281,951 yen per unit issue price.

[Changes in Price at the Tokyo Stock Exchange]
Changes in prices of the Company’s investment units listed on the Tokyo Stock Exchange are as follows.

High

(¥)

13th Period
from Dec. 1, 2012
to May 31, 2013
670,000

Low(¥)

439,000

12th Period
from Jun. 1, 2012
to Nov. 30, 2012
493,000

11th Period
from Dec. 1, 2011
to May 31, 2012
440,000

10th Period
from Jun. 1, 2011
to Nov. 30, 2011
465,000

9th Period
from Dec. 1, 2010
to May 31, 2011
500,000

372,000

312,500

308,000

359,000

4. CASH DISTRIBUTION
Concerning cash distributions in the 13th fiscal period, by applying special provisions of the tax system (Article 67-15 of the Act
on Special Measures Concerning Taxation (Act No. 26 of 1957)), along with utilizing the “Special Provisions for Taxation in the
Event of Advance Acquisition of Land, etc. in 2009 and 2010” under Article 66-2 of the Act on Special Measures Concerning
Taxation, the Company decided that an amount of a portion of the gain on transfer of land, etc. earned in a transfer of property shallbe set aside as a reserve for reduction entry within the limit that taxable income will not generate in the fiscal period. In addition, inorder to have the maximum amount of distributions of earnings included in deductible expenses, the Company decided to distributealmost the entire amount of unappropriated retained earnings after deduction of the reserve for reduction entry. As a result, theCompany declared cash distribution per unit of investment equity of 12,170 yen.
13th Period
from Dec. 1, 2012
to May 31, 2013
1,876,958

12th Period
from Jun. 1, 2012
to Nov. 30, 2012
1,875,347

11th Period
from Dec. 1, 2011
to May 31, 2012
1,856,892

10th Period
from Jun. 1, 2011
to Nov. 30, 2011
1,477,597

9th Period
from Dec. 1, 2010
to May 31, 2011
1,465,558

Retained Earnings(¥000)

Accumulated earnings(¥000)

40,067

118

77

50

63

Total cash distribution(¥000)

1,836,891

1,875,228

1,856,814

1,477,546

1,465,495(Cash distribution per unit)of which distribution of profits(¥)(¥000)(12,170)
1,836,891(12,424)
1,875,228(12,302)
1,856,814(11,770)
1,477,546(11,674)
1,465,495(Distribution of profits per unit)of which refund of capital(¥)(¥000)(12,170)-(12,424)-(12,302)-(11,770)-(11,674)
-

(¥)

(-)

(-)

(-)

(-)

(-)

(Refund of capital per unit)- 11 -

5. INVESTMENT POLICY AND FUTURE ISSUESThe Japanese economy is anticipated to gradually head toward recovery, backed by improvement in the export environment, effectsof economic measures and monetary policies, etc. However, with downward swings in overseas economies serving as a risk of
downward swings in the Japanese economy, closer attention to future outlook is required.
In such a business environment, the Company will aim for the securing of stable revenues and steady growth of portfolio assets
over the medium to long term by conducting management that makes the most of the Company’s strengths.
(a) Property Acquisition
The Company has set the goal for the size of assets in the future at 300 billion yen in total assets. The Company willcontinue to strive to make selective investment by utilizing strong sourcing channels to obtain information on prime
properties at an early stage, while taking into consideration the financial composition. Through this, while further
diversifying the portfolio, along with maintaining a balance in terms of building age, etc. of portfolio assets, the Company
intends to promote the building of a portfolio that generates stable revenues over the medium to long term.
(b) Property Replacement
The Company will continue to implement property replacement in the portfolio for the purpose of enhancement of portfolio
quality and stabilization and enhancement of revenues over the medium to long term. Upon replacement, the funds earned
through the sale of properties in the portfolio will be used to fund the acquisition of new properties in order to maintain theconservative financial strategy.
(c) Property Management
The Company will continue to maintain and enhance revenues by promoting integrated management with PM companies
and establishing appropriate leasing strategies for each property on the one hand, while reducing costs as much as possible atinvestment properties on the other hand. This will realize maximization of performance.
The Company will maintain and enhance the competitiveness and profitability of investment properties byconsidering and implementing various measures for occupancy rate and cash flow enhancement through grasping of thecharacteristics of investment properties, analysis of market needs, etc., as well as by implementing timely and appropriate
large-scale repairs and remodeling work.
(d) Fund Procurement
The Company will continue to establish an appropriate financial base through appropriate control of the risk of interest rate
fluctuations by fixing interest rates and lengthening loan periods, as well as distribution of repayment dates, diversificationof lending financial institutions and fund procurement means, and unsecured and unguaranteed procurement. In addition, theCompany will continue to pursue a well-balanced composition of interest-bearing debt by considering and selecting the mostappropriate means of fund procurement from a range of options, while closely monitoring financial market trends.

6. IMPORTANT EVENTS SUBSEQUENT TO THE 13TH FISCAL PERIOD
Transfer of a Property
On June 27, 2013, the Company entered into a sale and purchase agreement regarding the transfer of the property stated below andcompleted the transfer. Consumption taxes and adjustments of property taxes are excluded from the transfer price.
PRIME URBAN Kita Senzoku
Type of Asset: Real estate
Date of Agreement: June 27, 2013
Transfer Date
: June 27, 2013
Transfer Price: ¥597 million
Transferee: Japanese general operating company
Impact on Revenues : Approximately ¥9 million (miscellaneous expenses excluded) of gain on sale of real estate will be recorded
for the 14th fiscal period (from June 1, 2013 to November 30, 2013).

- 12 -

Profile of the Company
1. STATUS OF UNITHOLDERS’ CAPITAL
13th Period(as of May 31, 2013)

12th Period(as of Nov. 30, 2012)

11th Period(as of May 31, 2012)

10th Period(as of Nov. 30, 2011)

9th Period(as of May 31, 2011)

Maximum number of units allowed
to issue(Unit)

2,000,000

2,000,000

2,000,000

2,000,000

2,000,000

Number of units issued(Unit)

150,936

150,936

150,936

125,535

125,535

Amount of unitholders’ capital(¥ mln)68,961

68,961

68,961

61,79961,79910,720

9,446

9,895

9,417

8,789

Number of unitholders

2. MATTERS CONCERNING THE INVESTMENT UNITS
The 10 largest unitholders as of May 31, 2013 were as follows.
Name

Number of Units Held (Unit)

Portion in the Total Units Issued (%)

Japan Trustee Services Bank, Ltd. （Trust Account）

29,188

19.34

Nomura Real Estate Development Co., Ltd.

15,24010.10

The Nomura Trust and Banking Co., Ltd. （Investment Account）

8,519

5.64

The Master Trust Bank of Japan, Ltd. （Trust Account）

7,049

4.67

Trust and Custody Services Bank, Ltd. (Securities Investment Trust Account)

6,035

4.00

Trust and Custody Services Bank, Ltd. （Money Trust Tax Account）

2,690

1.78

2,502

1.66

2,305

1.53

Mizuho Trust & Banking co., Ltd.

2,067

1.37

The Hokuriku Bank, Ltd.

1,689

1.12

77,284

51.20

The Joyo Bank, Ltd.
(Standing Proxy: The Master Trust Bank of Japan, Ltd.)
Nomura Bank (Luxembourg) S.A.
(Standing Proxy: Sumitomo Mitsui Banking Corporation)

Total

3. BREAKDOWN OF UNITHOLDERS
The breakdown of unitholders as of May 31, 2013 was as follows.
Number ofUnitholders
Private and other investors

Number of Units
per Unitholder

Portion (%)

Portion (%)

10,30796.1

30,845

20.4

Financial institutions(Including sales agents for financial instruments firm)

105

1.0

83,76955.5

Other domestic corporate investors

182

1.7

20,581

13.6

Foreign corporate investors, etc.

126

1.2

15,741

10.4

Total

10,720100.0

150,936

100.0- 13 -

4. DIRECTORS AND AUDITOR(1) Name of directors and an auditor in the 13th fiscal period are as follows (Note 1)
Title

Executive Director

Name

Masatomi Natsume

Supervisory Director

Eitoku Aikawa

Supervisory Director

Motoharu Yokose

Accounting Auditor

Earnst & Young ShinNihon LLC

Total Amount of Fees Paid
during the 13th Period(¥000)

Other Major Title(s)NRF Chief Investment Officer, Nomura Real Estate Asset Management, Co., Ltd.
Director, Fair Appraisers, K.K.
Supervisory Director, Nomura Real Estate Office Fund, Inc. (Note 2)
Advisor, Asahi Tax Corporation.
Auditor, YAMATO HOLDINGS CO., LTD.
––

－
2,400
2,400
11,200Note 1: No Executive Directors or Supervisory Directors are in possession of the Company’s investment units either under their own or another person’s name. Other companies at which
Supervisory Directors serve as directors have no mutual business interests whatsoever with the Company.
Note 2: Supervisory Director Eitoku Aikawa resigned as Director, Fair Appraisers, K.K. on December 15, 2012. And Supervisory Director Eitoku Aikawa resigned as a Supervisory Directorof Nomura Real Estate Office Fund, Inc. on December 31, 2012.
Note 3: Mr. Nobuyuki Hamada, Director and Executive Officer of Nomura Estate Asset Management Co., Ltd., which is the asset management company of the Company, has been appointed
as Substitute Executive Director to provide against vacancy of the Executive Director’s position or lack of statutory quorum.
Note 4: Mr. Saneaki Ichijo has been appointed as substitute Supervisory Director to provide against vacancy of the Supervisory Director’s position or lack of statutory quorum.

(2) Policy on Determining the Dismissal and Denial of Reappointment of Accounting Auditors
In case an item listed under Article 105, Paragraph 1 of the Investment Trust Law becomes applicable to the accounting auditor, andthe Board of Directors determines that there is no likelihood of improvement, the Board of Directors shall dismiss the accounting
auditor by unanimous vote of all board members.
In addition, if the Board of Directors determines that the accounting auditor is inappropriate for the position having given
thorough consideration to its execution of business and other factors, the Board of Directors shall dismiss or deny reappointment of
the accounting auditor, and present an agenda for appointment of a new accounting auditor at the General Unitholders’ Meeting.

5. ASSET MANAGEMENT COMPANY, CUSTODIANS AND ADMINISTRATORSBusiness

Company Name(s)Asset Management Company

Nomura Real Estate Asset Management Co., Ltd.

Custodian of assets

Mitsubishi UFJ Trust and Banking Corporation

Custodian of unitholders’ register

Mitsubishi UFJ Trust and Banking Corporation

Manager of special accounts

Mitsubishi UFJ Trust and Banking Corporation

General Administration (accounting, etc.)

Heiseikaikeisha(“HSK”) Tax Corporation

General Administration(Administrative work for organizational operation)

Mitsubishi UFJ Trust and Banking Corporation

General Administration (Financial agent.)

The Bank of Tokyo-Mitsubishi UFJ, Ltd., Sumitomo Mitsui Banking Corporation- 14 -

Status of Investment Assets of the Company
1. COMPOSITION OF ASSETS
Type of Assets
Real estate
Real estate in trust

12th Period (as of Nov. 30, 2012)
Total AmountPortion(¥ mln) (Note 1)(%) (Note 2)

13th Period (as of May 31, 2013)
Total AmountPortion(¥ mln) (Note 1)(%) (Note 2)

Area
Greater Tokyo Area

88,233

56.4

81,013

51.7

Other

26,84417.1

27,10917.3

Greater Tokyo Area

32,51020.8

39,770

25.4

Other

2,062

1.3

2,078

1.3

149,650

95.6

149,972

95.7

SubtotalCash, deposits and other assets

6,925

4.4

6,731

4.3

Grand Total

156,576100.0

156,703

100.0

Note 1: Total amount is taken from the balance sheet. (Real Estate and Real Estate in Trust represent the total book value after depreciation.)
Note 2: The percentage figures may not necessarily add up to 100 due to rounding to the nearest first decimal place.

2. BRIEF OF MAJOR PROPERTIES OWNED
The major component assets of the Company (the 10 largest properties by book value) as of the end of the 13th fiscal period are as
follows.
Name of Property

Book Value(¥ mln)Leasable Floor
Space (m2)

Leased Space(m2)

Occupancy Rate(%)

Portion of Rental
Revenues (%)

Primary Use

URBAN STAGE Sapporo Riverfront

3,656

15,459.57

15,031.90

97.2

3.6

Apartment building

PRIME URBAN Meguro Ohashi Hills

3,634

2,955.74

2,930.27

99.1

1.6

Apartment building

URBAN STAGE Nihonbashi Yokoyamacho

3,520

5,926.17

5,684.39

95.9

2.4

Apartment building

PROUD FLAT Shirokane Takanawa

3,434

2,950.11

2,851.44

96.7

1.8

Apartment building

URBAN STAGE Izumi

2,958

7,543.10

7,199.36

95.4

2.6

Apartment building

PROUD FLAT Kamata II

2,950

4,051.72

3,838.41

94.7

2.0

Apartment building

PROUD FLAT Kamiooka

2,625

4,872.17

4,872.17

100.0

1.9

Apartment building

URBAN STAGE Musashi Koganei

2,505

5,999.80

5,878.80

98.0

1.4

Apartment building

URBAN STAGE Kachidoki

2,280

4,524.00

4,102.64

90.7

1.8

Apartment building

PROUD FLAT Yokohama

2,261

3,118.12

2,906.08

93.2

1.4

Apartment building

Total

29,82857,400.50

55,295.46

96.3

20.5

- 15 -

3. DETAILS OF PORTFOLIO PROPERTIES
Area

Name of Property

PROUD FLAT Shirokane Takanawa

Location(Postal Address)

Type ofOwnership(Note 1)

Appraisal
Value as of May
31, 2013(¥ mln) (Note 2)

5-12-7 Mita, Minato-ku, Tokyo

Real estate

3,090

PROUD FLAT Yoyogi Uehara

3-25-7 Uehara, Shibuya-ku, Tokyo

Beneficial
Interest

895

PROUD FLAT Hatsudai

2-19-15 Hatsudai, Shibuya-ku, Tokyo

Real estate

661

PROUD FLAT Shibuya Sakuragaoka

21-8 Sakuragaoka, Shibuya-ku, Tokyo

Real estate

687

PROUD FLAT Gakugei Daigaku

2-21-20 Meguro Honcho, Meguro-ku, Tokyo

Real estate

749

PROUD FLAT Meguro Gyoninzaka

1-4-18 Shimo Meguro, Meguro-ku, Tokyo

Real estate

859

PROUD FLAT Sumida Riverside

1-31-7 Shinkawa, Chuo-ku, Tokyo

Real estate

2,200

PROUD FLAT Kagurazaka

1-11 Higashi Gokencho, Shinjuku-ku, Tokyo

Real estate

1,470

PROUD FLAT Waseda

521-9-5 Waseda Tsurumaki-cho, Shinjuku-ku, Tokyo

Real estate

1,030

PROUD FLAT Shinjuku Kawadacho

3-29 Kawadacho, Shinjuku-ku, Tokyo

Real estate

864

PROUD FLAT Sangen Jaya

1-4-25 Taishido, Setagaya-ku, Tokyo

Real estate

1,120

PROUD FLAT Kamata

4-21-4 Kamata, Ota-ku, Tokyo

Real estate

1,050

PROUD FLAT Kamata II

4-25-5 Kamata, Ota-ku, Tokyo

Real estate

3,110

PROUD FLAT Shinotsuka

3-12-10 Minami Otsuka, Toshima-ku, Tokyo

Real estate

558

PROUD FLAT Kiyosumi Shirakawa

2-3 Takabashi, Koto-ku, Tokyo

Real estate

911

PROUD FLAT Monzen Nakacho II

2-6-9 Furuishiba, Koto-ku, Tokyo

Real estate

602

PROUD FLAT Monzen Nakacho I

2-3-1 Tomioka, Koto-ku, Tokyo

Real estate

958

PROUD FLAT Fujimidai

3-8-4 Nukui, Nerima-ku, Tokyo

Real estate

1,380

Tokyo

PROUD FLAT Asakusa Komagata

1-10-6 Komagata, Taito-ku, Tokyo

Real estate

1,800

Area

PROUD FLAT Yokohama

8-18 Daimachi Kanagawa-ku, Yokohama-shi, Kanagawa

Real estate

2,100

PROUD FLAT Kamioooka

3-4-6 Kamioooka Nishi, Konan-ku, Yokohama-shi, Kanagawa

Real estate

2,790

PROUD FLAT Tsurumi II

20-16 Toyooka-cho, Tsurumi-ku, Yokohama-shi, Kanagawa

Real estate

1,470

PRIME URBAN Akasaka

7-6-19 Akasaka, Minato-ku, Tokyo

PRIME URBAN Tamachi

3-6-13 Sibaura, Minato-ku, Tokyo

PRIME URBAN Yoyogi

3-51-3 Yoyogi, Shibuya-ku, Tokyo

PRIME URBAN Bancho

2-9-1 Kudanshita, Chiyoda-ku, Tokyo

PRIME URBAN Chiyoda Fujimi

2-1-9 Fujimi, Chiyoda-ku, Tokyo

PRIME URBAN Iidabashi

4-8-9,11 Iidabashi, Chiyoda-ku, Tokyo

PRIME URBAN Ebisu

1-11-11 Mita, Meguro-ku, Tokyo

Greater

Real estate（Note 4）
Beneficial
Interest
Beneficial
Interest
Real estate（Note 4）
Real estate（Note 4）
Beneficial
Interest
Real estate
Beneficial
Interest
Beneficial
Interest
Beneficial
Interest

865
900
339
1,020
637
1,990
1,180

PRIME URBAN Naka Meguro

3-28-24 Kami Meguro, Meguro-ku, Tokyo

PRIME URBAN Gakugei Daigaku

2-14-14 Takaban, Meguro-ku, Tokyo

PRIME URBAN Senzoku

2-20-8 Senzoku, Meguro-ku, Tokyo

PRIME URBAN Meguro Riverside

2-10-16 Shimo Meguro, Meguro-ku, Tokyo

Real estate

418

PRIME URBAN Meguro Ohashi Hills

2-4-16 Ohashi, Meguro-ku, Tokyo

Real estate

2,810

PRIME URBAN Hakusan

1-7-9 Mukougaoka, Bunkyo-ku, Tokyo

Real estate

839

PRIME URBAN Yotsuya Gaien Higashi

14-62 Samoncho, Shinjuku-ku, Tokyo

PRIME URBAN Nishi Shinjuku I

1-19-3 Kita Shinjuku, Shinjuku-ku, Tokyo- 16 -

Beneficial
Interest
Beneficial
Interest

1,310
759
483

1,400
1,120

Area

GreaterName of Property

Location(Postal Address)

Beneficial
Interest
Beneficial
Interest

Appraisal
Value as of May
31, 2013(¥ mln) (Note 2)

PRIME URBAN Nishi Shinjuku II

5-6-4 Nishi Shinjuku, Shinjuku-ku, Tokyo

PRIME URBAN Shinjuku Naitomachi

1-55 Naitomachi, Shinjuku-ku, Tokyo

PRIME URBAN Nishi Waseda

1-13-11 Nishi Waseda, Shinjuku-ku, Tokyo

Real estate

468

PRIME URBAN Sangen Jaya

2-41-3 Sangen Jaya, Setagaya-ku, Tokyo

Beneficial
Interest

700

PRIME URBAN Minami Karasuyama

5-7-4 Minami Karasuyama, Setagaya-ku, Tokyo

Real estate

728

PRIME URBAN Karasuyama Galleria

4-10-24 Minami Karasuyama, Setagaya-ku, Tokyo

Real estate

554

PRIME URBAN Karasuyama Court

4-1-11 Minami Karasuyama, Setagaya-ku, Tokyo

Real estate

353

PRIME URBAN Chitose Funabashi

5-40-4 Sakuragaoka, Setagaya-ku, Tokyo

Real estate

747

PRIME URBAN Shinagawa Nishi

6-24-13 Yukata-cho, Shinagawa-ku, Tokyo

Real estate

541

PRIME URBAN Osaki

5-8-10 Osaki, Shinagawa-ku, Tokyo

PRIME URBAN Omori

1-15-1 Omori Kita, Ota-ku, Tokyo

PRIME URBAN Kita Senzoku

2-14-18 Kita Senzoku, Ota-ku, Tokyo

Real estate

489

PRIME URBAN Denenchofu Minami

12-5 Denenchofu Minami, Ota-ku, Tokyo

Real estate

766

PRIME URBAN Nakano Kamitakada

4-43-3 Kami Takada, Nakano-ku, Tokyo

Real estate532

Beneficial
Interest
Beneficial
Interest

Real estate（Note 4）
Beneficial
Interest
Beneficial
Interest
Beneficial
Interest
Real estate（Note 4）
Beneficial
Interest
Beneficial
Interest
Real estate（Note 4）
Beneficial
Interest
Beneficial
Interest

856
420

1,690
800

PRIME URBAN Nishi Ogikubo

2-27-5 Nishi Ogikubo, Suginami-ku, Tokyo

PRIME URBAN Otsuka

1-3-4 Nishi Sugamo, Toshima-ku, Tokyo

PRIME URBAN Monzen Nakacho

1-5-7 Monzen Nakacho, Koto-ku, Tokyo

PRIME URBAN Kameido

2-38-2 Kameido, Koto-ku, Tokyo

PRIME URBAN Sumiyoshi

2-23-3 Ogibashi, Koto-ku, Tokyo

PRIME URBAN Kinshi Koen

4-7-12 Taihei, Sumida-ku, Tokyo

PRIME URBAN Kinshicho

5-16-14 Kotobashi, Sumida-ku, Tokyo

PRIME URBAN Hirai

6-23-12 Hirai, Edogawa-ku, Tokyo

PRIME URBAN Kasai

6-18-5 Naka Kasai, Edogawa-ku, Tokyo

PRIME URBAN Kasai II

7-9-7 Higashi Kasai, Edogawa-ku, Tokyo

PRIME URBAN Shinyurigaoka

3-1-17 Manpukuji Asao-ku, Kawasaki-shi, Kanagawa

Real estate

1,130

PRIME URBAN Urayasu

3-2-13 Todaijima, Urayasu-shi, Chiba

Beneficial
Interest

766

PRIME URBAN Gyotoku I

2-4-10 Fukuei, Ichikawa-shi, Chiba

Real estate

591

PRIME URBAN Gyotoku II

1-11-5 Suehiro, Ichikawa-shi, Chiba

Real estate

668

Tokyo
Area

Type ofOwnership(Note 1)

Beneficial
Interest
Beneficial
Interest

378
656
2,300
758
581
1,210
702
664
617
972

PRIME URBAN Gyotoku Ekimae

2-26-11 Gyotoku Ekimae, Ichikawa-shi, Chiba

PRIME URBAN Nishi Funabashi

1, 2-437 Hongocho, Funabashi-shi, Chiba

PRIME URBAN Kawaguchi

3-1-11 Sakae-cho, Kawaguchi-shi, Saitama

Real estate

1,850

URBAN STAGE Azabu Juban

2-33-9 Higashi Azabu, Minato-ku, Tokyo

Real estate

984

URBAN STAGE Shibaura LOFT

4-5-17 Shibaura, Minato-ku, Tokyo

Real estate

1,790

URBAN STAGE Hatagaya

3-28-6 Hatagaya, Shibuya-ku, Tokyo

Real estate

443

URBAN STAGE Kachidoki

6-5-6 Kachidoki, Chuo-ku, TokyoURBAN STAGE Shinkawa

2-16-10 Shinkawa, Chuo-ku, TokyoURBAN STAGE Nihonbashi Yokoyamacho

3-4 Nihonbashi Yokoyamacho, Chuo-ku, Tokyo

Real estate

4,040

URBAN STAGE Hongo Ikizaka

2-16-3 Hongo, Bunkyo-ku, Tokyo

Real estate558- 17 -

Beneficial
Interest
Beneficial
Interest

457
713

2,370
2,010

Area

GreaterTokyo
Area

Name of Property

Location(Postal Address)

Type ofOwnership(Note 1)
Real estate（Note 4）
Real estate（Note 4）

Appraisal
Value as of May
31, 2013(¥ mln) (Note 2)

URBAN STAGE Naka Ochiai

1-7-19 Naka Ochiai, Shinjuku-ku, TokyoURBAN STAGE Ochiai

2-17-9 Nakai, Shinjuku-ku, TokyoURBAN STAGE Shinjuku Ochiai

4-10-9 Kita Shinjuku, Shinjuku-ku, Tokyo

Real estate

549

URBAN STAGE Mejiro

3-22-21 Shimoochiai, Shinjuku-ku Tokyo

Real estate

1,310

URBAN STAGE Roka Koen

1-12-26 Minami Karasuyama, Setagaya-ku, Tokyo

Real estate

309

URBAN STAGE Kamiuma

5-26-14 Kamiuma, Setagaya-ku, TokyoURBAN STAGE Sangen Jaya

5-38-12 Kamiuma, Setagaya-ku, TokyoURBAN STAGE Chitose Karasuyama

3-32-16 Kasuya, Setagaya-ku, TokyoURBAN STAGE Sangen Jaya II

2-4-16 Taishido, Setagaya-ku, TokyoURBAN STAGE Komazawa

2-7-18 Komazawa, Setagaya-ku, TokyoURBAN STAGE Karasuyama

4-5-15 Minami Karasuyama, Setagaya-ku, TokyoURBAN STAGE Kamikitazawa

5-21-22 Kami Kitazawa, Setagaya-ku, Tokyo

Real estate

585

URBAN STAGE Yoga

2-27-5 Yoga, Setagaya-ku, Tokyo

Real estate

1,270

URBAN STAGE Oimachi

4-10-9 Oi, Shinagawa-ku, Tokyo

Real estate

473

URBAN STAGE Oimachi II

5-10-10 Higashi Oi, Shinagawa-ku, Tokyo

Real estate（Note 4）

1,150

URBAN STAGE Yukigaya

34-10 Kita Minemachi, Ota-ku, Tokyo

Real estate

921

URBAN STAGE Ikegami

7-4-11 Ikegami, Ota-ku, Tokyo

Beneficial
Interest

1,240

URBAN STAGE Nakano

2-17-1 Kami Takada, Nakano-ku, Tokyo

Real estate

455

URBAN STAGE Takaido

4-10-12 Takaido Higashi, Suginami-ku, Tokyo

Real estate

992

URBAN STAGE Komagome

6-12-15 Komagome, Toshima-ku, Tokyo

Beneficial
Interest

457

URBAN STAGE Mukojima

5-19-14 Higashi Mukojima, Sumida-ku, Tokyo

Real estate

532

URBAN STAGE Kasai East

6-16-9 Higashi Kasai, Edogawa-ku, Tokyo

Real estate

1,100

URBAN STAGE Ekoda

1-10-5 Asahigaoka, Nerima-ku, Tokyo

Real estate

382

URBAN STAGE Takinokawa

7-49-18 Takinokawa, Kita-ku, Tokyo

Real estate

261

URBAN STAGE Itabashi Kuyakushomae

27-13 Honcho, Itabashi-ku, Tokyo

Real estate

1,070

URBAN STAGE Asakusa

3-33-11 Asakusa, Taito-ku, Tokyo

Real estate

364

URBAN STAGE Machiya

1-32-13 Machiya, Arakawa-ku, Tokyo

Real estate

181

URBAN STAGE Machiya South Court

3-73-5 Arakawa, Arakawa-ku, Tokyo

Real estate

1,750

URBAN STAGE Koganei

2-13-14 Nukui Kitamachi, Koganei-shi, Tokyo

Real estate

197

URBAN STAGE Musashi Koganei

2-11-26 Nakacho, Koganei-shi, Tokyo

Real estate

1,860

URBAN STAGE Musashino Hills

2-1-2, 36 Kajinocho, Koganei-shi, Tokyo

Real estate

1,360

URBAN STAGE Koganei Honcho

4-14-25 Honcho, Koganei-shi Tokyo

Real estate

763

URBAN STAGE Hino

536-2 Hino Oaza, Hino-shi, Tokyo

Real estate

311

URBAN STAGE Kumegawa

1-5-6 Sakae-cho, Higashimurayama-shi, Tokyo

Real estate

1,400

URBAN STAGE Musashi Kosugi comodo

2-902-1 Shin Maruko Higashi Nakahara-ku, Kawasaki-shi, Kanagawa

Real estate

2,000

URBAN STAGE Kawasaki

1-4-15 Honcho Kawasaki-ku, Kawasaki-shi, Kanagawa

Real estate

927

URBAN STAGE Tsurumi Teraya

1-7-10 Teraya Tsurumi-ku, Yokohama-shi, Kanagawa

Real estate

461

URBAN STAGE Urayasu

2-11-5 Todaijima, Urayasu-shi, Chiba

Real estate215- 18 -

Beneficial
Interest
Real estate（Note 4）
Beneficial
Interest
Beneficial
Interest
Beneficial
Interest
Beneficial
Interest

580
325

859
659
691
428
342
321

Area

GreaterTokyo
Area

Name of Property

Location(Postal Address)

Type ofOwnership(Note 1)URBAN STAGE Minami Gyotoku II

1-4-18 Hiro, Ichikawa-shi, Chiba

Real estate

229

URBAN STAGE Minami Gyotoku III

1-21-23 Ainokawa, Ichikawa-shi, Chiba

Real estate

230

URBAN STAGE Minami Gyotoku IV

1-5-18 Hiro, Ichikawa-shi, Chiba

Real estate

216

URBAN STAGE Gyotoku Ekimae

4-6-14 Gyotoku Ekimae, Ichikawa-shi, Chiba

Real estate

485

URBAN STAGE Minami Gyotoku V

2-12-3 Minami Gyotoku, Ichikawa-shi, Chiba

Real estate

269

URBAN STAGE Gyotoku

1-2-8 Fukuei, Ichikawa-shi, Chiba

Real estate

816

Subtotal

Other

Appraisal
Value as of May
31, 2013(¥ mln) (Note 2)

114,571

PROUD FLAT Itsutsubashi

2-5-2 Itsutsubashi, Aoba-ku, Sendai-shi, Miyagi

Real estate

668

PROUD FLAT Kawaramachi

2-10 Aza Hachikenkoji, Minami Koizumi, Wakabayashi-ku, Sendai-shi,
MiyagiReal estate

659

PROUD FLAT Shin Osaka

6-11-7 Nishi Nakajima Yodogawa-ku, Osaka-shi, Osaka

Real estate

1,460

PRIME URBAN Yamahana

1-27 Nishi 14-Chome minami 17-Jo, Chuo-ku, Sapporo-shi, Hokkaido

Real estate

317

PRIME URBAN Kita Juyo Jo

2-1 Higashi 1-Chome Kita 14-Jo, Higashi-ku, Sapporo-shi, Hokkaido

Real estate

327

PRIME URBAN Odori Koen I

12 Nishi 9-Chome Minami 1-Jo, Chuo-ku, Sapporo-shi, Hokkaido

Real estate

464

PRIME URBAN Odori Koen II

12-1 Nishi 9-Chome Minami 1-Jo, Chuo-ku, Sapporo-shi, Hokkaido

Real estate

303

PRIME URBAN Kita Juichi Jo

1-3 Higashi 1-Chome Kita 11-Jo, Higashi-ku, Sapporo-shi, Hokkaido

Real estate

563

PRIME URBAN Miyanosawa

10-20 9-Chome Hassamu 6-Jo Nishi-ku, Sapporo-shi, Hokkaido

Real estate

509

PRIME URBAN Odori Higashi

12-63 Higashi 7-Chome Odori, Chuo-ku, Sapporo-shi, Hokkaido

Real estate

422

PRIME URBAN Chiji Kokan

1-12 Nishi 17-Chome Kita 4-Jo, Chuo-ku, Sapporo-shi, Hokkaido

Real estate

280

PRIME URBAN Maruyama

1-1, Nishi 22-Chome Kita 4-Jo, Chuo-ku, Sapporo-shi, Hokkaido

Real estate

249

PRIME URBAN Kita Nijuyo Jo

2-1 Higashi 1-Chome Kita 23-Jo, Higashi-ku, Sapporo-shi, Hokkaido

Real estate

461

PRIME URBAN Sapporo Idaimae

1-20 Nishi 13-Chome Minami 4-Jo, Chuo-ku, Sapporo-shi, Hokkaido

Real estate

651

PRIME URBAN Nagamachi Icchome

1-2-30 Nagamachi Icchome, Taihaku-ku, Sendai-shi, Miyagi

Real estate

1,030

PRIME URBAN Yaotome Chuo

3-8-70 Yaotome Chuo, Izumi-ku, Sendai-shi, Miyagi

Real estate

426

PRIME URBAN Aoi

1-13-24 Aoi, Higashi-ku, Nagoya-shi, Aichi

Beneficial
Interest

657

PRIME URBAN Kanayama

4-2-37 Masaki, Naka-ku, Nagoya-shi, Aichi

Real estate

605

PRIME URBAN Tsurumai

5-8-29 Chiyoda Naka-ku, Nagoya-shi, Aichi

Real estate

1,080

Beneficial
Interest
Beneficial
Interest

PRIME URBAN Esaka I

3-26-27 Tarumi-cho, Suita-shi, Osaka

PRIME URBAN Esaka II

3-31-31 Tarumi-cho, Suita-shi, Osaka

PRIME URBAN Esaka III

10-19 Hiroshiba-cho, Suita-shi, Osaka

Real estate

1,140

URBAN STAGE Sapporo Riverfront

1-1 Nishi 1-Chome Minami 9-Jo, Chuo-ku, Sapporo-shi, Hokkaido

Real estate

4,110

URBAN STAGE Kita Sanjo Dori

2-2 Higashi 2-Chome Kita 3-Jo, Chuo-ku, Sapporo-shi, Hokkaido

Real estate

1,600

URBAN STAGE Tsutsumidori Amamiya

4-37 Tsutsumidori Amamiya-machi, Aoba-ku, Sendai-shi, Miyagi

Real estate

841

URBAN STAGE Kamimaezu

2-4-2 Kamimaezu Naka-ku, Nagoya-shi, Aichi

Real estate

1,460

URBAN STAGE Izumi

1-20-28 Izumi Higashi-ku, Nagoya-shi, Aichi

Real estate

3,350

URBAN STAGE Tamatsukuri

2-16-11 Tamatsukuri Chuo-ku, Osaka-shi, Osaka

Real estate973

Benefis Hakata Grand Suite

2-14-7 Minoshima, Hakata-ku, Fukuoka-shi, Fukuoka

Real estate692

Benefis Yakuin Minami

1-14-10 Shirogane, Chuo-ku, Fukuoka-shi, Fukuoka

Real estate

307

Benefis Kashii Verbena

2-3-7 Kashii Ekimae Higashi-ku, Fukuoka-shi, Fukuoka

Real estate370- 19 -

626
749

Area

Other

Name of Property

Location(Postal Address)

Type ofOwnership(Note 1)

Appraisal
Value as of May
31, 2013(¥ mln) (Note 2)

Benefis Hakata Higashi Grand Suite

6-4-23 Yoshizuka Hakata-ku, Fukuoka-shi, Fukuoka

Real estate

576

Benefis Chihaya Grand Suite

4-11-20 Chihaya Higashi-ku, Fukuoka-shi, Fukuoka

Real estate

567

Subtotal

28,492

Total

143,063

Note 1: “Beneficial interest” described in “Type of Ownership” refers to the beneficiary right of trusts whose major properties are real estate.
Note2: “Appraisal Value as of May 31, 2013” stands for the prices appraised by the estate surveyors in accordance with the provisions of the Company’s Articles of Incorporation and the“Rules Concerning Calculations of Investment Corporations” (Cabinet Office Ordinance No. 47 of 2006). The appraisal prices are calculated by Daiwa Real Estate Appraisal, Co.,
Ltd., Chuo Real Estate Appraisal Co., Ltd., Japan Real Estate Institution, Tanizawa Sogo Appraisal Co., Ltd., Japan Valuers Co., Ltd., using the capitalization approach, with the endof the 13th fiscal period, i.e. November 30, 2012, being taken as the point of evaluation.
Note 3: Residential indication of the property is not available yet.
Note 4: The “Type of Ownership” of the relevant properties is changed from “Beneficial interest” to “Real estate” along with the cancellation or expiration of the term of the trust.

- 20 -

Area

GreaterTokyo
Area

Name of Property

13th Period (from Dec. 1, 2012 to May 31, 2013)
Rentalat Period End
Portion of
Revenues
RentalNumber ofduring the
Occupancy
Revenues
Tenants
PeriodRate (%)(%)(Note 1)(¥ mln)12th Period (from Jun. 1, 2012 to Nov. 30, 2012)
Rentalat Period End
Portion of
Revenues
RentalNumber ofduring the
Occupancy
Revenues
Tenants
PeriodRate (%)(%)(Note 1)(¥ mln)PROUD FLAT Shirokane Takanawa

1

96.7

96,570

1.8

1

99.3

94,439

1.8

PROUD FLAT Yoyogi Uehara

1

98.0

30,139

0.6

1

100.0

30,227

0.6

PROUD FLAT Hatsudai

1

93.7

22,901

0.4

1

94.5

23,335

0.5

PROUD FLAT Shibuya Sakuragaoka

1

93.3

22,068

0.4

1

96.7

22,751

0.4

PROUD FLAT Gakugei Daigaku

1

100.0

25,884

0.5

1

100.0

24,518

0.5

PROUD FLAT Meguro Gyoninzaka

1

100.0

28,744

0.5

1

100.0

27,787

0.5

PROUD FLAT Sumida Riverside

1

97.9

74,945

1.4

1

99.2

73,034

1.4

PROUD FLAT Kagurazaka

1

100.0

47,595

0.9

1

100.0

47,773

0.9

PROUD FLAT Waseda

1

97.0

36,251

0.7

1

98.5

34,568

0.7

PROUD FLAT Shinjuku Kawadacho

1

97.1

29,066

0.6

1

100.0

28,804

0.6

PROUD FLAT Sangen Jaya

1

92.3

36,378

0.7

1

92.6

35,500

0.7

PROUD FLAT Kamata

1

91.4

38,584

0.7

1

98.5

36,622

0.7

PROUD FLAT Kamata II

1

94.7

105,408

2.0

1

99.0

111,744

2.2

PROUD FLAT Shinotsuka

1

100.0

18,988

0.4

1

91.5

20,6490.4

PROUD FLAT Kiyosumi Shirakawa

1

100.0

30,740

0.6

1

100.0

30,6890.6

PROUD FLAT Monzen Nakacho II

1

92.1

21,720

0.4

1

94.9

19,7280.4

PROUD FLAT Monzen Nakacho I

1

100.0

35,833

0.7

1

98.2

35,234

0.7

PROUD FLAT Fujimidai

1

100.0

56,149

1.1

1

100.0

56,182

1.1

PROUD FLAT Asakusa Komagata

1

94.3

63,393

1.2

1

100.0

63,145

1.2

PROUD FLAT Yokohama

1

93.2

74,253

1.4

1

98.5

74,330

1.4

PROUD FLAT Kamioooka

1

100.0

97,168

1.9

1

100.0

97,454

1.9

PROUD FLAT Tsurumi II

1

97.1

62,714

1.2

1

93.6

60,411

1.2

PRIME URBAN Akasaka

1

100.0

27,384

0.5

1

94.4

27,2270.5

PRIME URBAN Tamachi

1

94.0

31,161

0.6

1

95.9

30,6200.6

PRIME URBAN Yoyogi

1

96.0

12,192

0.2

1

94.2

11,2430.2

PRIME URBAN Bancho

1

91.1

30,613

0.6

1

91.5

31,237

0.6

PRIME URBAN Chiyoda Fujimi

1

100.0

21,746

0.4

1

93.8

20,6720.4

PRIME URBAN Iidabashi

1

95.7

62,393

1.2

1

98.9

59,954

1.2

PRIME URBAN Ebisu

1

100.0

37,530

0.7

1

100.0

35,931

0.7

PRIME URBAN Naka Meguro

1

100.0

41,513

0.8

1

98.0

39,2350.8

PRIME URBAN Gakugei Daigaku

1

91.0

22,931

0.4

1

87.7

22,7220.4

PRIME URBAN Senzoku

1

84.7

15,771

0.3

1

100.0

14,211

0.3

PRIME URBAN Meguro Riverside

1

100.0

14,863

0.3

1

100.0

14,446

0.3

PRIME URBAN Meguro Ohashi Hills

1

99.1

84,469

1.6

1

99.1

84,617

1.6

PRIME URBAN Hakusan

1

92.2

25,643

0.5

1

92.9

25,2580.5

PRIME URBAN Yotsuya Gaien Higashi

1

97.8

45,136

0.9

1

94.3

44,7630.9

PRIME URBAN Nishi Shinjuku I

1

100.0

37,226

0.7

1

95.5

36,7580.7

PRIME URBAN Nishi Shinjuku II

1

95.7

28,869

0.6

1

97.9

28,171

0.5

PRIME URBAN Shinjuku Naitomachi

1

100.0

13,773

0.3

1

100.0

11,761

0.2

PRIME URBAN Nishi Waseda

1

100.0

17,809

0.3

1

100.0

15,4080.3

PRIME URBAN Sangen Jaya

1

94.2

23,583

0.5

1

100.0

23,3970.5

PRIME URBAN Minami Karasuyama

1

92.8

23,881

0.5

1

95.2

24,131

0.5

PRIME URBAN Karasuyama Galleria

1

88.0

18,783

0.4

1

90.9

19,2520.4

PRIME URBAN Karasuyama Court

1

87.0

12,337

0.2

1

91.3

11,6040.2

PRIME URBAN Chitose Funabashi

1

97.5

25,618

0.5

1

97.3

22,851

0.4

PRIME URBAN Shinagawa Nishi

1

95.9

22,042

0.4

1

100.0

21,506

0.4

PRIME URBAN Osaki

1

96.0

56,479

1.1

1

95.0

56,465

1.1

PRIME URBAN Omori

1

98.1

30,306

0.6

1

96.3

28,5300.6

PRIME URBAN Kita Senzoku

1

95.7

19,289

0.4

1

97.8

18,1450.4

PRIME URBAN Denenchofu Minami

1

90.0

26,008

0.5

1

93.3

27,0690.5

PRIME URBAN Nakano Kamitakada

1

100.0

18,449

0.4

1

90.2

19,3470.4

PRIME URBAN Nishi Ogikubo

1

95.7

13,459

0.3

1

100.0

13,1500.3

PRIME URBAN Otsuka

1

100.0

23,806

0.5

1

100.0

22,5580.4

PRIME URBAN Monzen Nakacho

1

96.7

77,194

1.5

1

97.5

75,7901.5

PRIME URBAN Kameido

1

100.0

26,144

0.5

1

98.1

27,654

0.5

PRIME URBAN Sumiyoshi

1

87.5

19,494

0.4

1

95.0

18,454

0.4- 21 -

Area

Name of Property

13th Period (from Dec. 1, 2012 to May 31, 2013)
Rentalat Period End
Portion of
Revenues
RentalNumber ofduring the
Occupancy
Revenues
Tenants
PeriodRate (%)(%)(Note 1)(¥ mln)12th Period (from Jun. 1, 2012 to Nov. 30, 2012)
Rentalat Period End
Portion of
Revenues
RentalNumber ofduring the
Occupancy
Revenues
Tenants
PeriodRate (%)(%)(Note 1)(¥ mln)PRIME URBAN Kinshi Koen

1

98.7

42,474

0.8

1

90.9

41,301

0.8

PRIME URBAN Kinshicho

1

100.0

23,995

0.5

1

100.0

23,9480.5

PRIME URBAN Hirai

1

92.5

24,586

0.5

1

100.0

23,3930.5

PRIME URBAN Kasai

1

97.8

19,862

0.4

1

80.0

19,5230.4

PRIME URBAN Kasai II

1

95.6

30,997

0.6

1

86.8

31,232

0.6

PRIME URBAN Shinyurigaoka

1

100.0

37,536

0.7

1

100.0

37,6730.7

PRIME URBAN Urayasu

1

96.7

26,184

0.5

1

86.7

25,594

0.5

PRIME URBAN Gyotoku I

1

98.1

21,244

0.4

1

80.8

21,6950.4

PRIME URBAN Gyotoku II

1

100.0

24,213

0.5

1

100.0

24,0980.5

PRIME URBAN Gyotoku Ekimae

1

91.9

16,529

0.3

1

97.3

18,4280.4

PRIME URBAN Nishi Funabashi

1

96.7

26,408

0.5

1

93.3

25,2300.5

PRIME URBAN Kawaguchi

1

100.0

70,586

1.3

1

96.7

71,807

1.4

URBAN STAGE Azabu Juban

1

100.0

31,207

0.6

1

87.3

30,161

0.6

URBAN STAGE Shibaura LOFT

1

95.9

60,841

1.2

1

98.6

56,932

1.1

URBAN STAGE Hatagaya

1

100.0

15,596

0.3

1

97.4

16,1700.3

URBAN STAGE Toritsu Daigaku (Note 2)

－

－

8,684

0.2

1

100.0

17,362

0.3

URBAN STAGE Kachidoki

1

90.7

94,285

1.8

1

95.9

88,514

1.7

URBAN STAGE Shinkawa

1

94.8

73,602

1.4

1

96.5

75,207

1.5

URBAN STAGE Nihonbashi Yokoyamacho

1

95.9

126,384

2.4

1

100.0

128,073

2.5

URBAN STAGE Hongo Ikizaka

1

96.3

18,458

0.4

1

100.0

17,591

0.3

URBAN STAGE Naka Ochiai

1

100.0

23,320

0.4

1

88.6

21,6190.4

URBAN STAGE Ochiai

1

97.0

13,722

0.3

1

90.8

13,006

0.3

URBAN STAGE Shinjuku Ochiai

1

100.0

20,588

0.4

1

95.6

20,334

0.4

URBAN STAGE Mejiro (Note 3)

1

88.1

1,197

0.0

－

－

－

－

URBAN STAGE Roka Koen

1

97.1

12,203

0.2

1

91.3

10,764

0.2

URBAN STAGE Kamiuma

1

96.4

33,248

0.6

1

99.1

32,357

0.6

URBAN STAGE Sangen Jaya

1

95.1

25,309

0.5

1

97.0

25,833

0.5

Greater

URBAN STAGE Chitose Karasuyama

1

96.2

25,104

0.5

1

85.9

24,8230.5

Tokyo

URBAN STAGE Sangen Jaya II

1

91.3

16,356

0.3

1

91.2

15,9330.3

Area

URBAN STAGE Komazawa

1

82.2

12,632

0.2

1

96.0

13,9690.3

URBAN STAGE Karasuyama

1

100.0

12,563

0.2

1

90.0

12,276

0.2

URBAN STAGE Kamikitazawa

1

90.5

21,093

0.4

1

96.2

21,951

0.4

URBAN STAGE Yoga

1

93.0

41,786

0.8

1

97.6

42,8050.8

URBAN STAGE Oimachi

1

100.0

20,092

0.4

1

100.0

19,7890.4

URBAN STAGE Oimachi II

1

94.2

49,393

0.9

1

90.1

47,734

0.9

URBAN STAGE Yukigaya

1

93.6

37,323

0.7

1

96.8

37,7580.7

URBAN STAGE Ikegami

1

93.9

49,168

0.9

1

94.8

48,6890.9

URBAN STAGE Nakano

1

100.0

18,498

0.4

1

92.9

17,836

0.3

URBAN STAGE Takaido

1

95.4

40,535

0.8

1

98.2

39,7030.8

URBAN STAGE Komagome

1

92.2

16,105

0.3

1

75.3

13,077

0.3

URBAN STAGE Mukojima

1

98.2

20,646

0.4

1

90.9

20,471

0.4

URBAN STAGE Kasai East

1

100.0

36,676

0.7

1

100.0

36,631

0.7

URBAN STAGE Ekoda

1

97.5

15,352

0.3

1

94.3

15,017

0.3

URBAN STAGE Takinokawa

1

100.0

11,111

0.2

1

96.5

10,9700.2

URBAN STAGE Itabashi Kuyakushomae

1

93.9

38,546

0.7

1

92.9

36,113

0.7

URBAN STAGE Asakusa

1

97.0

13,142

0.3

1

95.4

15,466

0.3

URBAN STAGE Machiya

1

100.0

9,425

0.2

1

96.4

9,433

0.2

URBAN STAGE Machiya South Court

1

94.2

71,862

1.4

1

88.5

68,153

1.3

URBAN STAGE Koganei

1

100.0

9,813

0.2

1

89.1

9,608

0.2

URBAN STAGE Musashi Koganei

1

98.0

74,713

1.4

1

96.6

72,851

1.4

URBAN STAGE Musashino Hills

1

86.9

48,938

0.9

1

96.8

49,241

1.0

URBAN STAGE Koganei Honcho (Note 4)

1

97.9

28,838

0.6

1

97.3

27,051

0.5

URBAN STAGE Hino

1

88.9

15,838

0.3

1

94.4

15,3250.3

URBAN STAGE Kumegawa

1

99.1

54,463

1.0

1

83.3

48,5450.9

URBAN STAGE Musashi Kosugi comodo

1

100.0

70,458

1.3

1

96.8

65,413

1.3

URBAN STAGE Kawasaki

1

100.0

37,390

0.7

1

100.0

36,763

0.7

URBAN STAGE Tsurumi Teraya

1

97.6

21,242

0.4

1

100.0

20,961

0.4- 22 -

Area

Name of Property

13th Period (from Dec. 1, 2012 to May 31, 2013)
Rentalat Period End
Portion of
Revenues
RentalNumber ofduring the
Occupancy
Revenues
Tenants
PeriodRate (%)(%)(Note 1)(¥ mln)12th Period (from Jun. 1, 2012 to Nov. 30, 2012)
Rentalat Period End
Portion of
Revenues
RentalNumber ofduring the
Occupancy
Revenues
Tenants
PeriodRate (%)(%)(Note 1)(¥ mln)URBAN STAGE Urayasu

1

92.6

9,300

0.2

1

88.9

8,323

0.2

URBAN STAGE Minami Gyotoku I (Note 5)

－

－

8,214

0.2

1

85.5

13,704

0.3

URBAN STAGE Minami Gyotoku II

1

64.9

10,083

0.2

1

86.5

11,524

0.2

Greater

URBAN STAGE Minami Gyotoku III

1

100.0

12,410

0.2

1

93.9

12,0870.2

Tokyo

URBAN STAGE Minami Gyotoku IV

1

93.8

11,266

0.2

1

96.9

11,6620.2

Area

URBAN STAGE Gyotoku Ekimae

1

100.0

19,574

0.4

1

87.0

18,537

0.4

URBAN STAGE Minami Gyotoku V

1

90.0

13,008

0.2

1

80.0

12,2590.2

URBAN STAGE Gyotoku

1

98.7

37,906

0.7

1

100.0

33,877

0.7

Subtotal
PROUD FLAT Itsutsubashi

119

96.1

4,047,566

77.3

120

95.7

3,987,291

77.1

1

97.8

29,856

0.6

1

100.0

29,233

0.6

PROUD FLAT Kawaramachi

1

100.0

29,816

0.6

1

100.0

29,2190.6

PROUD FLAT Shin Osaka

1

96.5

60,275

1.2

1

99.0

58,6801.1

PRIME URBAN Yamahana

1

94.0

12,294

0.2

1

85.7

11,7930.2

PRIME URBAN Kita Juyo Jo

1

96.8

12,774

0.2

1

92.9

12,0080.2

PRIME URBAN Odori Koen I

1

100.0

17,153

0.3

1

100.0

17,1770.3

PRIME URBAN Odori Koen II

1

100.0

11,133

0.2

1

100.0

11,142

0.2

PRIME URBAN Kita Juichi Jo

1

98.3

24,663

0.5

1

98.3

24,3200.5

PRIME URBAN Miyanosawa

1

96.2

23,240

0.4

1

98.4

23,441

0.5

PRIME URBAN Odori Higashi

1

100.0

18,421

0.4

1

94.5

18,6890.4

PRIME URBAN Chiji Kokan

1

100.0

13,177

0.3

1

100.0

12,9200.2

PRIME URBAN Maruyama

1

96.3

11,697

0.2

1

100.0

11,3830.2

PRIME URBAN Kita Nijuyo Jo

1

97.2

20,494

0.4

1

97.2

20,3220.4

PRIME URBAN Sapporo Idaimae

1

96.0

28,256

0.5

1

96.4

28,076

0.5

PRIME URBAN Nagamachi Icchome

1

100.0

42,255

0.8

1

100.0

42,0330.8

PRIME URBAN Yaotome Chuo

1

100.0

18,411

0.4

1

100.0

18,5670.4

PRIME URBAN Aoi

1

88.4

23,753

0.5

1

90.3

24,9080.5

PRIME URBAN Kanayama

1

100.0

24,188

0.5

1

100.0

23,985

0.5

PRIME URBAN Tsurumai

1

96.2

42,922

0.8

1

99.0

42,9830.8

PRIME URBAN Esaka I

1

93.8

23,950

0.5

1

95.8

23,4200.5

PRIME URBAN Esaka II

1

94.0

27,216

0.5

1

94.8

28,2780.5

PRIME URBAN Esaka III

1

92.7

42,277

0.8

1

93.1

43,341

0.8

URBAN STAGE Sapporo Riverfront

1

97.2

188,102

3.6

1

97.2

186,041

3.6

URBAN STAGE Kita Sanjo Dori

1

97.0

68,138

1.3

1

98.0

67,345

1.3

URBAN STAGE Tsutsumidori Amamiya

1

100.0

44,484

0.8

1

100.0

44,531

0.9

URBAN STAGE Kamimaezu

1

98.1

55,992

1.1

1

94.3

55,070

1.1

URBAN STAGE Izumi

1

95.4

133,621

2.6

1

99.1

136,327

2.6

URBAN STAGE Tamatsukuri

1

97.5

35,679

0.7

1

92.2

36,0210.7

Benefis Hakata Grand Suite

1

96.2

29,192

0.6

1

96.9

30,3630.6

Benefis Yakuin Minami

1

100.0

12,882

0.2

1

84.8

12,5660.2

Benefis Kashii Verbena

1

94.4

16,161

0.3

1

96.7

15,6570.3

Benefis Hakata Higashi Grand Suite

1

98.7

26,154

0.5

1

98.4

24,3790.5

Benefis Chihaya Grand Suite

1

97.9

22,696

0.4

1

88.4

23,1100.4

Subtotal

33

97.2

1,191,338

22.7

33

97.0

1,187,343

22.9

Total

152

96.4

5,238,904

100.0

153

96.2

5,174,635

100.0

Other

Note 1: In the case that a part of or all rental units in individual properties are placed on the rental market, and the tenant of the relevant Lease Agreement (Master Lease Agreement) has
entered into an agreement on subleasing the relevant rental unit with the end-tenant (actual sublessee), we deem the lesser of the relevant Master Lease Agreement as one (1). In
the case that a specific tenant rents multiple units in a specific property, we deem the tenant of the relevant property as one (1). If a tenant rents units in multiple properties, weshow the number of the properties rented by the relevant tenant as the number of tenants.
Note 2: The relevant properties were sold on February 26, 2013. The figure shown in the “rental revenues during the 13th fiscal period” column is after the date of selling.
Note 3: The relevant properties were acquired onMay 30, 2013. The figure shown in the “rental revenues during the 13th fiscal period” column is after the date of acquisition.
Note 4: The relevant properties were acquired on June 8, 2012. The figure shown in the “rental revenues during the 12th fiscal period” column is after the date of acquisition.
Note 5: The relevant properties were sold on March 21, 2013. The figure shown in the “rental revenues during the 13th fiscal period” column is after the date of selling.

- 23 -

4. OUTSTANDING AMOUNT AND CURRENT PRICE OF SPECIFIED TRANSACTIONS
The outstanding amount and current price of the specified transactions as of May 31, 2013 are as follows.
Segment
Transaction other than market transaction

Contract Amount(¥ mln) (Note 1)
Longer than a Year

Type of Transaction
Interest-rate swap
(Receiving floating-rate, paying fixed-rate)
Total

Current Price(¥ mln) (Note 2)

44,39236,920△76

44,39236,920△76

Note 1: Presented based on notional principal of contract.
Note 2: Evaluated at the price provided by the counterparty based on the prevailing market rate.

5. STATUS OF THE OTHER ASSETS
Other than the Trust Beneficial Interest and Real Estate listed in the table under the title “3. Details of Portfolio Properties”, theCompany had no other assets to integrate into the portfolio as of May 31, 2013.

6. STATUS OF ASSETS BY COUNTRY AND REGIONThe Company had no assets in countries or regions outside Japan.

- 24 -

Capital Expenditures
1. PLAN OF CAPITAL EXPENDITURES
The table below lists major capital expenditures in conjunction with the refurbishment and/or renewal works scheduled for the
future (finished in part) on the properties held as of May 31, 2013. The estimated cost of works includes the amount to be charged
as “expenses” for accounting purposes.
Name of Property (Location)

Description of Works (Purpose)

Estimated Period

Total

Estimated Cost (¥000)
Paid during
Paid before
13th Period
13th Period

URBAN STAGE Yukigaya(Ota-ku, Tokyo)

Intercom replacement

From : Jun. 2013
To
: Jul. 2013

6,000

-

-

URBAN STAGE Takaido(Suginami-ku, Tokyo)

Intercom replacement

From : Sep. 2013To
: Oct. 2013

6,500

-

-

URBAN STAGE Ekoda(Nerima-ku, Tokyo)

Major repair

From : Sep. 2013To
: Nov. 2013

18,000--URBAN STAGE Sapporo Riverfront(Sapporo-shi, Hokkaido)

Common area renovation

From : Sep. 2013To
: Nov. 2013

12,000--URBAN STAGE Tsutsumidori Amamiya(Sendai-shi, Miyagi)

Mechanical parking renovation

From : Sep. 2013To
: Nov. 2013

7,700

-

-

2. CAPITAL EXPENDITURES DURING THE 13TH FISCAL PERIOD
The table below lists capital expenditures during the 13th fiscal period in conjunction with the major works of renovation. During
the period, we have conducted engineering works totaling ¥390,116 thousand: capital expenditures of ¥138,959 thousand andrepair expenses of ¥251,156 thousand combined all together.
Name of Property (Location)

Description of Works (Purpose)

Period of Works

Cost of Works (¥000)

URBAN STAGE Ikegami(Ota-ku, Tokyo)

Housing equipment renewal

From : Feb. 2013
To
: Feb. 2013

5,305

URBAN STAGE Komagome(Toshima-ku, Tokyo)

Exclusive area renovation

From : Oct. 2012
To
: Feb. 2013

43,300URBAN STAGE Mukojima(Sumida-ku, Tokyo)

Major repair

From : Sep. 2012
To
: Dec. 2012

6,527

URBAN STAGE Minami Gyotoku III(Ichikawa-shi, Chiba)

Housing equipment renewal

From : Apr. 2013To
: Apr. 2013

3,873

Other Properties

Housing equipment renewal

From : Dec. 2012
To
: May 2013

79,952

Total

138,959

3. FUNDS RESERVED FOR THE LONG-TERM REPAIR PLANS
Subject to the long-term schedule for repairs and maintenance set down for each building, the Company has accounted for reserves
from the operating cash flow to prepare for large-scale engineering works to be carried out in the future.
13th Period
from Dec. 1, 2012
to May 31, 2013
Balance brought forward from theprevious period
Amount reserved during the period
Amount used during the period
Balance brought forward to the next
period12th Period
from Jun. 1, 2012
to Nov. 30, 2012

11th Period
from Dec. 1, 2011
to May 31, 2012

10th Period
from Jun. 1, 2011
to Nov. 30, 2011

9th Period
from Dec. 1, 2010
to May 31, 2011(¥ mln)

1,548

1,385

1,253

1,102

973

(¥ mln)(¥ mln)

176
73

176
12

168
36

159
9

161
32

(¥ mln)

1,651

1,548

1,385

1,253

1,102

- 25 -

Expenses and Liabilities
1. EXPENSES RELATED TO ASSET MANAGEMENT
12th Period
from Jun. 1, 2012
to Nov. 30, 2012

13th Period
from Dec. 1, 2012
to May 31, 2013
Asset management fees (Note 1)of which Management Fee I
of which Management Fee IIof which Management Fee III (Note 2)
Custodian fees
General administrative fees
Directors’ compensation
Other expenses
Total(¥000)(¥000)(¥000)－(¥000)(¥000)(¥000)(¥000)(¥000)

375,947
195,002180,945－
14,961
23,104
4,800
152,591
571,405

379,006
196,975
182,030－
14,96826,701
5,600
163,709589,984

Note 1: In addition to the items shown above, asset management fees related to the acquisition of properties calculated in the book value of individual pieces of real estate, etc. were 7,250
thousand yen for the 12th period and 12,600 thousand yen for the 13th period.
Note 2: If the total assets listed on the balance sheet as of the date of settlement during the fiscal period immediately before the relevant fiscal period is less than 300 billion yen, management
fee III for the relevant fiscal period is not applied.

- 26 -

2. STATUS OF BORROWINGSThe status of borrowings from the financial institutions as of May 31, 2013 is as follows.
Current Portion of Long-term debt
Financial Institutions

Date Borrowed

The Bank of Tokyo-Mitsubishi UFJ, Ltd.
Sumitomo Mitsui Banking Corporation
Dec. 3, 2009

Mizuho Bank, Ltd. (Note 5)

Outstanding
as of May31, 2013(¥000)-

Outstanding
as of Dec. 1,
2012 (¥000)-

400,000-

400,000-

400,000

Mizuho Bank, Ltd. (Note 5)-

1,000,000-

1,000,000

May 23, 2008

Development Bank of Japan, Inc.
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
Sumitomo Mitsui Banking Corporation
Mitsubishi UFJ Trust and Banking
Corporation
The Dai-Ichi Life Insurance Company,
LimitedMitsubishi UFJ Trust and Banking
Corporation

Sep. 29, 2008

Sep. 27, 2007

Taiyo Life Insurance Company

Feb. 27, 2007

The Bank of Tokyo-Mitsubishi UFJ, Ltd.
Sumitomo Mitsui Banking Corporation-

3,500,000

1,824,000

1,824,000

1,824,000

1,824,000

1,824,000

1,824,000

800,000

800,000

1,000,000

1,000,000

Feb. 27, 2007

The Nomura Trust and Banking Co., Ltd.

1,000,000

1,000,000

2,000,000

2,000,000

500,000

500,000

500,000

500,000

The Nomura Trust and Banking Co., Ltd.

700,000

700,000

The Bank of Tokyo-Mitsubishi UFJ, Ltd.

500,000

500,000

Sumitomo Mitsui Banking Corporation

500,000

500,000

Mizuho Bank, Ltd. (Note 5)

500,000

500,000

500,000

500,000

Sumitomo Mitsui Trust Bank, Limited

500,000

500,000

The Nomura Trust and Banking Co., Ltd.

1,000,000

1,000,000

Mitsubishi UFJ Trust and Banking
Corporation

Aug. 26, 2011

Date of
Repayment

1.51625

Dec. 3, 2012

1.83625

May 23, 2013

1.74250

Sep. 29, 2013

1.99875

Sep. 30, 2013

2.14360

Feb. 27, 2014

Method of
Repayment

Note(Note 4)

Unsecured/
UninsuredSep. 30, 20112.13625

Feb. 27, 2014

0.79500

Feb. 27, 2014

0.79500

Feb. 27, 2014

Balloonpayment

Development Bank of Japan, Inc.

Aug. 27, 2009

80,00080,0002.10000(Note 2)

(Note 2)Development Bank of Japan, Inc.

Feb. 26, 2010

100,000

100,000

2.03000(Note 3)(Note 3)

15,652,000

22,752,000

Subtotal

Use ofBorrowings

400,000

Mitsubishi UFJ Trust and Banking
Corporation

Taiyo Life Insurance Company

Average
Interest
Rate (%)(Note 1)

- 27 -

Long-term debt
Outstanding
as of May31, 2013(¥000)

Outstanding asof Dec. 1, 2012(¥000)The Bank of Tokyo-Mitsubishi UFJ, Ltd.

500,000

500,000

Sumitomo Mitsui Banking Corporation

500,000

500,000

320,000

320,000

400,000

400,000

Sumitomo Mitsui Trust Bank, Limited

700,000

700,000

The Chiba Bank, Ltd.

750,000

750,000

1,000,000

1,000,000

1,400,000

1,400,000

1,000,000

1,000,000

Financial Institutions

Date Borrowed

Mizuho Bank, Ltd. (Note 5)
Mitsubishi UFJ Trust and Banking
Corporation

Aug. 27, 2012

Mizuho Bank, Ltd. (Note 5)
Sumitomo Mitsui Trust Bank, Limited

Sep. 5, 2011

Mitsui Sumitomo Insurance Co., Ltd.

Average Interest
Rate (%) (Note1)

Date of
Repayment

0.73000

Aug. 27,2014

0.94700

Sep. 5,2014

The Bank of Fukuoka, Ltd.

Feb. 26, 2010

1,000,000

1,000,000

1.79200

Development Bank of Japan, Inc.

May 15, 2007

1,300,000

1,300,000

2.23500

The Nomura Trust and Banking Co., Ltd.

1,000,000

1,000,000

The Iyo Bank, Ltd.

1,000,000

1,000,000

1,900,000

1,900,000

Mizuho Trust & Banking Co., Ltd.

1,000,000

1,000,000

The Tokyo Tomin Bank, Limited

500,000

500,000

The Bank of Tokyo-Mitsubishi UFJ, Ltd.

1,800,000

1,800,000

Sumitomo Mitsui Banking Corporation

1,800,000

1,800,000

2,500,000

2,500,000

Mitsubishi UFJ Trust and Banking
Corporation

1,800,000

1,800,000

Sumitomo Mitsui Trust Bank, Limited

1,800,000

1,800,000

4,700,000

4,700,000

4,700,000

4,700,000

Resona Bank, Ltd.

Mizuho Bank, Ltd. (Note 5)

The Bank of Tokyo-Mitsubishi UFJ, Ltd.

Feb. 27, 2012

Feb. 27, 2012

Dec. 26, 2011

Sumitomo Mitsui Banking Corporation
Mitsubishi UFJ Trust and Banking
Corporation

Dec. 26, 2011
4,700,000

4,700,000

1,100,000

1,100,000

1,100,000

1,100,000

Shinkin Central Bank

1,720,000

1,720,000

The Bank of Tokyo-Mitsubishi UFJ, Ltd.

1,300,000

1,300,000

Sumitomo Mitsui Banking Corporation

1,300,000

1,300,000

900,000

900,000

Mitsui Sumitomo Insurance Co., Ltd.
Daido Life Insurance Company

Aug. 27, 2012

Mizuho Bank, Ltd. (Note 5)
Mitsubishi UFJ Trust and Banking
Corporation

Aug. 27, 2012
900,000

900,000

Sumitomo Mitsui Trust Bank, Limited

520,000

520,000

Aozora Bank, Ltd.

500,000

500,000- 28 -

0.96365

Method of
Repayment

Use ofBorrowings

Note

Balloonpayment(Note 4)

Unsecured/
UninsuredFeb. 26,
2015
Feb. 27,
2015

Feb. 27,2015

1.00900

Aug. 27,2015

1.00000

Dec. 26,2015

1.11700

Jun. 26,2016

1.08500

Aug. 27,2017

1.12013

Feb. 27,2018

Outstanding
as of May31, 2013(¥000)

Outstanding asof Dec. 1, 2012(¥000)

400,000-

400,000-

Mizuho Bank, Ltd. (Note 5)

400,000-

Mitsubishi UFJ Trust and Banking
Corporation

400,000-

Financial Institutions

Date Borrowed

The Bank of Tokyo-Mitsubishi UFJ, Ltd.
Sumitomo Mitsui Banking Corporation
Dec. 3, 2012

Average Interest
Rate (%) (Note1)

Date of
Repayment

1.16500

Nov. 26,
2019

Method of
Repayment

Use ofBorrowings

Note(Note 4)

Unsecured/
Uninsured

Balloonpayment
May 27,2020
May 27,2021
May 27,2021

Taiyo Life Insurance Company

May 23, 2013

1,000,000-

1.48625

Mizuho Bank, Ltd. (Note 5)

May 23, 2013

1,000,000-

1.68200

Development Bank of Japan, Inc.

May 23, 2013

3,500,000-

1.62500

Development Bank of Japan, Inc.

Aug. 27, 2009

1,240,000

1,280,000

2.10000(Note 2)

(Note 2)Development Bank of Japan, Inc.

Feb. 26, 2010

1,600,000

1,650,000

2.03000(Note 3)(Note 3)

Subtotal

57,350,000

50,340,000

Total

73,002,000

73,092,000

Note 1：The average interest rate is weighted by the balance of each borrowing as at the end of the period and rounded to the nearest fifth decimal place. As for the borrowings, which were
hedged by interest-rate swaps for the purpose of avoiding interest rate fluctuation risk, the swapped interest rates are used to calculate the weighted average of interest.
Note 2：Instalments of ¥40 million will be made on the 27th day of every 6th month starting on February 27, 2010, with the remaining payment of ¥1,080 million to be repaid on August 27,
2016.
Note 3：Instalments of ¥50 million will be made on the 26th day of every 6th month starting on August 26, 2010, with the remaining payment of ¥1,350 million to be repaid on February 26,
2017.
Note 4：The use of borrowings is to purchase property-related assets, the related miscellaneous expenses and the repayment of borrowings.
Note 5：Mizuho Corporate Bank, Ltd. and Mizuho Bank, Ltd. merged on July 1, 2013 to become Mizuho Bank, Ltd. as indicated here.

- 29 -

3. STATUS OF INVESTMENT CORPORATION BONDS
The status of investment corporation bonds issued as of May 31, 2013 is as follows.
Name of Bonds

Issue Date

Balance as of
May 31, 2013(¥ mln)Balance as of
Nov. 30, 2012(¥ mln)First Series Unsecured Investment
Feb. 25, 2011
5,000
Corporation Bonds
Second Series Unsecured Investment
Feb. 24, 2012
5,000
Corporation Bonds
Total
10,000Note 1: The uses of proceeds are to repay borrowings.
Note 2: Ranking Pari Passu among the specified investment corporation bonds.

Interest
Rate
(%)

5,000

1.21

Feb. 25, 2016

5,000

1.03

Feb. 24, 2017

10,000

4. STATUS OF SHORT-TERM INVESTMENT CORPORATION BONDS
Not applicable.

- 30 -

Maturity Date

Method of
Repayment

Use ofProceeds

Note

Balloonpayment(Note 1)

(Note 2)

Trading during the 13th Fiscal Period
1. STATUS OF REAL ESTATES AND ASSET-BACKED SECURITIES TRADING
Acquisition
Type of Asset

Name of Property

Transfer

Price (¥000)

Date

Trust
Beneficial Interest

URBAN STAGE Mejiro (Note 3)

May 30, 2013

Real Estate

URBAN STAGE Toritsu Daigaku

Real Estate

URBAN STAGE Minami Gyotoku I

Price (¥000)

Date(Note 1)

(Note 1)

Book Value(¥000)

Gain (Loss)(¥000)(Note 2)

1,260,000

－

－

－

－

－

－

February 26,
2013

564,000

539,503

8,918

－

－

March 21,2013

365,000

345,995

9,291

929,000

885,495

18,210Total

1,260,000

Note 1: “Acquisition Price” and “Transfer Price” do not include various costs (intermediary fees, taxes and duties, etc.) required for acquisition or transfer of the property (the purchase andsale price of the real estate, etc., as indicated in the Transfer Agreement of Trust Beneficial Interest or Real Estate).
Note 2: For transfer, other sales expenses in addition to the above have been incurred, and “Gain (Loss)” is inclusive of this amount.
Note 3: After acquiring Trust Beneficial Interest, whose real estate is trust property, on the date of acquisition shown above, the Company dissolved the Trust Contract and held the property
as real estate.

2. STATUS OF OTHER ASSETS
Not applicable. In addition, the Company’s assets other than the above mentioned properties and asset-backed securities, aremostly comprised of direct bank deposits and bank deposits in trust.

3. PRICE INVESTIGATION(1) Real Estates
Acquisition/Transfer
Acquisition/Transfer

Type of Asset

Name of Property
Date

Acquisition

Real Estate (Note 2)

URBAN STAGE Mejiro

Transfer

Real Estate

URBAN STAGE Toritsu Daigaku

Transfer

Real Estate

URBAN STAGE Minami Gyotoku I

Price (¥000)

Appraisal Value (¥000)(Note 1)

May 30, 2013

1,260,000

1,310,000

February 26, 2013

564,000

459,000

March 21, 2013

365,000

308,000

Note 1: “Acquisition Price” and “Transfer Price” do not include various costs (intermediary fees, taxes and duties, etc.) required for acquisition or transfer of the property (the purchase andsale price of the real estate, etc., as indicated in the Transfer Agreement of Trust Beneficial Interest or Real Estate).
Note 2: After acquiring Trust Beneficial Interest, whose real estate is trust property, on the date of acquisition shown above, the Company dissolved the Trust Contract and held the property
as real estate.

(2) Others
With regard to the properties the Company has traded but not included in the above table “(1) Real Estate,” the price investigation procedures
were conducted by Akira Sugai C.P.A. Office subject to the requirement by Article 201 of the Investment Trust Act.
For the 13th fiscal period (from December 1, 2012 to May 31, 2013), one interest-rate swap transaction was subject to investigation. Akira
Sugai C.P.A. Office was requested to investigate the details of the relevant transaction including the name of counterparty, agreed figures, type offinancial product or index, the trading period, and the contents of the relevant derivatives transactions. The investigation report has been received.

- 31 -

4. TRANSACTIONS WITH RELATED PARTIES AND MAJOR SHAREHOLDERS(1) Transactions
Not applicable.
(2) Fees Paid to Related Parties and Major Shareholders
Table of fees paid to related parties and major shareholders during the 13th fiscal period is as follows.
Item

Name of Related Party and Major Shareholders

Amount Paid (A)(¥000)

Real estate, etc. intermediary fees
Contract-out fees
Property management fees
Commission
Advertising

Total Amount Paid
(B)(¥000)
11,01091,324
132,803
1,034
600

Portion(A) / (B)(%)

65,85016.7%
Nomura Real Estate Development Co., Ltd.
199,946
45.7%
Nomura Living Support Co., Ltd.
Nomura Living Support Co., Ltd.
288,760
46.0%
Nomura Living Support Co., Ltd.
106,829
1.0%
Nomura Real Estate Urban Net Co., Ltd.
1,824
32.9%
Note: The term “related parties” refers to related parties of Asset Management Companies as stipulated by Article 123 of the Enforcement Order of the Act on Investment Trusts andInvestment Corporations and by Article 26, Paragraph 1, Item 27 of the Regulations Concerning Investment Reports of Investment Trusts and Investment Corporations, issued by theInvestment Trusts Association, Japan. The term “major shareholders” refers to major shareholders of Asset Management Companies as defined by Article 29-4, Paragraph 2 of the
Financial Instruments and Exchange Act.

In addition, the following are the property management fees paid to related party Nomura Living Support Co., Ltd. shown as abreakdown by property.
Property Name

Property Management Fees(¥000)PROUD FLAT Shirokane Takanawa
PROUD FLAT Yoyogi Uehara
PROUD FLAT Hatsudai
PROUD FLAT Shibuya Sakuragaoka
PROUD FLAT Gakugei Daigaku
PROUD FLAT Meguro Gyoninzaka
PROUD FLAT Sumida Riverside
PROUD FLAT Kagurazaka
PROUD FLAT Waseda
PROUD FLAT Shinjuku Kawadacho
PROUD FLAT Sangen Jaya
PROUD FLAT Kamata
PROUD FLAT Kamata II
PROUD FLAT Shinotsuka
PROUD FLAT Kiyosumi Shirakawa
PROUD FLAT Monzen Nakacho II
PROUD FLAT Monzen Nakacho I
PROUD FLAT Fujimidai
PROUD FLAT Asakusa
PROUD FLAT Yokohama
PROUD FLAT Kamioooka
PROUD FLAT Tsurumi II
PRIME URBAN Akasaka
PRIME URBAN Tamachi
PRIME URBAN Yoyogi
PRIME URBAN Bancho
PRIME URBAN Chiyoda Fujimi
PRIME URBAN Iidabashi
PRIME URBAN Ebisu
PRIME URBAN Naka Meguro
PRIME URBAN Gakugei Daigaku
PRIME URBAN Senzoku
PRIME URBAN Meguro Ohashi Hills
PRIME URBAN Hakusan
PRIME URBAN Yotsuya Gaien Higashi
PRIME URBAN Nishi Shinjuku I
PRIME URBAN Shinjuku Naitomachi
PRIME URBAN Sangen Jaya
PRIME URBAN Chitose Funabashi
PRIME URBAN Osaki

5,006
1,716
1,353
1,247
2,069
1,872
4,821
2,071
2,346
1,192
2,814
3,327
3,675
1,255
614
1,628
2,587
1,562
2,906
4,215
1,943
3,059
1,844
1,693
1,022
2,541
1,765
3,017
1,832
2,241
1,491
883
3,527
1,435
2,948
2,833
642
1,569
2,185
3,718

- 32 -

Property Name

Property Management Fees(¥000)PRIME URBAN Omori
PRIME URBAN Otsuka
PRIME URBAN Shinyurigaoka
PRIME URBAN Kawaguchi
URBAN STAGE Azabu Juban
URBAN STAGE Naka Ochiai
URBAN STAGE Roka Koen
URBAN STAGE Kamiuma
URBAN STAGE Sangen Jaya
URBAN STAGE Sangen Jaya II
URBAN STAGE Komazawa
URBAN STAGE Yoga
URBAN STAGE Oimachi
URBAN STAGE Oimachi II
URBAN STAGE Yukigaya
URBAN STAGE Nakano
URBAN STAGE Takaido
URBAN STAGE Komagome
URBAN STAGE Mukojima
URBAN STAGE Ekoda
URBAN STAGE Takinokawa
URBAN STAGE Asakusa
URBAN STAGE Machiya
URBAN STAGE Koganei
URBAN STAGE Kumegawa
URBAN STAGE Toritsu Daigaku

2,123
2,032
1,068
3,558
2,755
2,078
1,034
1,390
1,321
992
817
1,781
1,048
3,008
2,013
1,084
2,694
1,506
1,760
758
616
1,337
583
975
3,469
504

5. STATUS OF BUSINESS WITH THE ASSET MANAGEMENT COMPANY OVER ITS SUBSIDIARY BUSINESS
Although Nomura Real Estate Asset Management Co., Ltd., the asset management company of the Company, conducts subsidiarybusiness of Type II Financial Instruments Business, and Building Lots and Buildings Transaction Business there is no relevant
matter under this subject as of May 31, 2013.

- 33 -

Other Information
1. NOTICE
Date of Approval of
the Board of Directors

December 14, 2012

Subject

Summary

Comprehensive
Resolution Regarding theIssuance of Investment
Corporation Bonds

A comprehensive resolution regarding the issuance of investment
corporation bonds during the period from December 14, 2012 to December
13, 2013 and within an aggregate amount of issuance of 100 billion yen was
adopted, candidate companies for the entrustment of administration
concerning the investment corporation bonds, etc. were approved, andselection of the party to which such entrustment shall be made and decisionof other necessary matters were left to the discretion of the Executive
Director.

2. STATUS OF BENEFICIAL INTEREST IN INVESTMENT TRUSTS ESTABLISHED BY THE COMPANY
Not applicable.

3. OTHER MATTERS
From 1 page to 34 pages of this report, the numbers of amount below unit are truncated and the numbers in percentage are rounded
to unit unless otherwise mentioned specifically.

- 34 -

Financial Section

Contents
36
38
39
40
41

Balance Sheet
Statement of Income and Retained Earnings
Statement of Changes in Net Assets
Statement of Cash Flows
Notes to Financial Statements- 35 -

Balance Sheet
Thousands of Yen
As of November 30, 2012

As of May 31, 2013ASSETS
Current Assets:
Cash and bank deposits¥6,757,152¥6,562,440

31,51328,460-126

Other current assets

68,94656,382

Allowance for doubtful accounts

(418)

(588)

6,857,193

6,646,820

Land

84,035,986

83,755,751

Buildings and structures

73,957,112

73,679,949

Machinery and equipment

1,017,467

1,018,097

Tools, furniture and fixtures

120,766

90,838

6,313

15,072

159,137,644

158,559,707(9,480,681)(8,572,502)

149,656,963

149,987,205

Intangible assets

2,580

3,101

Security deposits

10,87910,879Long-term prepaid expenses

1,162

1,294

Deferred investment corporation bond issuance costs

47,24354,514

61,86469,788¥156,576,020¥156,703,813

Rental receivables
Income taxes refundable

Total current assets

Property and Equipment, at Cost:

Construction in progress
SubtotalLess accumulated depreciation
Net property and equipment

Investments and Other Assets:

Total investments and other assets

Total Assets

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

- 36 -

As of May 31, 2013

Thousands of Yen
As of November 30, 2012

LIABILITIESCurrent Liabilities:
Trade accounts payable¥218,478¥203,216

Other accounts payable292,165

305,481

15,652,000

13,552,000

137,301

168,845

Accrued income taxes

1,069

605

Accrued consumption taxes

14,714

12,165

Rent received in advance

660,264

656,113

Other current liabilities

3,063

2,375

16,979,054

14,900,800

Investment corporation bonds

10,000,000

10,000,000

Long-term debt

57,350,000

59,540,000

Security deposits from tenants

1,408,684

1,426,343

Total long-term liabilities

68,758,684

70,966,343

Total Liabilities

85,737,738

85,867,143

68,961,323

68,961,323

Retained earnings

1,876,959

1,875,347

Total surplus

1,876,959

1,875,347

Total unitholders’ equity

70,838,282

70,836,670

Total Net Assets

70,838,282

70,836,670¥156,576,020¥156,703,813

Current portion of long-term debt
Accrued expenses

Total current liabilities

Long-term Liabilities:

NET ASSETS
Unitholders’ Equity:
Unitholders’ capital
Surplus

Total Liabilities and Net Assets
The accompanying notes to financial statements are an integral part of these statements.

- 37 -

Statement of Income and Retained Earnings
Thousands of Yen
For the period
from December 1, 2012
to May 31, 2013

For the period
from June 1, 2012
to November 30, 2012

Operating Revenues and Expenses
Operating Revenues:
Real estate rental revenues
Gain on sales of real estate¥5,238,905

Operating Expenses:
Real estate rental expenses
Asset management fees
Asset custody fee
Administrative service fees
Provision of allowance for doubtful accounts
Bad debts expenses
Other operating expenses

Operating Profit¥5,174,636

18,210-5,257,115

5,174,636

2,252,269

2,131,898

375,948

379,006

14,962

14,96923,10526,701

257

161

52

200

157,082

168,948

2,823,675

2,721,883

2,433,440

2,452,753

Non-Operating Revenues and Expenses
Non-Operating Revenues:
Interest income
Income from casualty insurance for property
Reversal of dividends payable
Other non-operating revenues

644

629

2,421

3,135

466

864

72

106

3,603

4,734

465,391

477,314

27,29436,80656,24955,709

7,270

7,270

2,782

3,894

558,986

580,993

Ordinary Income

1,878,057

1,876,494

Income before Income Taxes

1,878,057

1,876,494

1,199

1,167

17

57

1,876,841

1,875,270

118

77¥1,876,959¥1,875,347

Non-Operating Expenses:
Interest expense
Loan arrangement fees
Interest expense on investment corporation bonds
Amortization of investment corporation bond issuance costs
Other non-operating expenses

Income Taxes:
Current
Deferred
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.

- 38 -

Statement of Changes in Net Assets
For the period from December 1, 2012 to May 31, 2013
Thousands of Yen

Unitholders’CapitalUnits

Balance as of November 30, 2012

Unitholders’ Equity
SurplusRetained
Earnings

Total Surplus

Total Unitholders’EquityTotal
Net Assets

150,936¥ 68,961,323¥1,875,347¥1,875,347¥70,836,670¥70,836,670

Cash distribution paid--

(1,875,229)(1,875,229)(1,875,229)(1,875,229)

Net income--

1,876,841

1,876,841

1,876,841

1,876,841

150,936¥ 68,961,323¥1,876,959¥1,876,959¥70,838,282¥70,838,282

Balance as of May 31, 2013

For the period from June 1, 2012 to November 30, 2012
Thousands of Yen
Unitholders’CapitalUnits

Unitholders’ Equity
SurplusRetained
Earnings

Total Surplus

Total Unitholders’EquityTotal
Net Assets

Balance as of May 31, 2012

150,936¥ 68,961,323¥1,856,892¥1,856,892¥70,818,215¥70,818,215

Cash distribution paid--

(1,856,815)(1,856,815)(1,856,815)(1,856,815)

Net income--

1,875,270

1,875,270

1,875,270

1,875,270

150,936¥ 68,961,323¥1,875,347¥1,875,347¥70,836,670¥70,836,670

Balance as of November 30, 2012

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

- 39 -

Statement of Cash Flows
Thousands of Yen
For the period
from June 1, 2012
to November 30, 2012

For the period
from December 1, 2012
to May 31, 2013

Cash Flows
Cash Flows from Operating Activities
Income before income taxes
Depreciation
Amortization of investment corporation bonds issuance costs¥ 1,878,057¥ 1,876,494

967,194

967,547

7,270

7,270

Interest income

(644)

(629)

Interest expense

521,640

533,023

Increase (Decrease) in allowance for doubtful accounts
Decrease (Increase) in rental receivables
Decrease (Increase) in consumption taxes receivable

(170)

(459)

(3,052)

6,832-

33,7948,604(8,359)

Increase (Decrease) in trade accounts payable

15,261(19,334)

Increase (Decrease) in other accounts payable(35,902)40,414

2,549

12,165

Increase (Decrease) in rent received in advance

4,151

Decrease in tangible fixed assets due to sales

885,499(25,982)-

Decrease (Increase) in prepaid expenses

Increase (Decrease) in accrued consumption taxes

Other
SubtotalInterest received
Interest paid
Income taxes paid
Net cash provided by (used in) operating activities(19,957)(5)4,230,500

3,422,771

644

629

(553,183)(546,556)(610)(1,181)

3,677,351

2,875,663

Cash Flows from Investing Activities
Payments for purchases of property and equipment(1,497,857)(844,690)

Reimbursement of security deposits to tenants(167,190)(134,852)

Proceeds from security deposits from tenants

149,531

136,949(1,515,516)(842,593)

Proceeds from short-term debt-

800,000

Repayment of short-term debt-

(800,000)

Net cash provided by (used in) investing activities

Cash Flows from Financing Activities

Proceeds from long-term debt

7,100,000

12,510,000

Repayment of long-term debt
Payments of investment corporation bonds issuance costs(7,190,000)-(12,600,000)(501)

Distributions to unitholders(1,877,123)(1,858,219)(1,967,123)(1,948,720)

194,71284,350Cash and Cash Equivalents at Beginning of Period

6,562,440

6,478,090

Cash and Cash Equivalents at End of Period¥6,757,152¥6,562,440

Net cash provided by (used in) financing activities
Net Increase (Decrease) in Cash and Cash Equivalents

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

- 40 -

Notes to Financial Statements
1. ORGANIZATION
Nomura Real Estate Residential Fund, Inc. (the “Company”) is a real estate investment corporation formed to own and invest primarily inresidential rental properties. The Company is externally managed by a licensed asset management company, Nomura Real Estate AssetManagement Co., Ltd. (“NREAM”). NREAM is a wholly-owned subsidiary of Nomura Real Estate Holdings, Inc.
On August 3, 2006, the Company was incorporated under the Act on Investment Trusts and Investment Corporations (the “Investment Trust Act”)
of Japan. On February 14, 2007, the Company was listed on the Tokyo Stock Exchange as the 41st J-REIT and started operations on thefollowing day. As of May 31, 2013, the Company owned a portfolio of 152 residential rental properties containing an aggregate of
approximately 262,961.11 square meters of leasable area and leased space to 152 tenants.

2. BASIS OF PRESENTATIONThe Company maintains its accounting records and prepares its financial statements in accordance with accounting principles generally acceptedin Japan (“Japanese GAAP”), including provisions set forth in the Investment Trust Act of Japan, the Companies Act of Japan, the Financial
Instruments and Exchange Act of Japan and related regulations, which are different in certain respects as to the application and disclosure
requirements of International Financial Reporting Standards.
The accompanying financial statements are a translation of the audited financial statements of the Company, which were prepared inaccordance with Japanese GAAP and were presented in the Securities Report of the Company 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 havebeen rounded to the nearest thousand of yen in the accompanying financial statements and the notes thereto, whereas amounts were truncated in
the Japanese financial statements prepared in accordance with Japanese GAAP.
The Company’s fiscal period is a six-month period which ends at the end of May or November. The Company 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 or less 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
3 - 70 years
Structures
2 - 50 years
Machinery and equipment
3 - 15 years
Tools, furniture and fixtures
3 - 15 years
Intangible assets
Intangible assets are amortized by the straight-line method.
Long-term prepaid expenses
Long-term prepaid expenses are amortized by the straight-line method.
Impairment of fixed assets
The Company 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 the write-down is recorded as an impairment loss during
the period in which it occurs. No impairment losses have been recognized to date.
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.
Allowance for doubtful accounts
For allowance for doubtful accounts against possible losses arising from default on receivables,uncollectable amount is estimated and recorded byinvestigating collectability based on historical loan loss ratios for general receivables and on a case-by-case examination for doubtful and otherspecific receivables.
Accounting treatment of beneficial interests in real estate
All assets and liabilities held in trust, for which the real estate in possession of the Company was entrusted, and all related earnings and expenses
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- 41 -

life of each lease. Utility charge reimbursements are recognized when earned and their amounts 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 toproperty are generally imposed based on the value of the relevant property and incurred for 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 the assessment made by the local
government. The amount applicable to the buyer of a property is usually settled between each party and capitalized as part of the acquisition costof the property. The capitalized property related taxes amounted to ¥2,703 thousand for the six-month period ended May 31, 2013 and ¥1,816
thousand for the six-month period ended November 30, 2012.
Income taxes
Deferred tax assets and liabilities are computed based on the differences between the financial statements and income tax bases of assets andliabilities 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.
Derivative financial instruments
The Company utilizes interest-rate swap contracts as derivative financial instruments only for the purpose of hedging its exposure to changes ininterest rates. The Company defers recognition of gains or losses resulting from changes in the fair value of interest-rate swap contracts whichmeet the criteria for deferral hedge accounting.
Although the deferred hedge treatment is generally applied, the Company applies special treatment to those interest-rate swap contracts thatmeet the criteria for such special treatment. Under the special treatment, interest-rate swaps are not remeasured at fair value; instead, the net
amount paid or received under the interest rate swap contract is recognized and included in interest expense or income.

4. CASH AND CASH EQUIVALENTS
Cash and cash equivalents as of May 31, 2013 and November 30, 2012 consist of the following:Thousands of Yen
As of May 31, 2013

As of November 30, 2012

Cash and bank deposits¥6,757,152¥6,562,440

Cash and cash equivalents¥6,757,152¥6,562,440

5. SCHEDULE OF PROPERTY AND EQUIPMENT
Property and equipment as of May 31, 2013 and November 30, 2012 consist of the following:Thousands of Yen
As of May 31, 2013
Acquisition costs
Land¥ 60,568,584

As of November 30, 2012

Book value

Acquisition costs

Book value¥60,568,584¥ 55,094,496

53,747,095(5,726,118)

709,312(205,840)(37,908)

53,215(30,903)38,840

6,313

6,313

15,072

15,072Land in trust

23,467,402

23,467,402

28,661,255

28,661,255

Buildings and structures in trust

13,390,091

Buildings and structures
Accumulated depreciation
Machinery and equipment
Accumulated depreciation
Tools, furniture and fixtures
Accumulated depreciation
Construction in progress

Accumulated depreciation
Machinery and equipment in trust

60,567,021(6,819,926)(2,346,079)(33,998)
29,643

Accumulated depreciation

740,747

69,74315,704,894
11,044,012

71,510

Accumulated depreciation

52,248,937

946,587

91,123Tools, furniture and fixtures in trust

Total

57,975,055

945,957(236,645)¥55,094,496(2,569,647)

13,135,247

71,51037,512(31,369)

40,141

21,095(6,125)23,518(8,625)

12,470¥149,656,963¥149,656,963¥149,987,205¥149,987,205- 42 -

6. SHORT-TERM DEBT
Short-term debt as of May 31, 2013 and November 30, 2012 consist of the following:
As of November 30, 2012

As of May 31, 2013
Amount(Thousands of Yen)

Amount(Thousands of Yen)

Weighted-averageinterest rate

Weighted-averageinterest rate
(Note 1)

(Note 1)

Unsecured loans from banks due on December 3, 2012--

¥1,600,000

1.51625%

Unsecured loans principally from banks due on May 23, 2013--

5,500,000

1.83625%¥5,472,000

1.74250%

5,472,000

1.74250%

800,000

1.99875%

800,000

1.99875%

Unsecured loans from banks due on February 27, 2014

2,000,000

2.14360%--

Unsecured loans from an insurance company due on February 27, 2014

2,000,000

2.13625%--

Unsecured loans from banks due on February 27, 2014

1,700,000

0.79500%--

Unsecured loans from banks due on February 27, 2014

3,500,000

0.79500%--

80,0002.10000%

80,0002.10000%

2.03000%

100,000

2.03000%

Unsecured loans from banks due on September 29, 2013
Unsecured loans from an insurance company due on September 30, 2013

Unsecured loans from a bank due on August 27, 2016 (Note 2)
Unsecured loans from a bank due on February 26, 2017 (Note 3)
Total

100,000¥13,552,000¥15,652,000

Note1: 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
for the borrowings, which were hedged by interest-rate swaps for the purpose of avoiding interest rate fluctuation risk, the swapped interest rates are used to
calculate the weighted average of interest.
Note2: Installments of ¥40 million will be made on the 27th day of every sixth month starting on February 27, 2010, with the remaining payment of ¥1,080 million
to be repaid on August 27, 2016.
Note3: Installments of ¥50 million will be made on the 26th day of every sixth month starting on August 26, 2010, with the remaining payment of ¥1,350 million to
be repaid on February 26, 2017.

7. LONG-TERM DEBT
Long-term debt as of May 31, 2013 and November 30, 2012 consist of the following:
As of November 30, 2012

As of May 31, 2013
Amount(Thousands of Yen)

Amount(Thousands of Yen)

Weighted-averageinterest rate

Weighted-averageinterest rate
(Note 1)

(Note 1)

Unsecured loans from banks due on February 27, 2014--

¥2,000,000

2.14360%

Unsecured loans from an insurance company due on February 27, 2014--

2,000,000

2.13625%

Unsecured loans from banks due on February 27, 2014--

1,700,000

0.88417%

Unsecured loans from banks due on February 27, 2014--

3,500,000

0.88417%

Unsecured loans from banks due on August 27, 2014

¥3,170,000

0.73000%

3,170,000

0.81917%

Unsecured loans principally from banks due on September 5, 2014

3,400,000

0.94700%

3,400,000

0.94700%

Unsecured loans from a bank due on February 26, 2015

1,000,000

1.79200%

1,000,000

1.79200%

Unsecured loans from a bank due on February 27, 2015

1,300,000

2.23500%

1,300,000

2.23500%

Unsecured loans from banks due on February 27, 2015

5,400,000

0.96365%

5,400,000

0.96365%

Unsecured loans from banks due on August 27, 2015

9,700,000

1.00900%

9,700,000

1.00900%

Unsecured loans from a bank due on December 26, 2015

4,700,000

1.00000%

4,700,000

1.00000%

Unsecured loans from banks due on June 26, 2016

9,400,000

1.11700%

9,400,000

1.11700%
1.08500%

Unsecured loans principally from insurance companies due on August27, 2017
Unsecured loans from banks due on February 27, 2018

3,920,000

1.08500%

3,920,000

5,420,000

1.12013%5,420,000

1.12013%

Unsecured loans from banks due on November 26, 20191,600,000

1.16500%--

Unsecured loans from an insurance company due on May 27, 2020

1,000,000

1.48625%--

Unsecured loans from a bank due on May 27, 2021

1,000,000

1.68200%--

Unsecured loans from a bank due on May 27, 2021

3,500,000

1.62500%--

Unsecured loans from a bank due on August 27, 2016 (Note 2)

1,240,000

2.10000%

1,280,000

2.10000%

Unsecured loans from a bank due on February 26, 2017 (Note 3)

1,600,000

2.03000%

1,650,000

2.03000%

Total¥57,350,000¥59,540,000

Note1: 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
for the borrowings, which were hedged by interest-rate swaps for the purpose of avoiding interest rate fluctuation risk, the swapped interest rates are used to- 43 -

calculate the weighted average of interest.
Note2: Installments of ¥40 million will be made on the 27th day of every sixth month starting on February 27, 2010, with the remaining payment of ¥1,080 million
to be repaid on August 27, 2016.
Note3: Installments of ¥50 million will be made on the 26th day of every sixth month starting on August 26, 2010, with the remaining payment of ¥1,350 million to
be repaid on February 26, 2017.

The scheduled repayment amounts of long-term debt for each of the five years after the balance sheet date (excluding the current portion of
long-term debt) are as follows.

Long-term debt

1-2 years
14,450,000

2-3 years
14,580,000

3-4 years
11,880,000

Thousands of Yen
4-5 years
9,340,000

8. INVESTMENT CORPORATION BONDS
Details of investment corporation bonds outstanding are summarized as follows:
As of November 30, 2012

As of May 31, 2013
AmountWeighted- average(Thousands of Yen)
interest rate
First series of unsecured investment corporation bonds
Due on February 25, 2016
Second series of unsecured investment corporation bonds
Due on February 24, 2017
Total

Amount(Thousands of Yen)

Weighted- averageinterest rate

¥5,000,000

1.21000%¥5,000,000

1.21000%

5,000,000

1.03000%

5,000,000

1.03000%¥10,000,000¥10,000,000

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

Investment corporation bonds

Within a year－

1-2 years－

2-3 years
5,000,000

3-4 years
5,000,000

Thousands of Yen
4-5 years－

9. UNITHOLDERS’ EQUITYThe Company 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. The Company is required to maintain net assets of at least ¥50,000 thousand as set forth in theInvestment Trust Act.

10. PER UNIT INFORMATIONThe net asset values per unit and the net income per unit as of May 31, 2013 and November 30, 2012 were as follows:

Net asset values per unit
Net income per unit

For the period
from December 1, 2012
to May 31, 2013
¥469,326¥12,434

For the period
from June 1, 2012
to November 30, 2012
¥469,315¥12,424

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

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

For the period
from December 1, 2012
to May 31, 2013
¥1,876,841¥1,876,841
150,936- 44 -For the period
from June 1, 2012
to November 30, 2012
¥1,875,270¥1,875,270
150,936

11. RELATED PARTY TRANSACTIONS
For the periods from December 1, 2012 to May 31, 2013 and from June 1, 2012 to November 30, 2012
Parent Company and major corporate unitholders
For the six-month period from December 1, 2012 to May 31, 2013 were as follows:

Category

Major corporate
unitholders

Name ofcompany orindividual

Address

Nomura Real
EstateDevelopment
Co.,Ltd

Shinjuku-ku
Tokyo

Paid incapital orinvestment(Thousands of
Yen)

Business
description

2,000,000

Real estatebusiness

Voting rights
holding ratio(％)

Nature oftransaction

Dealing
Held throughmediation for
direct ownershipreal estate
10.10(Note2)

Transaction
amount(Thousands of
Yen)(Note1)

11,010

Balance at end of period

Account

Amount(Thousands of
Yen)

－

－

Note1: Consumption taxes are not included in the transaction amount.
Note2: Terms and conditions of transaction are decided through negotiation based on the actual condition of the market.

Not applicable from June 1, 2012 to November 30, 2012
Subsidiaries and affiliates
Not applicable
Fellow subsidiary companies
Not applicable
Directors and major individual unitholders
Not applicable

12. INCOME TAXESThe Company, as an investment corporation, is subject to corporate income taxes at a statutory tax rate of approximately 40% for the six-month
periods ended May 31, 2013 and November 30, 2012. 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 such amounts. 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.
Since the Company distributed in excess of 90% of its distributable income in the form of cash distributions totaling ¥1,836,891 thousandand ¥1,875,229 thousand for the six-month periods ended May 31, 2013 and November 30, 2012, respectively, such distributions were treated as
deductible distributions for purposes of corporate income taxes. The following summarizes the significant differences between the statutory tax
rate and the effective tax rate:
For the period
For the period
from June 1, 2012
from December 1, 2012
to November 30, 2012
to May 31, 2013
Statutory tax rate
36.59%
36.59%
Deductible cash distributions(36.56)(35.78)Other
0.04(0.75)
Effective tax rate
0.07%
0.06%

13. 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 ofinvestment 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 withwell-diversified maturities.
The Company enters into derivative transactions only for the purpose of reducing risk of future interest rate fluctuations and does not engage
in speculative transactions.
(2) Type and Risk of Financial Instruments and Related Risk Management
Debts and investment corporation bonds are primarily used to fund the acquisition of property-related assets as well as the repayment of debts andredemption of investment corporation bonds. The Company is exposed to liquidity risk of being unable to meet its obligations on scheduled due
dates. The Company controls and limits such risk by diversifying not only the financial institutions, but also the type of financing to include theeffective use of surplus funds and direct financing from the capital markets such as issuance of investment units. In addition, the Company is
exposed to the market risk arising from fluctuations in interest rates on its floating-rate debts. However, the effect of such risk on the operation of
the Company is limited by maintaining the LTV ratio at low levels and the ratio of long-term fixed-rate debts 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 debts by swapping such floating-rate interest payments for fixed-rate interest payments.
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.

- 45 -

(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, fairvalue 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 “20. Derivatives and Hedge
Accounting” below do not represent the market risk involved in these derivative transactions.
Fair Value of Financial Instruments
For the period from December 1, 2012 to May 31, 2013
The following table summarizes the carrying value and the estimated fair values of financial instruments as of May 31, 2013.
Thousands of Yen

( i )
(ii)
(iii)
(iv)
(v)

Carrying value (Note 1)¥6,757,152(15,652,000)(10,000,000)(57,350,000)－

Cash and bank deposits
Current portion of long-term debt
Investment corporation bonds
Long-term debt
Derivative transactions

Fair value (Note 1)¥6,757,152(15,721,396)(10,098,440)(57,605,931)－

Difference－¥69,396
98,440255,931－

For the period from June 1, 2012 to November 30, 2012
The following table summarizes the carrying value and the estimated fair values of financial instruments as of November 30, 2012.
Thousands of Yen

( i )
(ii)
(iii)
(iv)
(v)

Carrying value (Note 1)¥6,562,440(13,552,000)(10,000,000)(59,540,000)－

Cash and bank deposits
Current portion of long-term debt
Investment corporation bonds
Long-term debt
Derivative transactions

Fair value (Note 1)¥6,562,440(13,634,080)(10,136,900)(60,049,377)－

Difference－¥82,080
136,900
509,377－

Note1: The numbers in parenthesis indicate liabilities.
Note2: 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
the market interest rates within a short-term period. (However, the fair value of certain floating-rate long-term debt that qualifies for the special treatment
of interest-rate swaps (see “20. Derivatives and Hedge Accounting”) is determined by discounting the sum of its principal and interest payments net ofany 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-ratelong-term debt is determined 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 “20. Derivatives and Hedge Accounting”.
Note3: Redemption schedule for cash and bank deposits as of May 31, 2013
Thousands of Yen

Cash and bank deposits
Total

Due within one
year¥6,757,152

After one year,
within two years－

After two years,
within three years－

After three years,
within four years－

After four years,
within five years－¥6,757,152

－

－

－

－

After five years－－

Redemption schedule for cash and bank deposits as of November 30, 2012
Thousands of Yen

Cash and bank deposits
Total

Due within one
year¥6,562,440

After one year,
within two years－

After two years,
within three years－

After three years,
within four years－

After four years,
within five years－¥6,562,440

－

－

－

－

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After five years－－

Note4: Redemption schedule for investment corporation bonds and debt as of May 31, 2013
Thousands of Yen
Due within one
year

After one year,
within two years

After two years,
within three years

After three years,
within four years

After four years,
within five years

After five years

Current portion of long-term debt
Investment corporation bonds¥15,652,000
－

－
－

－
¥5,000,000－¥5,000,000

－
－

－
－

Long-term debt
Total－
¥15,652,000¥14,450,000¥14,450,000

14,580,000¥19,580,000

11,880,000¥16,880,000¥9,340,000¥9,340,000¥7,100,000¥7,100,000

Redemption schedule for investment corporation bonds and debt as of November 30, 2012
Thousands of Yen
Due within one
year

After one year,
within two years

After two years,
within three years

After three years,
within four years

After four years,
within five years

After five years

Current portion of long-term debt
Investment corporation bonds¥13,552,000
－

－
－

－
－

－
¥5,000,000－¥5,000,000－－

Long-term debt
Total－
¥13,552,000¥15,950,000¥15,950,000¥17,580,000¥17,580,000

15,320,000¥20,320,000

5,270,000¥10,270,000¥5,420,000¥5,420,000

14. INVESTMENT AND RENTAL PROPERTIESThe Company owns in its portfolio certain residential buildings (including land) for lease located in Tokyo and other areas. The following tablesummarizes the carrying value and the estimated fair value of these properties.
Thousands of Yen
For the period
from December 1, 2012
to May 31, 2013

For the period
from June 1, 2012
to November 30, 2012

Carrying value
Balance at beginning of the period¥149,987,205¥150,107,048

Change during the period(330,242)(119,843)

Balance at end of the period

149,656,963

149,987,205

Fair value¥143,063,000¥141,836,000
Note1: The carrying value represents the acquisition cost less accumulated depreciation.
Note2: The major increase in the carrying value during the period ended May 31, 2013 was mainly due to the acquisition of URBAN STAGE Mejiro (¥1,346,890
thousand), and the major decrease in the carrying value during the period ended May 31, 2013 was mainly due to the sale of URBAN STAGE Toritsu
Daigaku (¥539,503 thousand) and URBAN STAGE Minami GyotokuⅠ(¥345,996 thousand). The major increase in the carrying value during the period
ended November 30, 2012 was mainly due to the acquisition of URBAN STAGE Koganei Honcho (¥759,517 thousand), and the major decrease in the
carrying value during the period ended November 30, 2012 was a result of posting of depreciation .
Note3: The fair value as of May 31, 2013 and November 30, 2012 represents the sum of the appraisal values estimated by external real estate appraisers.

The real estate rental revenues and expenses for the six-month period ended May 31, 2013 and November 30, 2012 are presented in “16.
Breakdown of Real Estate Rental Revenues and Expenses.”

15. SEGMENT INFORMATION
For the period from December 1, 2012 to May 31, 2013 and from June 1, 2012 to November 30, 2012
Segment Information
Since the Company has been engaged in the real estate leasing business as a single segment, segment information has been omitted.
Related Information
1. Information about products and services
Since revenues from external customers of 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, geographical breakdown ofrevenues 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, geographical breakdown ofproperty and equipment has been omitted.

- 47 -

3. Information about major clients
Information about major clients for the six-month period ended May 31, 2013 and November 30, 2012 were as follows:
For the six-month period from December 1, 2012 to May 31, 2013
Name of client
Nomura Living Support Co., Ltd.
Haseko Livenet Inc.

Revenues(Thousands of yen)
¥2,353,561
1,332,585

Related segment
Real estate leasing business
Real estate leasing business

For the six-month period from June 1, 2012 to November 30, 2012
Name of client
Haseko Livenet Inc.
Nomura Living Support Co., Ltd.

Revenues(Thousands of yen)
¥1,319,972
1,253,005

Related segment
Real estate leasing business
Real estate leasing business

16. BREAKDOWN OF REAL ESTATE RENTAL REVENUES AND EXPENSES
Real estate rental revenues and expenses for the six-month period ended May 31, 2013 and November 30, 2012 consist of the following:Thousands of Yen
For the period
from December 1, 2012
to May 31, 2013
Real estate rental revenues

For the period
from June 1, 2012
to November 30, 2012

¥5,238,905¥5,174,636

4,836,943

4,833,156

4,570,277

4,567,410

266,666

265,746

Other rental revenues

401,962

341,480

Parking revenues

132,230

134,998

Incidental income

201,810

148,722

Other miscellaneous revenues

67,922

57,7602,252,269

2,131,898

Property management costs

199,946

200,280

Property management fees

288,761

266,350

Property and other taxes

259,941

256,024

Utility expenses

96,50479,098Casualty insurance

8,380

8,744

Repairs and maintenance

251,156

178,147

Depreciation

967,194

967,547

Other rental expenses

180,387

175,708¥2,986,636¥3,042,738

Rental revenues
Rental revenues
Common area charges

Real estate rental expenses

Real estate rental profits

17. BREAKDOWN OF GAIN AND LOSS ON SALES OF REAL ESTATE
Gain on sales of real estate for the six-month period ended May 31, 2013 and November 30, 2012 consist of the following:Thousands of Yen
For the period
from December 1, 2012
to May 31, 2013

For the period
from June 1, 2012
to November 30, 2012

Gain on sales of real estate
Proceeds from sales of real estate¥931,699-

Cost of sales of real estate

885,499-

Other related sales expenses

27,990-Gain on sales of real estate¥18,210-

18. BREAKDOWN OF TRANSACTIONS WITH MAJOR UNITHOLDERS
Transactions with major unitholders for the six-month period ended May 31, 2013 and November 30, 2012 consist of the following:Thousands of Yen
For the period
from December 1, 2012
to May 31, 2013

For the period
from June 1, 2012
to November 30, 2012

From operating transactions
Other related sales expenses (Note)¥11,010-

Note: Gain on sales of real estate is caluculated by deducting other related sales expenses.

19. LEASESThe Company, as a lessor, enters into lease agreements for which fixed monthly rents are due in advance with a lease term of generally two years- 48 -

for residencial space. The future minimum rental revenues under existing non-cancelable operating lease agreements as of May 31, 2013 andNovember 30, 2012 are summarized as follows:
As of May 31, 2013
Due within one year
Due after one year
Total

Thousands of Yen
As of November 30, 2012
¥452,796
28,277¥481,073¥404,047
7,884¥411,931

20. DERIVATIVES AND HEDGE ACCOUNTING
Derivative transactions as of May 31, 2013
(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
Notional amount

Hedge accounting
methodType of derivative
instruments

Main hedged item

Special treatment ofinterest-rate swaps

Interest-rate swaps:
Received/floating
and paid/fixedLong-term debt

Due after one year
44,392,000

36,920,000

Fair value

Method used for
determining fair value(*)* Since the derivative financial instruments qualifying for the special treatment of interest-rate swaps are accounted for as one transaction together
with their hedged item, long-term debt, the fair value of these derivatives is included in that of related long-term debt (see “13. Financial
Instruments (Note2) (ii) Current portion of long-term debt and (iv) Long-term debt”).
Derivative transactions as of November 30, 2012
(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
Notional amount

Hedge accounting
methodType of derivative
instruments

Main hedged item

Special treatment ofinterest-rate swaps

Interest-rate swaps:
Received/floating
and paid/fixedLong-term debt

Due after one year
44,992,000

37,920,000

Fair value

Method used for
determining fair value(*)* Since the derivative financial instruments qualifying for the special treatment of interest-rate swaps are accounted for as one transaction together
with their hedged item, long-term debt, the fair value of these derivatives is included in that of related long-term debt (see “13. Financial
Instruments (Note2) (ii) Current portion of long-term debt and (iv) Long-term debt”).

21. SIGNIFICANT SUBSEQUENT EVENTS(1) Issuance of New Investment units
The Company resolved to issue new investment units at the Board of Directors’ meetings held on August 9, 2013 and August 19, 2013. The
payment for the issuance of 9,306 new investment units through the public offering was completed on August 26, 2013 and the payment for
the issuance of new investment units through the third-party allotment offering will be completed on September 25, 2013.
(a) Issuance of new investment units through public offering (Primary Offering)Number of units newly issued:
9,306 units
Total issue price (Total offer price):¥4,173,741,000 (¥448,500 per unit)
Total issue amount (Total amount paid in):
¥4,028,195,160 (¥432,860 per unit)
Payment date:August 26, 2013
Initial date for dividend accrual:
June 1, 2013(b) Issuance of new investment units through third-party allotment
Number of units newly issued:
558 units
Total issue amount (Total amount paid in):
¥241,535,880 (¥432,860 per unit)
Payment date:
September 25, 2013
Initial date for dividend accrual:
June 1, 2013
Allotee:
Nomura Securities Co., Ltd.
In the case where the investment units to be issued through the third-party allotment are not subscribed for, in whole or in part, the final
number of the investment units with respect to the third-party allotment may be reduced by the number of units not subscribed for, or theissuance itself may be cancelled entirely.
(c) Use of proceeds
The proceeds procured by the public offering and third-party allotment will be used to acquire URBAN STAGE Ebisu, URBAN STAGE
Meguro Aobadai, URBAN STAGE Gakugeidaigaku, URBAN STAGE Nihonbashi Hamacho, URBAN STAGE Kagurazaka, URBAN STAGE
Ikebukuro, and URBAN STAGE Sakaisuji Honmachi which the Company expects to acquire on September 3, 2013, including expenses
related to the acquisitions.

- 49 -

(2) Transfer of a property
On June 27, 2013, the Company entered into a sale and purchase agreement regarding the transfer of the property stated below and completed thetransfer. Consumption taxes and adjustments of property taxes are excluded from the transfer price.
PRIME URBAN Kita Senzoku
Type of Assets: Real estate
Date of Agreement: June 27, 2013
Transfer Date
: June 27, 2013
Transfer Price: ¥597 million
Transferee: Japanese industrial company
Impact on Revenues: Approximately ¥9million (sales expenses excluded) of gain on sales of real estate will be recorded for the 14th fiscal
period (from June 1, 2013 to November 30, 2013).

- 50 -

Independent Auditor’s Report- 51 -

Business Structure
Asset Custodian

General Administration(Financial Agent)

The FundGeneral Administration

Financial Agent
Agreement

Administration ofUnitholders Register
Management ofSpecial Accounts
Mitsubishi UFJ
Trust and Banking Corporation

Theof
The Bank
Bank ofTokyo-Mitsubishi UFJ, Ltd.
Tokyo-Mitsubishi UFJ, Ltd.

Asset Custody
Agreement

Sumitomo Mitsui
Banking Corporation

Administration
Agreement, etc.

General Administration(Accounting, etc.)

Nomura Real Estate Residential Fund, Inc.
Accounting Service
Agreement

Unitholders Meeting

Heiseikaikeisha Tax
Corporation

Board of Directors Meeting
Financial Institutions, etc.
AuditorErnst & Young ShinNihon LLC

Repaymentof Principal& Interest

Debt
Finance
Debt

Investment

Rent, etc.

Select the best property
management companies
for each property

Distribution
Property Management
Agreement

Property
Management

Trade

Unitholders

EquityResidential Properties(Real Estate Related Assets)

Property Management
Companies

CapitalInvestment

Asset

Unitholders

Instructions for
Rent &
Management

Asset Management
Services Agreement
Information & ResearchService Providers

Asset Management Company
Property
Information

Rental Strategies,
Plans for
Repairs, etc.

Nomura Real Estate
Development Co., Ltd.
Nomura Real Estate
Urban Net Co., Ltd.

Corporate Data
Corporate Name
Nomura Real Estate Residential Fund, Inc.
Corporate Office8-5-1 Nishi Shinjuku Shinjuku-ku, Tokyo
160-0023, Japan
http://www.nre-rf.co.jp/english/
Date of Incorporation
August 3, 2006
Stock Listing
Tokyo Stock Exchange (Securities Code: 3240)
Fiscal Period
Six months ending on May 31 and November 30
Capital¥68,961,322,596 (as of May 31, 2013)
Number of Units Issued
150,936 (as of May 31, 2013)

Transfer Agent
Mitsubishi UFJ Trust and Banking Corporation
1-4-5 Marunouchi Chiyoda-ku, Tokyo 100-8212, Japan
Business Office of the Transfer Agent
Corporate Agency Department
Mitsubishi UFJ Trust and Banking Corporation
7-10-11 Higashisuna Koto-ku, Tokyo 137-8081, Japan
Tel: +81-3-5683-5111
Independent Auditors
Ernst & Young ShinNihon LLC
Hibiya Kokusai Bldg. 2-2-3 Uchisaiwai-cho Chiyoda-ku,
Tokyo 100-0011, Japan
Investor Relations
For further information, please contact the Asset Management
Company:
Nomura Real Estate Asset Management Co., Ltd.
8-5-1 Nishi Shinjuku, Shinjuku-ku, Tokyo 160-0023, Japan
Tel: +81-3-3365-7729

Number of Unitholders
10,720(as of May 31, 2013)- 52 -

Nomura Real Estate Residential Fund’s Website
The Company strives to provide accurate and timely disclosure of information by utilizing the website.
・ Strength of NRF, Asset Management Policies, Corporate Profile
・ Portfolio Summary, Portfolio Data, Occupancy Rates.
・ News, Latest Data, Performance, Distributions, Calendar
We continue to provide information timely and strive to enhance the contents of the website.

（URL） http://www.nre-rf.co.jp/english/

Posting the news by year and subject

Posting summaries, maps, occupancy
rates, etc, of the portfollio

Posting the latest occupancy rates

Disclaimer
This semiannual report includes translations of certain Japanese documents originally filed under the Financial Instruments and Exchange Act
of Japan. This report was prepared in English solely for the convenience of and reference by readers outside Japan and should not be
considered as a disclosure statement. The original Japanese documents always govern the meaning and interpretation.
In general, accounting principles and practices used by real estate investment corporations in Japan (“J-REITs”) in preparing its
financial statements conform with accounting principles generally accepted in Japan (“Japanese GAAP”). However, they may differ fromgenerally accepted accounting principles applied in certain other countries. Potential investors should consult their own professional advisors
for an understanding of the differences between Japanese GAAP and generally accepted accounting principles in the United States (“U.S.
GAAP”) or other jurisdictions and how those differences might affect the financial information contained herein.
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 any specific products. Investors wishing to purchase the investment units of
Nomura Real Estate Residential Fund, Inc. should contact their own securities brokers or dealers. A fee may be charged by your financial
instruments business operator in relation to the sale or purchase of investment units.
Although the information contained in this document is intended to be complete and thorough, there is no assurance of precision and safety ofthe 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 the information contained in this document
without express prior written consent.

- 53 -