March 23, 2020
To All Concerned Parties
Issuer of Real Estate Investment Trust Securities
4-1, Nihonbashi 1-chome, Chuo-ku, Tokyo 103-0027
Nippon Accommodations Fund Inc.
Executive Director
Takashi Ikeda(Code Number 3226)
Investment Trust Management Company
Mitsui Fudosan Accommodations Fund Management Co., Ltd.
President and CEO
Tateyuki Ikura
Contact CFO and Director
Tetsuji Kawakami(TEL. 03-3246-3677)

Notification Concerning Acquisition of Domestic Real Estate Property(Park Axis Akatsuka)
This is a notification that Mitsui Fudosan Accommodations Fund Management Co., Ltd., an investment trustmanagement company commissioned by Nippon Accommodations Fund Inc. (“NAF”) to manage its assets,
decided on the acquisition of real estate property in Japan as shown below.
1. Reason for acquisition
Based on the provisions for investments and policies on asset management provided in the Articles ofIncorporation, the decision to acquire the following property was made to ensure the steady growth of assets
under management and for the diversification and further enhancement of the investment portfolio.

2. Overview of acquisition(1)

Name of property to be acquired

Park Axis Akatsuka(2)Type of property to be acquired

Real estate (55% co-ownership interest) (Note 1)(3)

Planned acquisition price¥2,420,000,000 (Note 2)(4)

Appraised value¥2,580,000,000 (Note 3)(5)

Date of conclusion of sale contract

March 23, 2020

(6)

Planned date of handoverMarch 30, 2020

(7)

SellerMitsui Fudosan Residential Co., Ltd.

(8)

Acquisition funds

Borrowings and own funds(9)

Method of payment

Full payment at the time of delivery(Note 1) NAF is scheduled to acquire 55% co-ownership interest in the real estate property. The seller of the property to beacquired is Mitsui Fudosan Residential Co., Ltd. The remaining 45% co-ownership interest is owned by Marubeni
Corporation and is scheduled to be acquired by United Urban Investment Corporation.
(Note 2) “Planned acquisition price” denotes the trading value (exclusive of miscellaneous expenses for acquisition, fixed propertytaxes, urban planning taxes, consumption taxes, and local consumption taxes) specified in the real estate sale contract forthe property to be acquired.
(Note 3) “Appraised value” is based on the real estate appraisal report (date of value appraisal on January 31, 2020) prepared by
JLL Morii Valuation & Advisory K.K., and is the amount equivalent to NAF’s 55% ownership interest.

13. Description of the property to be acquired(1) Outline of the property to be acquired
Name of property to be acquired
Type of property to be acquired
Appraisal company
Appraised value (Note 1)
Date of value appraisal (Note 1)
Location Residence indication
Building-to-land ratio (Note 2)
Floor-area ratio (Note 2)
Zoning
Land
Site area (Note 3)
Ownership form

Park Axis Akatsuka
Real estate (55% of co-ownership interest)
JLL Morii Valuation & Advisory K.K.
¥2,580,000 thousand
January 31, 2020
2-18, Akatsuka 2-chome, Itabashi-ku, Tokyo
80%
400%
Commercial district
1,137.49 m2
Co-ownership of proprietorship (55% co-ownership interest)

Completion date (Note 4)

September 12, 2018
Flat-roofed reinforced concrete and steel-frame structure /Structure / Number of stories (Note 5)
13 stories
Uses (Note 5)
Apartment building, store
Building Gross floor area (Note 5)5,433.60 m2
Ownership form
Co-ownership of proprietorship (55% co-ownership interest)
Rentable units
156 residential, 3 retail, etc.
Rentable area
4,370.31 m2
Existence of security interests
None(Arrangements with the co-owner)
With co-ownership of the proprietorship in the property by
NAF (55% co-ownership interest) and a co-owner (45%co-ownership interest), a co-ownership agreement (the“Agreement”) is scheduled to be concluded between theco-owner and NAF. The main content is as follows:① Matters concerning maintenance, management andoperation of the property to be acquired shall beexecuted in accordance with the will of the co-ownerthat has the majority ownership interest. Specificmatters (reconstruction, etc.) shall require theagreement of all co-owners.
Special affairs (Note 6)② If NAF or the co-owner is to transfer its own
co-ownership interest to a third party, the transfer mustbe all at once to a single transferee.
③ If NAF or the co-owner intends to transfer its own
co-ownership interest to a third party, that party shall berequired to notify the other party in writing and the otherparty shall be granted the first refusal right to purchasein the transfer of the co-ownership interest if the otherparty wishes to purchase the co-ownership interest.
④ NAF and the co-owner shall not request for partition of
the property to be acquired for a period of five years
starting from the date of conclusion of the Agreement.
The property is a 1-minute walk from Shimo-akatsuka
Station on the Tobu Tojo Line and a 3-minute walk fromChikatetsu-akatsuka Station on the Tokyo Metro YurakuchoLine and Fukutoshin Line, offering access to multiple train
stations and lines.
There is a shopping district lined with supermarkets,
Special features of the property
restaurants, etc. around the stations and a drugstore, drycleaner, etc. occupy the first floor of the property, offering
excellent convenience in daily life. Demand from businesspeople, students, etc. who place importance on locational
conditions can be expected.

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Total number of tenants

Details ofleasing(Note 7)1

Rentable units

86 residential, 2 retail, etc.

Rented units

86

Rentable area

2,403.67 m2

Rented area

2,342.99 m2

Occupancy rate

97.5%

Deposit / Security deposit¥27,718 thousand

Monthly rental revenue¥10,114 thousand(Note 1) “Appraised value” and “date of value appraisal” are based on the real estate appraisal report prepared by JLL Morii Valuation& Advisory K.K., and the amount is the amount equivalent to NAF’s 55% ownership interest.
(Note 2) “Building-to-land ratio” is the ratio of the building’s construction area to the site area as stipulated in Article 53 of the BuildingStandards Act, and the figure stipulated by city planning in accordance with zoning, etc. is indicated. “Floor-area ratio” is theratio of the building’s gross floor area to the site area as stipulated in Article 52 of the Building Standards Act, and the figure
stipulated by city planning in accordance with zoning, etc. is indicated.
(Note 3) “Site area” denotes the land area included in the register.
(Note 4) “Completion date” of the building denotes the date included in the register.
(Note 5) “Structure / Number of stories,” “uses,” and “gross floor area” are based on the description in the register.
(Note 6) “Special affairs” include issues considered to be important by NAF as of today, with consideration of influence on the rights,
uses, and appraisal values as well as profits of the property to be acquired.
(Note 7) Explanation on “details of leasing”(i)“Total number of tenants” is denoted as 1 if there is a master lease agreement (a bulk lease agreement) concluded witha master lease company. With regards to the property to be acquired, a master lease agreement is scheduled to beconcluded with Mitsui Fudosan Residential Lease Co., Ltd. as the master lease company. The “total number of tenants”
above is therefore the number of tenants after such a master lease agreement is concluded.

(ii) “Rentable units” is calculated by multiplying the number of units that can be rented within the entire property to beacquired by 55%, which is NAF’s ownership ratio.
(iii) “Rented units,” “rented area” and “deposit / security deposit” denote figures as of January 31, 2020, based on thematerial received from the seller, and are calculated by multiplying the figures for the entire property to be acquired by
55%, which is NAF’s ownership ratio.
(iv) “Rentable area” calculated by multiplying the total area of the building that can be rented within the entire property to beacquired by 55%, which is NAF’s ownership ratio.
(v) “Occupancy rate” denotes the ratio of the “rented area” against the “rentable area” and the figures are rounded to one
decimal place.
(vi) “Monthly rental revenue” is calculated by multiplying the total monthly rent indicated in the lease agreement concluded
between the master lease company and end tenant as of January 31, 2020 (including common service fees andexcluding usage fees of attached facilities such as parking lot and trunk room) by 55%, which is NAF’s ownership ratio.
Amounts are rounded down to the nearest thousand yen and do not include consumption tax.

(2) Outline of investigations into the state of the building, etc.
Consigned investigating company
Tokio Marine & Nichido Risk Consulting Co., Ltd.
Investigation report date
March 9, 2020
Investigations
Urgent repair cost－
into the state ofShort-term
repaircost－building
Repairandrenewal
costs
expected(Note 1)¥16,333 thousand
to be necessary within 12 years
Replacement value¥686,455 thousand
Consigned investigating company
Tokio Marine & Nichido Risk Consulting Co., Ltd.
Earthquake risk
Investigation report dateMarch 9, 2020diagnosis
PML value (Note 2)
3.2%(Note 1) Amounts are calculated by multiplying the amounts for the entire property to be acquired by NAF’s 55% ownership interest.
(Note 2) The report on earthquake risk diagnosis only states the views of the consigned investigating company and does not provide
any guarantee for its contents. PML (Probable Maximum Loss) value represents the rate of probable maximum loss to becaused by earthquakes. In this case, it means the extent of damage to be caused by one of the biggest earthquakes
anticipated to happen within the expected duration of service (the biggest earthquake which happens once every 475 years= 10% chance of a big earthquake happening once every 50 years) represented by the rate (%) of the estimated cost ofrestoration from the damage to the replacement cost.

34. Outline of seller
Name
Location
Representative
Description of principal
operations
CapitalDate of establishment
Net assets
Total assets
Major stockholders andshareholding ratio(As of March 31, 2019)

Mitsui Fudosan Residential Co., Ltd.
2-1, Nihonbashi-Muromachi 3-chome, Chuo-ku, Tokyo
Kiyotaka Fujibayashi, President and CEO
Housing sales and leasing operations, consignment sales operations (sales ofother companies’ properties), new operations (resort residence operations,overseas operations, etc.), etc.
¥40,000 million
December 26, 2005
Not disclosed
Not disclosed
Stockholder nameShareholding ratio
Mitsui Fudosan Co., Ltd.

100.0%

Relationship with NAF or the investment trust management company
The seller holds 3.21% of total NAF investment units issued as of February 29,
2020. Also, the seller is a subsidiary of Mitsui Fudosan Co., Ltd., which is theCapital relationships
parent company of the investment trust management company.
There are no personal relationships between NAF or the investment trust
Personal relationships
management company and the seller.
There are no business relationships between NAF or the investment trust
Business relationships
management company and the seller.
The seller does not fall under the category of related parties of NAF. Also, theseller is a wholly-owned subsidiary of Mitsui Fudosan Co., Ltd., which is theApplicability toparent company of the investment trust management company, and therefore
related parties
falls under the category of related parties of the investment trust managementcompany.
5. Situation of the acquirer of the property

Property:
Park Axis Akatsuka

Situation of theproperty owner, etc.

Former owner, etc.

Owner, etc. before theformer owner, etc.

Name

Mitsui Fudosan ResidentialCo., Ltd.

None

Wholly-owned subsidiary of
Mitsui Fudosan Co., Ltd.,
Relationship with awhich is the parent company ofspecial related partythe investment trust
management company―

Acquisition history,reason, etc.

Property developed by
Mitsui Fudosan ResidentialCo., Ltd. andMarubeni Corporation―

Acquisition price(including other costs)――

Acquisition time――

6. Outline of brokerage
Not applicable.

47. Transactions with related parties and the like
Since Mitsui Fudosan Residential Co., Ltd., the seller of the property to be acquired, corresponds to relatedparties and the like (see Note), the conclusion of a real estate sale contract has undergone deliberation andapproval by the compliance committee and deliberation and decision by the investment committee of theinvestment trust management company, in accordance with NAF’s self-established rules on asset
management relevant to transactions with related parties and the like.
Mitsui Fudosan Residential Lease Co., Ltd., which will be the master lease company and property
management company for the property to be acquired, corresponds to related parties and the like (see Note).
Therefore, the conclusion of a master lease contract and property management contract has undergone
deliberation and approval by the compliance committee and is scheduled to later undergo deliberation anddecision by the investment committee of the investment trust management company, in accordance with NAF’s
self-established rules on asset management relevant to transactions with related parties and the like.
(Note)“Related parties and the like” means related parties and the like of an investment trust management company which hasconcluded an asset management contract with NAF, as determined in the Order for Enforcement of the Act on Investment
Trusts and Investment Corporations, Article 123.

8. Earthquake resistance matters
The property to be acquired has received a structural calculation conformity judgment pursuant to the BuildingStandards Act as revised by the Act No. 92 of 2006.
In addition, NAF always entrusts earthquake risk diagnosis to the third-party investigating company to review
drawings using structural design drawings, structural calculation sheets, etc., as well as on on-site inspection
and the like during the course of due diligence upon acquisition of properties, besides building certification
investigations performed by an inspection and certification agency.
9. Outlook for management after acquisition of the property
The impact of the acquisition on NAF’s financial results for the period ending August 31, 2020 (29th Period:March 1, 2020 to August 31, 2020) will be minor, and there will be no change to financial results forecast for theperiod.

510. Summary of appraisal report
Appraised value¥2,580,000 thousand (Note)

Appraisal company

JLL Morii Valuation & Advisory K.K.

Date of value appraisal

January 31, 2020
(Unit: Thousands of yen)

Item
Value of earnings
Value calculated by the direct capitalization
method [(4)÷(5)](1) Operating revenues [(a)−(b)]Details (Note)
4,690,000
4,780,000
232,511(a) Potential gross revenue

244,246(b) Vacancy loss, etc.

11,735(2) Operating expenses[(c)+(d)+(e)+(f)+(g)+(h)+(i)+(j)](c) Maintenance expenses(d) Utilities expenses

5,750
3,013

2,796

(f) Property management fees

6,740(g) Tenant soliciting fees, etc.

10,805(h) Taxes and public dues

10,315(i) Property insurance fees

510(j) Other expenses(k) Earnings from temporarydeposits

144494
1,732(4) Net income [(3)+(k)−(l)]191,200

Value calculated by discounted cash flow
method4.0%

The cost of restoration to original condition is appraisedby taking into account actual records and theevacuation rate, making reference to levels at similar
real estate. Repair expenses are posted as 30% of astandardized amount assuming the estimate in theengineering report to be appropriate.
Adopted the scheduled contract content assuming thecontent to be appropriate, making reference to levels at
similar real estate.
Appraised by taking into account local practice and theevacuation rate of the subject real estate.
Appraised based on actual amounts, and byconsidering the fluctuation rate and annualdepreciation.
Appraised by making reference to levels at similar realestate.
Posted neighborhood association fees, etc.
Appraised by multiplying the amount obtained bysubtracting the amount equivalent to security deposits
of vacancies from the amount of security deposits, etc.
at full occupancy by yield of 1.0%.
Posted 70% of a standardized amount assuming theestimate in the engineering report to be appropriate.
Appraised by considering the income and capitalfluctuation risk, in addition to the discount rate.

4,590,000

Discount rate

3.8%

Terminal cap rate

4.2%

Cost method value

Appraised based on actual records, making reference
to levels at similar real estate.

192,438(l) Capital expenditures(5) Cap rate

Appraised medium- to long-term stable rental income,etc. based on current condition, etc.
Appraised by taking into account standard vacancy
rates and individual characteristics of the subject realestate.

40,073(e) Repair expenses(3) Net operating income [(1)−(2)]Summary, etc.
Calculated making correlation to the value of earnings
found by the direct capitalization method and the valueof earnings found by the discounted cash flow method.

Appraised by comprehensively taking into accountoverall transaction market trends, etc. after consideringrisk factors of location and individual characteristics ofthe subject real estate as well as standard cap rate.
Appraised by considering uncertainty of fluctuation
projections for future net income, future deterioration of
the building, and risk of sale, in addition to the cap rate.

2,800,000

Land ratio

53.4%

Building ratio

46.6%

Other items considered by the appraisal
company in making the appraisal－(Note) “Appraised value” is the amount equivalent to NAF’s 55% ownership interest. The items other than that are the amounts for the entire property.

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＜Attached Document＞
1. Portfolio list after the purchase of the property to be acquired is completed (on a planned acquisition price basis)
2. Photos of the property to be acquired and map of the area
NAF’s website: https://www.naf-r.jp/english/

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＜Attached Document 1＞
Portfolio list after the purchase of the property to be acquired is completed (on an acquisition (planned) price basis)

Total Planned Acquisition Price¥312,143 million

Number of Investment Properties

127 properties

Total Rentable Units (including retail units)

12,439 units

Proportion of Investment by Asset
Planned Acquisition Price

Portfolio Share(Note 1)

(Note 2)

Rental Apartments¥296,254 million

94.9%

Hospitality Facilities¥15,889 million

5.1%¥312,143 million

100.0%

Grand Total
Proportion of “Rental Apartments” by Area

Planned Acquisition Price

Portfolio Share(Note 1)

(Note 3)

Tokyo 23 Wards¥261,373 million

88.2%

Greater Tokyo (Note 4)¥12,326 million

4.2%

Other Major Cities (Note 5)¥22,555 million

7.6%¥296,254 million

100.0%

Total of “Rental Apartments”(Note 1) “Planned Acquisition Price” does not include anticipated acquisition expenses, fixed property taxes, urban
planning taxes, consumption taxes or local consumption taxes.
(Note 2) The figure indicates the percentage of asset category to the total (planned) acquisition price.
(Note 3) The figure indicates the percentage of Rental Apartments by area to the total (planned) acquisition price.
(Note 4) “Greater Tokyo” indicates Tokyo metropolis (excluding Tokyo 23 wards), and the 3 prefectures of Kanagawa, Saitama andChiba.
(Note 5) “Other major cities” indicates major cities across Japan and their surrounding areas, excluding the Tokyo area.
(Note 6) Please refer to NAF’s website for the latest portfolio list:
https://www.naf-r.jp/portfolio/5-1.html

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＜Attached Document 2＞
Photos of the property to be acquired and map of the area

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Shimo‐akatsuka Station

Yurakucho Line
Fukutoshin Line
Chikatetsu‐akatsuka Station

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