March 22, 2022
To All Concerned Parties
Issuer of Real Estate Investment Trust
Securities:
Nippon Accommodations Fund Inc.
Takashi Ikeda, Executive Director(TSE Code: 3226)
Investment Trust Management Company:
Mitsui Fudosan Accommodations FundManagement Co., Ltd.
Tateyuki Ikura, President and CEO
Inquiries: Tetsuji Kawakami, CFO and
Director(TEL: +81-3-3246-3677)

Notification Concerning Acquisition of Domestic Real Estate Property(Park Axis Kikukawa)This is a notification that Mitsui Fudosan Accommodations Fund Management Co., Ltd., an investment trust
management company, which has been 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 Kikukawa(2) Type of property to be acquired

Real estate(3) Planned acquisition price¥2,410,000,000 (Note 1)(4) Appraised value¥2,680,000,000 (Note 2)(5) Date of conclusion of sale contract

March 22, 2022

(6) Planned date of handover

April 4, 2022 (Note 3)(7) Seller

Mitsui Fudosan Residential Co., Ltd.

(8) Acquisition fundBorrowings and own funds(9) Method of payment

Full payment at the time of handover(Note 1)

“Planned acquisition price” denotes the trading value (exclusive of miscellaneous expenses for acquisition, fixed property
taxes, urban planning taxes, consumption taxes, and local consumption taxes) specified in the contract for the sale ofreal estate for the property to be acquired.

(Note 2)

”Appraised value” is based on the amount mentioned in the real estate appraisal report (date of value appraisal:
December 31, 2021) prepared by Daiwa Real Estate Appraisal Co., Ltd. for the property to be acquired.

(Note 3)

In accordance with the contract for the sale of real estate, the planned handover date may be changed to a dateseparately agreed by the buyer and the seller (a date up to April 4, 2022).

<Caution> This document is a press release intended for general publication regarding NAF's acquisition of real estate properties and is notfor purposes of soliciting investment. When investing, we ask that investors exercise their own judgment taking full responsibility after having
read carefully the new investment unit issuance and secondary offering prospectus, or any corrections thereof (if made), prepared by NAF.
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)Land
ZoningSite area (Note 3)
Ownership form
Completion date
(Note 4)Structure / number ofstories (Note 5)
Uses (Note 5)
Building
Gross floor area
(Note 5)
Ownership form
Rentable units
Rentable area
Existence of security interests
Special affairs (Note 6)

Special features of the property

Total number oftenants
Rentable units
Details of
leasing(Note 7)Park Axis Kikukawa
Real estate
Daiwa Real Estate Appraisal Co., Ltd.
¥2,680,000 thousand
December 31, 2021
14-24, Kikukawa 3-chome, Sumida-ku, Tokyo
80%
500%
Commercial zone
552.44 m2
Proprietorship
June 20, 2014
Flat-roofed reinforced concrete structure / 10 stories
Apartment building, parking, bicycle parking, garbage depot, storage
3,378.28 m2
Proprietorship81
2,595.60 m2
None
None
The property is a 4-minute walk from Kikukawa Station on the Toei
Shinjuku Subway Line and an 8-minute walk from Sumiyoshi Stationon the Toei Shinjuku Subway Line and Tokyo Metro Hanzomon Line,
offering access to multiple train stations and lines.
It offers excellent convenience in daily life as there are major
supermarkets in the surrounding areas of Kikukawa Station. Demand
from working individuals living alone and DINKS households that place
importance on locational conditions can be expected.

181Rented units

75

Rentable area

2,595.60 m2

Rented area

2,416.63 m2

Occupancy rate
Deposit /Security deposit
Monthly rental
revenue

93.1%¥16,911 thousand¥10,114 thousand(Note 1) “Appraised value” and “date of value appraisal” are based on the description in the real estate appraisal report prepared by
Daiwa Real Estate Appraisal Co., Ltd. for the property to be acquired.
(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.

<Caution> This document is a press release intended for general publication regarding NAF's acquisition of real estate properties and is notfor purposes of soliciting investment. When investing, we ask that investors exercise their own judgment taking full responsibility after having
read carefully the new investment unit issuance and secondary offering prospectus, or any corrections thereof (if made), prepared by NAF.
2

(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 that NAF plans to acquire.
(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 concluded with Mitsui
Fudosan Residential Lease Co., Ltd. as the master lease company. The “total number of tenants” above is therefore thenumber of tenants after such a master lease agreement is concluded.

(ii) “Rentable units” denotes the number of units that can be rented within the entire property that NAF plans to acquire.
(iii) “Rented units,” “rented area” and “deposit / security deposit” denote figures as of January 31, 2022, based on the report
received from the seller.
(iv) “Rentable area” denotes the total area of the building that can be rented within the entire property that NAF plans toacquire.
(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 the monthly rents (including common service fees and excluding usage fees of attachedfacilities such as parking lot and trunk room) indicated in the lease agreement concluded between the master lease
company and end tenants as of January 31, 2022. Figures less than ¥1 thousand are rounded down and consumption
tax is excluded from the figure.

(2) Outline of investigations into the state of the building, etc.
Consigned investigating
Tokio Marine dR Co., Ltd.
company
Investigation report date
January 18, 2022
Urgent repair cost－
Investigations
into the state of Short-term repair cost－building
Repair and renewal costs
expected to be necessary ¥52,959 thousand
within 12 years
Replacement value¥808,300 thousand
Consigned investigating
Tokio Marine dR Co., Ltd.
company
Earthquake risk
Investigation report date
January 18, 2022
diagnosis
PML value
4.9%(Note 1)
(Note 1) 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.

<Caution> This document is a press release intended for general publication regarding NAF's acquisition of real estate properties and is notfor purposes of soliciting investment. When investing, we ask that investors exercise their own judgment taking full responsibility after having
read carefully the new investment unit issuance and secondary offering prospectus, or any corrections thereof (if made), prepared by NAF.
3

4. Outline of seller
Name
Location
Representative

Mitsui Fudosan Residential Co., Ltd.
2-1, Nihonbashi-Muromachi 3-chome, Chuo-ku, Tokyo
Toru Kamura, President & CEO

Description of principal
operations

Medium and high-rise housing, detached housing, rental housing, overseas
business, urban redevelopment, reconstruction of apartments, commissioned
sales, and senior residence businesses

CapitalDate of establishment¥40,000 million
December 26, 2005

Net assets(As of March 31, 2021)
Total assets(As of March 31, 2021)¥153,103 million¥896,058 million

Major stockholders andshareholding ratio

Stockholder nameShareholding ratio
100.0%

Mitsui Fudosan Co., Ltd.
Relationship between NAF or the investment trust management company, and the seller
The seller holds 3.09% of total NAF investment units issued as of August 31,
2021. Also, the seller is a subsidiary of Mitsui Fudosan Co., Ltd., which is the
Capital 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 during the period ended August 31, 2021.
During the period ended August 31, 2021, NAF acquired three properties fromthe seller. Other than this, during the period ended August 31, 2021, there are
Business relationships
no business relationships to report between NAF or the investment trust
management company and the seller.
The seller does not fall under the category of related parties of NAF. Also, theApplicability to related seller is a subsidiary (100%) of Mitsui Fudosan Co., Ltd., which is the parent
company of the investment trust management company, and therefore falls
parties
under the category of related parties thereof.
(As of December 31, 2021)<Caution> This document is a press release intended for general publication regarding NAF's acquisition of real estate properties and is notfor purposes of soliciting investment. When investing, we ask that investors exercise their own judgment taking full responsibility after having
read carefully the new investment unit issuance and secondary offering prospectus, or any corrections thereof (if made), prepared by NAF.
4

5. Situation of the acquirer of the property
Situation of theproperty owner

Mitsui Fudosan ResidentialCo., Ltd. (Note)
Wholly owned subsidiary of
Mitsui Fudosan Co., Ltd.,
Relationship withwhich is the parent
a special relatedcompany of the investment
party
trust managementcompany
Property developed byAcquisition history,
Mitsui Fudosan Co., Ltd.
reason, etc.
(Note)
Acquisition price(including other―costs)
Acquisition time―
Name

Property: Park Axis Kikukawa(Note)

Former owner, etc.

Owner before theformer owner, etc.
None

―

―

―
―

Mitsui Fudosan Co., Ltd.’s rights and obligations in the rental housing business were succeeded by Mitsui Fudosan ResidentialCo., Ltd. as of October 1, 2015, through a company split.

6. Outlines of brokerage
Not applicable.

7. Transactions with related parties and the like
Since Mitsui Fudosan Residential Co., Ltd., which is the seller of the property to be acquired, corresponds
to related parties and the like (see Note), the real estate sales contract has been carried out through deliberation
and approval 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 have been carriedout through deliberation and approval by the compliance committee and is scheduled to later undergo
deliberation and decision 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 relatedparties and the like.
(Note)“Related parties and the like” means related parties and the like of the investment trust management company which has
concluded an asset management contract with NAF, as determined in Article 123 of the Order for Enforcement of the Act on
Investment Trust and Investment Corporation.

<Caution> This document is a press release intended for general publication regarding NAF's acquisition of real estate properties and is notfor purposes of soliciting investment. When investing, we ask that investors exercise their own judgment taking full responsibility after having
read carefully the new investment unit issuance and secondary offering prospectus, or any corrections thereof (if made), prepared by NAF.
5

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 and the like using structural design drawings, structural calculation sheets, etc., during the course ofdue diligence upon acquisition of properties, besides building certification investigations performed by aninspection 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, 2022 (33rd Period:
March 1, 2022, to August 31, 2022) will be minor, and there will be no change to financial results forecast forthe period.

<Caution> This document is a press release intended for general publication regarding NAF's acquisition of real estate properties and is notfor purposes of soliciting investment. When investing, we ask that investors exercise their own judgment taking full responsibility after having
read carefully the new investment unit issuance and secondary offering prospectus, or any corrections thereof (if made), prepared by NAF.
6

10．Summary of appraisal report
Appraised value¥2,680,000 thousand

Appraisal company

Daiwa Real Estate Appraisal Co., Ltd.

Date of value appraisal

December 31, 2021
(Unit: Thousands of yen)

Item

Value of earnings

Value calculated by the direct capitalization
method [(4)÷(5)](1) Operating revenues [(a)−(b)](a) Potential gross revenue(b) Vacancy loss, etc.
(2) Operating expenses[(c)+(d)+(e)+(f)+(g)+(h)+(i)+(j)](c) Maintenance expenses

Details

2,680,000

2,740,000
128,744
135,957

7,212

4,848
1,319

(e) Repair expenses

2,476

(f)

Property management fees

4,422(g) Tenant soliciting fees, etc.

3,543(h) Taxes and public dues

5,963

(i)

Property insurance fees(j)

Other expenses

1,139(3) Net operating income [(1)−(2)]104,735296(k) Earnings from temporary
deposits

Capital expenditures(4) Net income [(3)+(k)−(l)](5) Cap rate

Appraised after taking into account medium- to longterm competitiveness based on levels of new rent atsimilar real estate and trends of such.
Appraised by considering competitiveness of the subject
real estate, etc. based on actual vacancy rates andstandard vacancy rates of similar real estate.

24,009(d) Utilities expenses(l)Summary, etc.
Calculated by judging the value of earnings found by thediscounted cash flow method in which the value isderived by specifying future net income fluctuations to
be more convincing and also verifying with the value of
earnings found by the direct capitalization method.

95

3,389

Posted based on the planned contract amount.
Appraised based on levels at similar real estate andactual amounts of past fiscal years.
Posted repair expenses by making reference to therepair cost in the engineering report and levels of repair
expenses at similar real estate. Appraised themaintenance expenses associated with evacuation oflessees by making reference to actual amounts of pastfiscal years and levels at similar real estate.
Appraised based on making reference to levels at
similar real estate.
Appraised based on levels at similar real estate, making
reference to actual amounts of past fiscal years.
Posted by appraising based on actual amounts after
considering burden levels, land price trends andadjustments for age.
Posted based on the estimated amount.
Posted by appraising miscellaneous expenses, etc. bymaking reference to actual amounts of past fiscal years,
etc.
Posted the amount obtained when the expected amountof deposits received, etc. is multiplied by the investment
yield appraised by comprehensively taking into accountthe viewpoints of both management aspects andprocurement aspects.
Posted by making reference to the renewal cost in theengineering report and levels of renewal cost at similar
real estate.

101,441

3.7%

Appraised by taking the cap rate for similar uses locatedin the area with the lowest risk as a standard andadding/subtracting the spread attributable to the subject
real estate’s various conditions, level of current rent
against market rent and other conditions, and by making
reference to the cap rate for the same supply-demandarea, etc.

<Caution> This document is a press release intended for general publication regarding NAF's acquisition of real estate properties and is notfor purposes of soliciting investment. When investing, we ask that investors exercise their own judgment taking full responsibility after having
read carefully the new investment unit issuance and secondary offering prospectus, or any corrections thereof (if made), prepared by NAF.
7

Value calculated by discounted cash flow
method2,650,000

Discount rate

3.5%

Terminal cap rate

3.9%

Cost method value

Appraised by making reference to interviews withinvestors, etc., after using a combination of the methodof deriving by comparison with similar real estatetransactions and the method of deriving by factoring theindividual characteristics of the real estate into the yieldof financial assets.
Appraised after comprehensively taking into accountfuture trends of investment yield, risk of the subject realestate as an investment target, general projection of
future economic growth rates, real estate price trends,
etc., making reference to the market-derived cap rate ofsimilar transactions.

1,560,000

Land ratio

58.1%

Building ratio

41.9%

Other items considered by the appraisal
company in making the appraisal－<Caution> This document is a press release intended for general publication regarding NAF's acquisition of real estate properties and is notfor purposes of soliciting investment. When investing, we ask that investors exercise their own judgment taking full responsibility after having
read carefully the new investment unit issuance and secondary offering prospectus, or any corrections thereof (if made), prepared by NAF.
8

＜Attached Documents＞
1.

Portfolio list after the purchase of 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/<Caution> This document is a press release intended for general publication regarding NAF's acquisition of real estate properties and is notfor purposes of soliciting investment. When investing, we ask that investors exercise their own judgment taking full responsibility after having
read carefully the new investment unit issuance and secondary offering prospectus, or any corrections thereof (if made), prepared by NAF.
9

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

Total Planned Acquisition Price¥340,340 million

Number of Investment Properties

135 properties

Total Rentable Units (including retail units)

13,356 units

Proportion of Investment by Asset
Planned Acquisition Price

Portfolio Share(Note 1)

(Note 2)

Rental Apartments¥322,641 million

94.8%

Hospitality Facilities¥17,699 million

5.2%¥340,340 million

100.0%

Grand Total
Proportion of “Rental Apartments” by Area

Planned Acquisition Price

Portfolio Share(Note 1)

(Note 3)

Tokyo 23 Wards¥285,660 million

88.5%

Greater Tokyo (Note 4)¥14,426 million

4.5%

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

7.0%¥322,641 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) Proportion of all properties by area (including Hospitality Facilities)
Tokyo 23 wards 85.7%
Other area 14.3%(Note 7) Please refer to NAF’s website for the latest portfolio list:
https://www.naf-r.jp/portfolio/5-1.html<Caution> This document is a press release intended for general publication regarding NAF's acquisition of real estate properties and is notfor purposes of soliciting investment. When investing, we ask that investors exercise their own judgment taking full responsibility after having
read carefully the new investment unit issuance and secondary offering prospectus, or any corrections thereof (if made), prepared by NAF.
10

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

Kikukawa
Station<Caution> This document is a press release intended for general publication regarding NAF's acquisition of real estate properties and is notfor purposes of soliciting investment. When investing, we ask that investors exercise their own judgment taking full responsibility after having
read carefully the new investment unit issuance and secondary offering prospectus, or any corrections thereof (if made), prepared by NAF.
11