June 24, 2020
To All Concerned Parties
Issuer of Real Estate Investment TrustSecurities:
Nippon Accommodations Fund Inc.
Takashi Ikeda, Executive Director(TSE Code: 3226)
Investment Trust Management Company:
Mitsui Fudosan Accommodations
Fund Management Co., Ltd.
Tateyuki Ikura, President and CEO
Inquiries: Tetsuji Kawakami, CFO andDirector(TEL: +81-3-3246-3677)

Notification Concerning Acquisition of Domestic Real Estate Property(Park Cube Oimachi Residence)
This is a notification that Mitsui Fudosan Accommodations Fund Management Co., Ltd., an investment trust
management 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 Cube Oimachi Residence(2)Type of property to be acquiredReal estate (70% co-ownership interest) (Note 1)(3)

Planned acquisition price¥4,064,900,000 (Note 2)(4)

Appraised value¥4,450,000,000 (Note 3)(5)

Date of conclusion of sale contract

June 24, 2020

(6)

Planned date of handoverJuly 1, 2020

(7)

Seller

ITOCHU Property Development, 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 70% co-ownership interest in the real estate property. The remaining 30% co-ownershipinterest is owned by Mitsui Fudosan Residential Co., Ltd.
(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 May 31, 2020) prepared by Daiwa
Real Estate Appraisal Co., Ltd., and is the amount equivalent to NAF’s 70% 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
Completion date (Note 4)
Structure / Number of stories (Note5)
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

Park Cube Oimachi Residence
Real estate (70% of co-ownership interest)
Daiwa Real Estate Appraisal Co., Ltd.
¥4,450,000 thousand
May 31, 2020
22-16, Oi 1-chome, Shinagawa-ku, Tokyo
80%
600%, 500%
Commercial district
803.36 m2
Co-ownership of proprietorship (70% co-ownership interest)
January 10, 2018
Flat-roofed reinforced concrete structure / 15 stories
Apartment building, store
5,835.06 m2
Co-ownership of proprietorship (70% co-ownership interest)
170 residential, 1 retail, etc.
4,271.17 m2
None(Arrangements with the co-owner)
With co-ownership of the proprietorship in the property by
NAF (70% co-ownership interest) and a co-owner (30% coownership interest), a co-ownership agreement (the“Agreement”) is scheduled to be concluded between the coowner 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-owner thathas the majority ownership interest. Specific matters(reconstruction, etc.) shall require the agreement of all
co-owners.
② If NAF or the co-owner is to transfer its own coownership interest to a third party, the transfer must be
all at once to a single transferee.
③ If NAF or the co-owner intends to transfer its own coownership 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 4-minute walk from Oimachi Station on theJR Keihin-Tohoku Line, the Tokyo Waterfront Area Rapid
Transit Rinkai Line and the Tokyu Oimachi Line, offering
access to multiple train stations and lines.
There are not only department stores, electronics retailstores and other large-scale commercial facilities, but also
several shopping districts (Oi Sanpia, Oi Ginza, etc.) linedwith restaurants, merchandise stores, etc., and even
Shinagawa Ward Office and other public facilities, offeringexcellent convenience in daily life. Demand from working
individuals living alone, DINKs, etc. placing importance on
locational conditions can be expected.

2

Total number of tenants

Details ofleasing(Note 7)1

Rentable units

119 residential, 1 retail, etc.

Rented units

114

Rentable area

2,989.82 m2

Rented area

2,855.78 m2

Occupancy rate

95.5%

Deposit / Security deposit¥23,375 thousand

Monthly rental revenue¥16,305 thousand(Note 1) “Appraised value” and “date of value appraisal” are based on the real estate appraisal report prepared by Daiwa Real EstateAppraisal Co., Ltd., and the amount is the amount equivalent to NAF’s 70% 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 70%, which is NAF’s ownership ratio.
(iii) “Rented units,” “rented area” and “deposit / security deposit” denote figures as of April 30, 2020, based on the material
received from the seller, and are calculated by multiplying the figures for the entire property to be acquired by 70%, whichis 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 70%, 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 April 30, 2020 (including common service fees and excluding
usage fees of attached facilities such as parking lot and trunk room) by 70%, 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 dateJune 15, 2020
Investigations
Urgent repair cost－
into the state ofShort-term
repaircost－building
Repairandrenewal
costs
expected(Note 1)
¥26,939 thousand
to be necessary within 12 years
Replacement value¥989,730 thousand
Consigned investigating company
Tokio Marine & Nichido Risk Consulting Co., Ltd.
Earthquake risk
Investigation report dateJune 15, 2020
diagnosis
PML value (Note 2)
4.0%(Note 1) Amounts are calculated by multiplying the amounts for the entire property to be acquired by NAF’s 70% 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 earthquakesanticipated 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, 2020)

ITOCHU Property Development, Ltd.
9-11, Akasaka 2-chome, Minato-ku, TokyoNorio Matsu, President
Construction and sales of apartments and detached houses, etc.
¥10,225 million
December 1, 1997
Not disclosed
Not disclosed
Stockholder name
ITOCHU Corporation

Shareholding ratio
100.0%

Relationship with NAF or the investment trust management company
There are no capital relationships between NAF or the investment trust
Capital relationships
management company and the seller.
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 trustBusiness relationships
management company and the seller.
The seller does not fall under the category of related parties of NAF or theApplicability toinvestment trust management company.
related parties
5. Situation of the acquirer of the property
The property to be acquired is not an acquisition from a party classified as having a relationship of special
interest with NAF or the investment trust management company. Therefore, the situation of the acquirer is notstated.
6. Outline of brokerage
Not applicable.
7. Transactions with related parties and the like
Mitsui Fudosan Residential Lease Co., Ltd., which will be the master lease company and property managementcompany for the property to be acquired, corresponds to related parties and the like (see Note). Therefore, theconclusion of a master lease contract and property management contract has undergone deliberation andapproval by the compliance committee and is scheduled to later undergo deliberation and decision by theinvestment committee of the investment trust management company in accordance with NAF’s self-establishedrules 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 has
concluded 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., during the course of due diligence
upon acquisition of properties besides building certification investigations performed by an inspection andcertification 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), and the period ending February 28, 2021 (30th Period: September 1, 2020
to February 28, 2021), will be minor, and there will be no change to financial results forecast for the periods.

410. Summary of appraisal report
Appraised value¥4,450,000 thousand (Note)

Appraisal company

Daiwa Real Estate Appraisal Co., Ltd.

Date of value appraisal

May 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)
4,450,000

4,550,000
289,413(a) Potential gross revenue

305,789(b) Vacancy loss, etc.

16,375(2) Operating expenses[(c)+(d)+(e)+(f)+(g)+(h)+(i)+(j)](c) Maintenance expenses6,540
1,549(e) Repair expenses

2,949(f) Property management fees

9,866(g) Tenant soliciting fees, etc.

8,480(h) Taxes and public dues

14,950(i) Property insurance fees

356(j) Other expenses

619(k) Earnings from temporary
deposits

326

3,958

(4) Net income [(3)+(k)−(l)]240,468

Value calculated by discounted cash flow
methodPosted 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 cost associated with evacuation of lessees
by making reference to actual amounts of past fiscal
years and levels at similar real estate.
Appraised by making reference to levels at similar realestate.
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.,
making reference to actual records of past fiscal years,etc.

244,100(l) Capital expenditures(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.

45,313(d) Utilities expenses(3) Net operating income [(1)−(2)]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 ofearnings found by the direct capitalization method.

3.7%

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.
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.

4,400,000

Discount rate

3.5%

Terminal cap rate

3.9%

5

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.

Cost method value

3,250,000

Land ratio

68.7%

Building ratio

31.3%Other items considered by the appraisal
company in making the appraisal－(Note) “Appraised value,” “value of earnings,” “value calculated by the direct capitalization method,” “value calculated by discounted cash flow method”
and “cost method value” are the amounts equivalent to NAF’s 70% ownership interest. The items other than those are the amounts for theentire property.

＜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/

6＜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¥316,208 million

Number of Investment Properties

128 properties

Total Rentable Units (including retail units)

12,559 units

Proportion of Investment by Asset
Planned Acquisition Price

Portfolio Share(Note 1)

(Note 2)

Rental Apartments¥300,319 million

95.0%

Hospitality Facilities¥15,889 million

5.0%¥316,208 million

100.0%

Grand Total
Proportion of “Rental Apartments” by Area

Planned Acquisition Price

Portfolio Share(Note 1)

(Note 3)

Tokyo 23 Wards¥265,438 million

88.4%

Greater Tokyo (Note 4)¥12,326 million

4.1%

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

7.5%¥300,319 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

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

8

9

Oimachi Station10