[For Translation Purposes Only]

January 23, 2024

For Immediate Release
To Whom It May Concern
Nomura Real Estate Master Fund, Inc.
Securities Code: 3462
Shuhei Yoshida, Executive Director
Asset Management Company: Nomura Real Estate Asset Management Co., Ltd.
Koki Miura, President & Chief Executive Officer
Inquiries: Hiroyuki Masuko
Executive Officer
Head of NMF Investment Management GroupTEL +81-3-3365-8767 nmf3462@nomura-re.co.jp

Notice Concerning Disposition of Property in Japan
Nomura Real Estate Master Fund, Inc. (“NMF” or the “Fund”) announces that Nomura Real Estate Asset ManagementCo., Ltd., a licensed asset management company retained by the Fund to provide asset management services, decided todispose of property (the “Disposition”) as described below.
1.

Summary of Assets to Be Disposed ofProperty Name

NRE Ueno
Building

Use

OfficeScheduled
Date of
Purchaseand Sales
Agreement

Scheduled
Date of
Disposition

January 26,
2024

April 1,
2024

Transferee

Intermediary

ScheduledTransferPrice(¥ million)

Book Value(¥ million)

Difference(¥ million)(Note 2)

(Note 3)(Note 1)

Nomura Real
EstateDevelopment,Co., Ltd.

No6,930

6,544385(Note 1) The amounts stated exclude adjustment amounts of both property taxes and city planning taxes, as well as consumption taxes and local consumption
tax, etc.
(Note 2) Anticipated book value at the date of disposition.
(Note 3) This is only a reference value which is the difference between the scheduled transfer price and the anticipated book value, therefore, it is different
from gain or loss on sale.

The above assets to be disposed of is referred to as the "Asset".

2.

Reasons for the Disposition
The Fund has continuously replaced assets as an external growth strategy mainly by acquiring sponsor developed
properties and selling properties where there are concerns about their future competitive advantage.
The Fund decided to implement the Disposition as part of such asset replacement pursuant to comprehensive
consideration of the possibility of a future decline in competitiveness as well as rising repair costs as the buildingages. Furthermore, it was determined that the sale agreement associated with the Disposition (the “Sale Agreement”),
where the transferee is the Sponsor, Nomura Real Estate Development Co., Ltd., is in the Fund’s interest as the SaleAgreement will stipulate that the Fund shall be afforded priority negotiation rights should Nomur a Real Estate
Development dispose this property in the future, including after the property has been redeveloped by Nomura Real
Estate Development.
The entire profits on sale will be evenly distributed across four fiscal periods —from the fiscal period ending
August 31, 2024 to the fiscal period ending February 28, 2026—based on the strategies stated in the presentationmaterials for the fiscal period ended August 31, 2023 that was released on October 18, 2023.

－ １ －3.

Summary of the Asset to be Disposed of
Property Name
Type of AssetRegistry

Location(Note 1)

StreetAccessCompletion Date (Note 1)
Use (Note 1)
Structure (Note 1)
Land
Floor Area
Land
Type ofOwnership
Building
Building Coverage Ratio
Floor Area Ratio
Collateral
Property Management Company
Master Leasing Company
Type of Master Leasing
Area(Note 1)

Seismic Risk (PML)(Note 3)
Notes
Acquisition Price(Note 4)
Scheduled Transfer PriceBook Value(Note 5)
Difference
Appraisal Value and Method
Appraisal NOI (Note 6)

NRE Ueno Building
Real estate
1-42-1 (comprising five parcels of land) Higashi-Ueno, Taito Ward,Tokyo
1-14-4 Higashi-Ueno, Taito Ward, Tokyo
Three-minute walk from Okachimachi Station on the JR Yamanote
Line and Keihin-Tohoku Line
One-minute walk from Naka-okachimachi Station on the Tokyo
Metro Hibiya Line
One-minute walk from Ueno-okachimachi Station on the Toei OedoLine
Five-minute walk from Ueno-hirokoji Station on the Tokyo Metro
Ginza Line
March 30, 1990
Bank, Parking, OfficeTen-floor steel-reinforced concrete structure with a flat roof and 1
basement floor
891.02m2
7,117.78 m2
Ownership
Ownership
100%(Note 2)
800%
None
Nomura Real Estate Development Co., Ltd.
－－
5.4% (Based on the Earthquake PML Appraisal Report as ofSeptember 2023 by Sompo Risk Management Inc.)
Nomura Real Estate Development Co., Ltd., the property
management company, is considered a related party under theInvestment Trust Act.
¥6,470 million¥6,930 million¥6,544 million¥385 million¥6,900 million (Based on the capitalization approach as of August 31,2023)(Appraiser: Japan Real Estate Institute)¥251 million

Leasing Status (As of January 23, 2024) (Note 7)
Total Number of Tenants
Total Rental
Income(Annual)
Security Deposits
Occupancy Rate

Total Leased Floor Space
Total Leasable Floor SpaceHistorical Occupancy Rates

9¥254 million (including common area charges)¥195 million
81.1%
3,890.64 m2
4,798.90 m2
August 2019

August 2020

August 2021

August 2022

August 2023

100.0%

100.0%

100.0%

100.0%

81.1%(Note 1) Location and Other Items
Location (registry), Completion Date, Use, Structure and Area are based on the information in the real estate registry.
(Note 2) Building Coverage Ratio
The Asset is located in a commercial zone where the building coverage ratio is 80% in principle. However, because the Asset is a certified
fireproof building in a fire prevention zone, the applied coverage ratio is 100%.

－ ２ －(Note 3) PML (Probable Maximum Loss)PML shows the probable maximum amount of loss that can be expected to incur once every 475 years or once every 50 years with 10%
probability during the anticipated period of use (i.e., 50 years as the expected lifetime of a standard building) as a ratio (percentage) of the
expected recovery cost to the replacement cost.
(Note 4) The capitalized amount at the time of merger when the property was inherited through merger is stated.
(Note 5) Book Value
Anticipated book value at the date of disposition.
(Note 6) Appraisal NOI“Appraisal NOI” is the annual NOI (operating income operating expenses) described in the real estate appraisal report with August 31, 2023
as the appraisal date.
(Note 7) Leasing Status“Total Number of Tenants” is stated as “1” because, for the purpose of subleasing, all of the rooms are leased as a block, and then thelessee under such lease agreement (the master lease agreement) sub leases each of the rooms to the end tenants.
“Total Rental Income” is the amount obtained by multiplying by 12 the monthly rent and common area charges stated in the lease agreements
by the total number of end tenants as of January 23, 2024, actually leasing space in the building of the Asset as of today (rounded down to
the nearest million yen). The figure does not include any other incidental rent that may be agreed upon in connection with the said leaseagreements, such as parking fees, signboard fees and warehouse fees.
“Security Deposits” indicates the amount of security and other deposits specified in the aforementioned lease agreements (rounded down
to the nearest million yen).
“Occupancy Rate” is calculated by dividing Total Leased Floor Space as of January 23, 2024, by Total Leasable Floor Space.
“Total Leased Floor Space” indicates the total floor space leased to end tenants as of January 23, 2024.
“Total Leasable Floor Space” is the total floor space of offices, retail facilities, logistics facilities, residential facilities, hotels, etc. within theAsset that can be leased as of January 23, 2024 (if the common area, etc. is leased, the floor space thereof is included).

4.

Summary of Transferee of the Asset to Be Disposed ofCompany Name
Nomura Real Estate Development Co., Ltd.
Head Office
1-26-2 Nishi-Shinjuku, Shinjuku-ku, Tokyo
Representative
Daisaku Matsuo, President & CEO
Principal Business
Real EstateCapital¥2,000 million (as of April 1, 2023)
Established
April 15, 1957
Net Assets¥184.8 billion (as of March 31, 2023)
Total Assets¥1,866 billion (as of March 31, 2023)
Major Shareholder
Nomura Real Estate Holdings, Inc. (100.0%)(Shareholding Ratio)
Relationships with the Fund and/or the Asset Management Company and the Seller
Nomura Real Estate Development Co., Ltd. holds 7.01% of the Fund’s investment units(as of December 1, 2023). As a wholly owned subsidiary of Nomura Real Estate
CapitalHoldings, Inc., which also holds 100% interests in the shares of the Asset Management
Company, Nomura Real Estate Development Co., Ltd. is a related party of the AssetManagement Company as defined in the Investment Trust Act.
The Asset Management Company’s employees and officers are seconded from Nomura
Personal
Real Estate Development Co., Ltd.
Nomura Real Estate Development Co., Ltd. is a property management company of theFund and a lessee of real estate properties owned by the Fund. Moreover, the AssetTransactions
Management Company has entered into an agreement on provision of information and abasic agreement on the leasing value chain with the said company.
Nomura Real Estate Development Co., Ltd. does not fall under the definition of a related
Related Party party of the Fund for the accounting purpose. However, the said company is a related party
Statusof the Asset Management Company as it is a subsidiary of a common parent company, asstated above.

－ ３ －5.

Transactions with Related Parties
The transaction concerning the Assets to be Disposed is transaction with related parties under the Investment Trust Law
as mentioned above. Accordingly, the transfer of the property, transfer price and other conditions have been duly examined
and approved by the Asset Management Company’s compliance committee and investment committee pursuant to its
investment committee rules, rules of compliance, compliance manual, rules concerning transactions with related parties,and other relevant internal rules and guidelines.

6.

Form of Payment, etc.
Regarding the disposition, on the scheduled sale date, the Fund will receive from the seller the entire purchase price of
the Property to Be Sold in a lump sum. The Fund plans to use the cash obtained through the sale of the Property for
portfolio management, including the repayment of borrowings and the acquisition of properties.

7.

8.

Schedule for the Transactions

January 26, 2024

Conclusion of a sale agreement for the disposition of NRE Ueno Building

April 1, 2024

Disposition of NRE Ueno Building

Outlook
Since this disposition will be implemented after the end of the fiscal period ending February 2024 (September 1, 2023
to February 29, 2024), there will be no impact on the operating status for the fiscal period ending February 2024. Also,
as the effect of the disposition on the operating status of the entire portfolio for the fiscal period ending August 2024
(March 1, 2024 to August 31, 2024) is immaterial, there is currently no change in the outlook for the fiscal period
ending August 2024. The Fund expects the Disposition to generate profits on sale of ¥341 million, and the entire
amount will be evenly distributed across four fiscal periods—from the fiscal period ending August 31, 2024 to thefiscal period ending February 28, 2026—based on the strategies stated in the presentation materials for the fiscal
period ended August 31, 2023 that was released on October 18, 2023.

－ ４ －9.

Appraisal Summary
Property Name
Appraisal Value
Appraiser
Appraisal Date

NRE Ueno Building¥6,900,000,000

Japan Real Estate Institute
August 31, 2023
(Yen)
Amount orPercentage

Item
Capitalization Approach PriceGrounds

6,900,000,000

Price Calculated by the Direct
Capitalization Approach(1)Operating Income (a)-b) )(a) Gross Rental Income(b) Losses due to Vacancies, etc.
(2)Operating Expenses
Maintenance Costs

6,990,000,000

Calculated by associating the price calculated by the direct capitalization
approach with the price calculated by the discounted cash flow approachCalculated by reducing stable medium-to long-term net cash
flow based on the capitalization rate

360,961,000
379,204,000
18,243,000

Calculated based on appropriate rent levels recognized as stable over themedium to long term
Calculated on the assumption of a stable occupancy rate overthe medium to long term

109,155,000
34,520,000

Utilities Costs

22,260,000

Repair Costs
7,200,000
Property Management Fees

6,933,000

Advertisement for Leasing Costs,etc.
Taxes
Insurance Premium
Other Expenses

2,301,000
34,871,000
453,000
617,000(3) Net Operating Income from
Leasing Business(NOI=(1)-(2) )(4) Profit through Management of
Temporary Deposits, etc.

Calculated with reference to the actual amounts in past fiscal years and costlevels for similar properties
Calculated with reference to the actual amounts in past fiscal years and otherfactors
Recorded with consideration of the actual amounts in past fiscal years, the costlevel of similar properties, the annual average amount of repair and renewal
costs given in the engineering report and other factors
Calculated with reference to the current compensation fee rate, compensation
fee rates adopted to similar properties and other factors
Recorded the annual average amount calculated based on assumed turnover
period of lessee
Calculated based on data related to taxes
Recorded based on the judgement that the actual amount is reasonable
Recorded road occupancy fees

251,806,000
3,196,000

Calculated based on an investment yield of 1.0%

(5) Capital Expenditure Reserve

17,510,000

Calculated based on the assumption of average allocations each period, capital
expenditure levels at similar properties, the building’s age, the annual average
repair and renewal costs given in the engineering report and other factors(6)Net Cash Flow
(NCF=(3)+(4)-(5))

237,492,000(7)Capitalization Rate

3.4%

Price Calculated by the Discounted Cash
Flow Approach
Discount Rate

6,810,000,000
3.2%

Terminal Capitalization Rate
3.5%
Cost Approach Price
Ratio of Land
Ratio of Building
Matters Noted in Reconciliation ofIndicated Value and Determinationof Appraisal Value

Calculated in comprehensive consideration of the property’s conditions oflocation, building and other conditions

Calculated with comprehensive consideration of the property’s specificcharacteristics with reference to yields on investments in similar properties
Calculated based on a comprehensive consideration of factors such as the yieldon similar property transactions, the probable future movement of the yield
on investment, risks of the property as an investment, general forecasts of theeconomic growth rate

7,850,000,000
92.5%
7.5%
The Okachimachi district in Ueno, where the property is located, has excellent accessibility to places such as
Tokyo Station, Otemachi district, and Marunouchi district. The building is old and has specifications andfacilities that are slightly poorer when compared to newer properties and such in the city center. However, it
has been appropriately renovated and its specifications and facilities meet the needs of recent tenants. The
leasable area on each floor is also of a relatively large size.
The appraisal value was determined in light of the above factors.

－ ５ －[Exhibit]
Exhibit

Overview of the Portfolio after the Disposition*Nomura Real Estate Master Fund, Inc.’s website: https://www.nre-mf.co.jp/en/－ ６ －Exhibit
Overview of the Portfolio after the Disposition(¥ million)
AreaSector

Greater Tokyo Area
(Note 1)Other Areas(Anticipated) Total

Investment Ratio

Acquisition Price(%)(by Sector)(Note 2)

Office397,115

65,100462,215

42.0

Retail109,888

67,890177,779

16.2

Logistics

220,472

3,460

223,932

20.4

Residential(Healthcare facility)

190,892

27,934

218,826

19.9

Hotels

2,360

9,450

11,810

1.1

Others

4,900―4,9000.4(Anticipated)
Total Acquisition
Price (by Area)

925,628

173,834

1,099,463

100.0

Investment Ratio (%)(Note 2)

84.2

15.8

100.0

(Note 1) “Greater Tokyo Area” refers to Tokyo Prefecture, Kanagawa Prefecture, Chiba Prefecture and Saitama Prefecture. “Other Areas” refers
to cabinet-order designated cities, prefectural capitals, and cities having a population of at least 100,000 and their peripheral areas,excluding those in Greater Tokyo Area.
(Note 2) “Investment Ratio” indicates the ratio of the (anticipated) total acquisition price of properties for each use or in each area to the(anticipated) total acquisition price of the entire portfolio. As the figures are rounded to the first decimal place, they may not add up toexactly 100%.