O

October 17, 2011

Financial Results for the Fiscal Period
From March 1, 2011 to August 31, 2011
Nippon Accommodations Fund Inc. (NAF) is listed on the Tokyo Stock Exchange (J-REIT) withthe securities code number 3226. (Website: http://www.naf-r.jp/english/)Representative Executive Director:
Asset Management Company:
Representative President and CEO:Inquiries:

Yuji Yokoyama
Mitsui Fudosan Accommodations Fund Management Co., Ltd.
Kosei Murakami
Morio Shibata, Director and Chief Financial Officer
Tel: +81-3-3246-3677
Scheduled Filing Date of Securities Report:
November 28, 2011
Scheduled Commencement Date of Cash Distribution Payment: November 15, 2011

1. Business Results for the Fiscal Period from March 1, 2011 to August 31, 2011
(in millions of yen, rounded down; except as noted)(1) Operating Results
Total revenues

Operating income(%)*

Income before income
taxes

(%)*

(%)*

For the period ended
August 31, 2011

7,565

22.4

3,420

16.2

2,631

19.5

February 28, 2011

6,180

(0.6)

2,944

1.7

2,200

2.5

IncomeIncomebeforebeforeNet income Net income/incomeincomeper unit
net assets
taxes/
taxes/
operatingtotal assets
incomeNet income

(%)*

(yen)

(%)

(%)

(%)

For the period ended
August 31, 2011

2,630

19.6

13,518

2.8

1.2

34.8

February 28, 2011

2,199

2.5

14,085

2.6

1.1

35.6

*Percent figures show changes from previous period1(2) Distributions(in millions of yen, rounded down; except as noted)
Distribution
per unit

Distribution in
Total
excess of
distributions inDistributions/
Payout ratio
earnings
excess of
net assets
per unit
earnings
(yen)
(%)
(%)

Total
distributions(yen)

For the period ended
August 31, 2011

13,508

2,630

–

–

100.0

2.5

February 28, 201114,086

2,199

–

–

100.0

2.6

Notes:
1. The payout ratio is rounded down to the nearest first decimal place.
2. “Distribution per unit” does not include distribution in excess of earnings per unit.

(3) Financial Position(in millions of yen, rounded down; except as noted)

Total assets

Net assets

Net assets/
total assets

Net assets per
unit

(%)

(yen)

As of
August 31, 2011

230,551

105,86545.9

543,705

February 28, 2011

192,360

83,302

43.3

533,383(4) Cash Flows(in millions of yen, rounded down; except as noted)

Cash flows fromoperating activities

Cash flows frominvesting activities

Cash flows fromfinancing activities

Cash and cash
equivalents

For the period ended
August 31, 2011

4,799

(38,879)

34,385

4,483

February 28, 2011

3,171

(185)

(2,147)4,178

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2. Forecasts for the Fiscal Period from September 1, 2011 to February 29, 2012
(in millions of yen, rounded down; except as noted)

Total
revenues

Distribution in
IncomeDistribution excess of
beforeNet income
per unit
earnings
income taxes
per unit

Operatingincome(%)(%)

3.0 3,543

3.6

(%)

(%)

(yen)

(yen)

4.4 2,745

4.4

14,100-For the period ending

February 29, 2012 7,795

2,746(Percent figures show changes from previous period)

Notes:
1. “Distribution per unit” does not include distribution in excess of earnings per unit.
2. Projected net income per unit for the fiscal period ending February 29, 2012 is ¥14,100.

3. Other
1. Changes in significant accounting policies:(1) Changes due to revisions in accounting standards and others: None
(2) Changes other than in the above item (1): None
2. Number of investment units issued(1) The number of investment units issued (including treasury investment units) as of theperiod-end:
As of August 31, 2011:

194,711 units

As of February 28, 2011:

156,178 units(2) The number of treasury investment units as of the period-end:
As of August 31, 2011:- units

As of February 28, 2011:- units

Note:
Net income per unit is calculated by dividing net income by the weighted average number ofinvestment units: 194,559 units as of August 31, 2011, and 156,178 units as of February 28,
2011.

Disclaimer:
The above forecasts are based on information currently available to NAF and on certain
assumptions deemed to be reasonable. Actual operations may differ substantially due to anumber of factors.

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11th Period (August 2011) Overview of Operating Results(in millions of yen, rounded down; except as noted)

Result of the 11th
Period(August 2011)(1)
Number ofoperating days
Total revenues
Income before
income taxes
Net income
Distribution perunit (yen)Number ofinvestment
properties
Averageoccupancy rate atend of period (%)

Forecast of the
11th Period

Result of the 10th
Period(February 2011)(2)

Comparison withthe 10th Period(1)-(2)

184

184

181

3

7,565

7,461

6,180

1,385

2,631

2,532

2,200

430

2,630

2,531

2,199

430

13,50813,00014,086

(578)

83

82

63

20

95.5

95.0

96.5

(1.0)

Overview of Performance and Distribution
In the period under review, NAF recorded total revenues of ¥7,565 million, operating income of¥3,420 million, income before income taxes of ¥2,631 million and net income of ¥2,630 million. In
addition to the above, NAF has decided to distribute nearly the entire amount of earnings inaccordance with the Distribution Policy (Article 34 of the Articles of Incorporation) set forth by NAF.
The distribution per unit was ¥13,508.

11th Period (August 2011) Overview of Investment
External Growth (Acquisition of properties)
During the period under review, NAF acquired 20 new properties in total consisting of 18
properties in March 2011 (total acquisition price: ¥22,781 million), 1 property in April 2011(acquisition price: ¥7,905 million), and 1 property in August 2011 (acquisition price: ¥6,060
million). Also, in June 2011, NAF acquired additional unit ownership interest in an existing
property (acquisition price: ¥155 million).

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Internal Growth (Management and operation of properties held by NAF)
Mitsui Fudosan Housing Lease Co., Ltd., the master property management company (below,“Master PM”), and the asset management company collaborate in the management of properties
held by NAF with the aim of implementing effective management and operation activities inaccordance with regional characteristics and the individual features of each property. These
include efforts such as rapid management and operations by the Master PM applying the portfolio
management system, tenant recruiting activities suited to the circumstances of individual
properties, the streamlining of management cost reduction efforts, interior renovations at
Okawabata Apartment Communities, one of the principle properties of NAF, and provide tenant
services corresponding to various needs in accordance with the results of resident questionnaires.
Financial Strategy (Overview of funds procurement)
During the period under review, NAF issued investment units with a total amount of ¥22,132
million and borrowed a total amount of ¥14,500 million from multiple financial institutions as funds
for the acquisition of new properties, etc. Also, while taking into account market trends and interest
rate levels, NAF raised the long-term loans to total interest-bearing debt ratio and refinanced its
existing loans. As a result, total interest-bearing debt at the end of the period amounted to¥119,500 million, while the long-term loans to total interest-bearing debt ratio was 90.4% (ratio
excluding long-term loans due within one year: 81.6%). Also, LTV (loan-to-value ratio) at the endof the period was 51.8%.
A shelf-registration statement of investment corporation bonds in public offering was filed at the
Kanto Local Finance Bureau in July 2011. An overview of the shelf-registration statement is given
below. The remaining balance of the planned issuance amount at the end of the period is¥100,000 million.
Planned issuance amount
Scheduled period of issuancePurpose for funds

Up to ¥100,000 million
From July 18, 2011 to July 17, 2013
Acquisition of new specified assets (same meaning as definedin Article 2, Paragraph 1 of the Investment Trust and Investment
Corporation Act of Japan), repayment of borrowings, repaymentof tenant security deposit, payments for maintenance andrenovation, and operational use

Rating of NAF as of August 31, 2011 is as follows.
Rating agency
Moody’s Japan K.K. (Moody’s)
Rating and Investment Information, Inc.
(R&I)
Standard & Poor’s Ratings Japan K.K.
(S&P)

Rating subject
Issuer credit rating
Issuer credit rating

RatingA 2 (Outlook for rating: Negative)
A A - (Trend of rating: Stable)

Long-term corporate
Short-term corporate

A + (Outlook for rating: Negative)
A -1

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Significant Subsequent Events
Not applicable.
(Reference information)
The following assets were acquired on September 30, 2011. The figures listed below under“Acquisition price” are exclusive of miscellaneous expenses for acquisition, fixed property taxes,
urban planning taxes, consumption taxes, and local consumption taxes.
Park Cube Kita Matsudo
Acquisition price:
Appraised value:
Type of property:
Location (registration number):Completion date:
Structure/number of stories:
Rentable units:
Rentable area:
Seller:Park Cube Sasazuka
Acquisition price:
Appraised value:
Type of property:
Location (residence indication):
Completion date:
Structure/number of stories:

Rentable units:
Rentable area:
Seller:¥1,200 million¥1,220 million(date of value appraisal: August 31, 2011)
Real estate904-3, Kami-Hongo Aza Santo Maki,
Matsudo-shi, Chiba(district where residence indication has notbeen implemented yet)February 2009
Flat-roofed reinforced concrete structure/
14 stories
108 residential 1 retail etc.
2,358.66 m²
ITOCHU Property Development, Ltd.

¥2,200 million¥2,440 million(date of value appraisal: August 31, 2011)
Real estate
4-3, Sasazuka 2-chome, Shibuya-ku,
Tokyo
August 2009
Flat-roofed reinforced concrete structure/
15 stories above ground and 1 undergroundstory
92 residential 1 retail etc.
2,416.00 m²
ITOCHU Property Development, Ltd.

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Park Cube Musashi Kosugi
Acquisition price:
Appraised value:
Type of property:
Location (registration number):Completion date:
Structure/number of stories:
Rentable units:
Rentable area:
Seller:¥2,250 million¥2,300 million(date of value appraisal: August 31, 2011)
Real estate trust
890-6, Shin-maruko-higashi 2-chome,
Nakahara-ku, Kawasaki-shi, Kanagawa(district where residence indication has notbeen implemented yet)
September 2009
Flat-roofed reinforced concrete structure/
14 stories
136 residential
3,057.36 m²
ITOCHU Property Development, Ltd.

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Forecasts of Investment Performance
The forecasts for the 12th period (from September 1, 2011 to February 29, 2012) are as follows.
(in millions of yen, rounded down; except as noted)

Total revenues
Income before income taxes
Net income
Distribution per unit (yen)Distribution in excess of earnings per unit (yen)12th period(February 2012)
7,795
2,746
2,745
14,100―Notes: Underlying assumptions of forecasts
Investment assets:

Expenses:

Interest-bearing debt:

Number of units
issued:-The number of properties held by NAF as of the date of this document
is 86. In the forecasts of investment performance, it is assumed that no
subsequent transfer of properties (acquisition of new properties, sale ofproperties acquired, etc.) shall occur until February 29, 2012.
-The occupancy rate at the end of the 12th period for total properties is
expected to be approx. 95 %.
-The following expenses are projected.
(in millions of yen)
12th period
Fixed property taxes and275
urban planning taxes
Depreciation and amortization
1,699Interest expense and interest
expenses on investment796
corporation bonds-It is assumed that NAF’s balance of interest-bearing debt that is¥125,000 million as of the date of this document shall not fluctuate until
February 29, 2012.
-We assume 194,711 units outstanding as of the date of this document.
-It is assumed that, there shall be no issuance of new units until
February 29, 2012.

The forecasts are the figures calculated based on the above assumptions at the time of
preparation of this information. Therefore, actual total revenues, income before income taxes, net
income and distribution per unit may be subject to change due to acquisition or sale of properties
in future, fluctuation in the real estate market or other changes in the environment in which NAF
operates. Accordingly, the forecasts are not a guarantee of any cash distribution amount.

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Management Policy and Issues for the 12th Period Onward
NAF has always aimed to maximize its unitholder value through investments in accommodation
properties and the utilization of the Mitsui Fudosan Group as well as the formulation andmanagement of a high quality portfolio centered on rental residential properties located in the 23
wards of Tokyo.
From the 12th period onward, we aim to manage our portfolio stably based on theabove-mentioned policies and further increase our unitholder value by achieving internal andexternal growth expectations.
External Growth (New acquisition of properties)
We will strive to rapidly obtain the best real estate information possible by utilizing our pipeline to
the Mitsui Fudosan Group and fortifying our independent information channel consisting of theasset management company. Our basic strategy will be to stably expand our portfolio based on
the Park Axis Series developed by Mitsui Fudosan Co., Ltd. in addition to the Park Cube Series
constructed by other developers. Moreover, we will aim to realize solid acquisitions of properties
considered to possess our mid- to long-term competitive advantages through individual strategies
such as widening the geographic area of our holdings within the 23 wards of Tokyo mainly of
single-occupant and compact residential properties for which a high occupancy rate is expected
and carefully selecting properties for investment in the major cities of regional areas.
The main part of the acquisition strategy of NAF continues to be stable acquisition of “Rental
Apartments”. However, it will continue to consider making acquisitions of “Other Accommodation
Assets”, including dormitories and corporate housing, as the investment market in “Other
Accommodation Assets”, excluding “Rental Apartments”, appears to have matured in somecategories. In the management of its portfolio, NAF has set the upper limit of the share of “Other
Accommodation Assets” in the overall portfolio to around 10% (on the basis of acquisition price)for the time being (the share of “Other Accommodation Assets” in the overall portfolio was 3.6% at
the end of the 11th period).
We will also continue to work towards effectuating high quality due diligence when acquiringproperties in order to avoid risk.
Internal Growth (Management and operation of leasehold properties)
NAF will aim to improve its rent levels and occupancy rate through the formulation andimplementation of a leasing strategy that takes into account the characteristics of each individual
property with the objective of maximizing rent revenues over the mid- to long-term. NAF will
review the adequacy of the grade of property management and cost of management andoperation as to each invested property in an appropriate timeframe and manner and reduce costby the rational review of management cost by utilizing the merits of outsourcing all property
management tasks to the Master PM. NAF is continuously aiming for the maintenance andenhancement of the market competitiveness of Okawabata Apartment Communities byimplementing strategic renovation of principally private-use areas.

9Further, with the help of Mitsui Fudosan Co., Ltd., NAF will work to establish brand power byconcentrating on the market penetration of the “Park Axis” brand, NAF’s main invested asset, andthe further enhancement of name recognition on the rental housing market.
Financial Strategy
NAF will continue to emphasize the continued use of long-term, fixed-rate loans taking into
account measures to counter future interest rate and refinancing risks. Regarding LTV(loan-to-value ratio), the upper limit is set at around 60%. NAF will examine the issuance of newunits paying attention to market trends and distribution levels and taking into consideration the
demand for funds for the purpose of property acquisition as well as our financial position.
Additionally, NAF will examine future issuances of investment corporation bonds within the rangeof the remaining balance of the planned issuance amount based on the shelf-registration
statement of NAF bonds filed in July 2011.

Disclaimer:This financial report has been prepared in accordance with Japanese accounting standards andJapanese laws. Figures have been rounded down to eliminate amounts of less than one million
yen.
Please note that this English translation of the Japanese original document is provided solely for
informational purposes. In the event of any discrepancy between the Japanese original and thisEnglish translation, the Japanese original shall prevail.

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