O

April 16, 2010

Financial Results for the Fiscal Period
From September 1, 2009 to February 28, 2010
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:
May 27, 2010
Scheduled Commencement Date of Cash Distribution Payment: May 17, 2010

1. Business Results for the Fiscal Period from September 1, 2009 to February 28,
2010(1) Operating Results(in millions of yen, rounded down; except as noted)
Total revenues

Operating income(%)*

Income before income
taxes

(%)*

(%)*

For the period ended
February 28, 2010

5,918

32.3

3,010

38.8

2,276

47.1

August 31, 2009

4,474

(0.7)

2,169

(3.5)

1,547

(6.6)

IncomebeforeIncomebeforeincomeNet income Net income/incomeper unit
net assets
taxes/
taxes/
total assets operating
incomeNet income

(%)*

(yen)

(%)

(%)

(%)

For the period ended
February 28, 2010

2,275

47.1

16,137

3.1

1.4

38.5

August 31, 2009

1,546

(6.6)

13,626

2.5

1.1

34.6

*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
February 28, 2010

14,567

2,275

–

–

100.0

2.7

August 31, 2009

13,626

1,546

–

–

100.0

2.5

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
February 28, 2010

186,428

83,37744.7

533,863

August 31, 2009

146,541

62,52542.7

550,978(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
February 28, 2010

6,048

(43,459)

36,513

3,636

August 31, 2009

2,435

(246)

(1,654)4,533

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2. Forecasts for the Fiscal Period from March 1, 2010 to August 31, 2010
(in millions of yen, rounded down; except as noted)

Total
revenues

For the period ending

August 31, 2010

6,160

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

Operatingincome

(%)

(%)

(%)

(%)

(yen)

(yen)

4.1 2,882(4.2) 2,093(8.0) 2,092 (8.0)

13,400-(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 August 31, 2010 is ¥13,400.

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 February 28, 2010:

156,178 units

As of August 31, 2009:

113,480 units(2) The number of treasury investment units as of the period-end:
As of February 28, 2010:- units

As of August 31, 2009:- units

Note:
Net income per unit is calculated by dividing net income by the weighted average number ofinvestment units: 140,976 units as of February 28, 2010, and 113,480 units as of August 31,
2009.
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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8th Period (February 2010) Overview of Operating Results(in millions of yen, rounded down; except as noted)

Number ofoperating days
Total revenues
Income before
income taxes
Net income
Distribution perunit (yen)Number ofinvestment
properties
Averageoccupancy rate atend of period (%)

Result of the 8th
Period(February 2010)(1)

Forecast of the
8th Period

Result of the 7th
Period(August 2009)(2)

Comparison withthe 7th Period(1)-(2)

181

181

184

(3)

5,918

5,890

4,474

1,444

2,276

2,219

1,547

728

2,275

2,218

1,546

728

14,567

14,00013,626

941

61

61

44

17

96.5

95.0

94.4

2.1

Overview of Performance and Distribution
In the period under review, NAF recorded total revenues of ¥5,918 million, operating income of¥3,010 million, income before income taxes of ¥2,276 million and net income of ¥2,275 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 ¥14,567.

8th Period (February 2010) Overview of Investment
Acquisition and sale of properties
During the period under review, NAF acquired 18 properties in total consisting of 13 properties
acquired in November 2009 (total acquisition price: ¥22,893 million), 2 properties in December
2009 (total acquisition price: ¥15,950 million) and 3 properties in January 2010 (total acquisition
price: ¥3,753 million). Further, NAF sold Park Axis Ichigaya in February 2010 (acquisition price inNovember 2005: ¥2,570 million, sale price: ¥3,100 million) in response to the proposal of thebuyer and generally taking into consideration its influence causing on the entire portfolio.

4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 ¥20,100
million and borrowed a total amount of ¥18,000 million from multiple financial institutions as funds
for the acquisition of new properties, etc. As a result, total interest-bearing debt at the end of theperiod amounted to ¥99,000 million, with a 53.1% LTV (loan-to-value ratio). Also, the long-term,
fixed-rate loans to total interest-bearing debt ratio at the end of the period was 74.2% (ratio
excluding long-term loans due within one year: 62.1%).
A shelf-registration statement of investment corporation bonds in public offering was filed at the
Kanto Local Finance Bureau in July 2009. 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, 2009 to July 17, 2011
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 February 28, 2010 is as follows.
Rating agency
Moody’s Investors Service Inc.
Rating and Investment Information, Inc.
Standard and Poor’s

Rating subject
Issuer credit rating
Issuer credit rating
Long-term corporate
Short-term corporate

5

RatingA 2 (Outlook for rating: Negative)
A A - (Trend of rating: Stable)
A + (Outlook for rating: Negative)
A -1

Significant Subsequent Events
Not applicable.
(Reference information)
The following property was acquired on March 30, 2010. The acquisition price shown
below is exclusive of miscellaneous expenses for acquisition, fixed property taxes,
urban planning taxes, consumption taxes and local consumption taxes.
Park Cube Yotsuya Sanchome(a) Acquisition price:(b) Appraised value:(c) Location:(d) Completion date:(e) Structure/number of stories:(f) Rentable units:(g) Rentable area:(h) Seller:¥2,749 million¥2,970 million(date of value appraisal: February 28, 2010)
22-2, Araki-cho, Shinjuku-ku, Tokyo and otherFebruary 2009
Flat-roofed reinforced concrete structure/10
stories above ground and 1 underground story
130
2
3,599.82m
Godo Kaisha TN Second6Forecasts of Investment Performance
The forecasts for the 9th period (from March 1, 2010 to August 31, 2010) are as follows.
(in millions of yen, rounded down; except as noted)

9th period(August 2010)
6,160
2,093
2,092
13,400―Total revenues
Income before income taxes
Net income
Distribution per unit (yen)Distribution in excess of earnings per unit (yen)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 thisdocument is 62 consisting of 61 properties held as of February 28,
2010 and “Park Cube Yotsuya Sanchome” acquired on March 30,
2010. It is assumed that no subsequent transfer of properties(acquisition of new properties, sale of properties acquired, etc.) shalloccur until August 31, 2010.
-The occupancy rate at the end of the period for total properties is
expected to be approx. 95 %.
-The following expenses are projected.
(in millions of yen)
9th period
Fixed property taxes and234
urban planning taxes
Depreciation and amortization
1,233
Interest expense and interest
expenses on investment789
corporation bonds-It is assumed that NAF’s balance of interest-bearing debt that is¥102,000 million as of the date of this document shall not fluctuate
until August 31, 2010.
-We assume 156,178 units outstanding as of the date of thisdocument.
-It is assumed that, there shall be no issuance of new units until
August 31, 2010.

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 9th 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 9th 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.
We will also work towards effectuating high quality due diligence when acquiring properties inorder 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.
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.

8

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 60%. NAF will examine the issuance of new units
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 range of the remainingbalance of the planned issuance amount based on the shelf-registration statement of NAF bonds
filed in July 2009.

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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