April 14, 2008

Financial Results for the Fiscal Period
From September 1, 2007 to February 29, 2008
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/)
Representative Executive Director:
Asset Management Company:
Representative President and CEO:Inquiries:

Nobuyuki Nakai
Mitsui Fudosan Accommodations Fund Management Co., Ltd.
Nobuyuki Nakai
Morio Shibata, Director and Chief Financial Officer
Tel: +81-3-3246-3677
Scheduled Filing Date of Securities Report:
May 28, 2008
Scheduled Commencement Date of Cash Distribution Payment: May 15, 2008

1. Business Results for the Fiscal Period From September 1, 2007 to February 29,
2008(1) Operating Results(in millions of yen, rounded down; except as noted)
Total revenue

Operating income(%)

Income before income
taxes

(%)

(%)

For the period ended
February 29, 2008

4,092

16.1

2,103

17.2

1,631

12.7

August 31, 2007

3,524

(30.5)

1,795(33.7)

1,447(28.7)

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

(%)

(yen)

(%)

(%)

(%)

For the period ended
February 29, 2008

1,630

12.7

14,365

2.6

1.3

39.9

August 31, 2007

1,446

(28.7)

12,749

2.3

1.3

41.1

(Percent figures show changes from previous period)

1(2) Distributions(in millions of yen, rounded down; except as noted)
Distribution
per unit

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

Total
distributions(yen)

For the period ended
February 29, 2008

14,366

1,630

–

–

100.0

2.6

August 31, 2007

12,750

1,446

–

–

100.0

2.3

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
As ofFebruary 29, 2008

129,969

Net assets

62,608

Net assets/
total assets

Net assets per
unit

(%)

(yen)

48.2

551,717

August 31, 2007

114,366
62,42554.6
550,102
Note: Net assets as of February 29, 2008 and August 31, 2007 were respectively ¥62,608 millionand ¥62,425 million.

(4) Cash Flow(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

February 29, 2008

2,513

(15,962)

13,4983,486

August 31, 2007

1,861

(7,315)

4,974

3,437

For the period ended

22. Forecasts for the Fiscal Period From March 1, 2008 to August 31, 2008
(in millions of yen, rounded down; except as noted)

For the period ending

August 31, 2008

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

Total
revenue

Operatingincome(%)(%)

4,506 10.1

2,225

5.8

1,631

(%)

(%)

(yen)

(yen)

0.0

1,630 0.0

14,370-(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, 2008 is 14,370 yen.

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 29, 2008:

113,480 units

As of August 31, 2007:

113,480 units(2) The number of treasury investment units as of the period-end:
As of February 29, 2008:- units

As of August 31, 2007:- units

Note:
Net income per unit is calculated by dividing net income by the weighted average number ofinvestment units: 113,480 units as of February 29, 2008, and 113,480 units as of August 31,
2007.
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.

34th Period (February 2008) Overview of Operating Results(in millions of yen, rounded down; except as noted)

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

Result of the 4th
Period (February2008) (1)182

Forecast of the
4th Period
182

Result of the 3rd
Period (August2007) (2)184

Comparison withthe 3rd Period(1)-(2)
(2)

4,092
1,631

4,014
1,470

3,524
1,447

568
183

1,630
14,366

1,469
12,9501,446
12,750

183
1,616

37

37

30

7

97.2

95

96.9

0.3

Overview of performance and distribution
As a result of the above, NAF recorded total revenue of ¥4,092 million, operating income of¥2,103 million, income before income taxes of ¥1,631 million and net income of ¥1,630 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 ¥14,366.

4th Period (February 29, 2008) Overview of Investment
External Growth (Acquisition of properties)
During the period under review, NAF acquired 7 properties in September 2007 (total acquisition
price: ¥15,012 million). As a result, NAF held 37 properties in its assets at the end of the period
and the total acquisition price was ¥123,245 million.

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Internal Growth (Management and operation of properties held by NAF)
NAF concentrates its investment property holdings in the 23 wards of Tokyo, where the demand
for rental housing is steady and strong, and it implemented effective leasing activities inaccordance with regional characteristics and the individual features of each property collaboratingwith Mitsui Fudosan Housing Lease Co., Ltd., the master property management company (below,“Master PM.”At the Okawabata Apartment Communities, one of the principle properties, NAF completed thelarge-scale repair of the exterior walls of the River Point Tower, and begun the same work for thePark Side Wings. Also, repair work on the Pier West House, the property management building,
was also completed during the period under review and efforts are presently being made toincrease tenant services by the staff working at the property and improve competitiveness.
Further, we were able to flexibly apply the portfolio management system already under full scale
operation at the Master PM since the previous period enabling NAF to further expedite theeffectuation of its management and operation business and develop tenant recruiting activities
suited to the circumstances of individual properties.
As a result of the above leasing activities, NAF achieved a high average occupancy rate of 97.2%
in all invested properties at the end of the 4th period. NAF will work towards implementing
measures in relation to “accommodation” services corresponding to various needs, in accordancewith the results of resident questionnaires concerning all properties implemented in the current
period.
Financial Strategy (Overview of funds procurement)
NAF borrowed a total amount of ¥15,000 million from multiple financial institutions for the
September 2007 new asset purchases. It subsequently issued in November of that year NAF 1st
Unsecured Investment Corporation Bonds (¥10,000 million; 7-year term) for the repayment of its
already existing borrowings and for the transition of interest-bearing debt to long-term, fixed-rateloans. As a result, total interest-bearing debt at the end of the period under review reached¥64,500 million with a 49.6% LTV (loan-to-value ratio). Also, the long-term, fixed-rate loans to totalinterest-bearing debt ratio at the end of the period was 80.6%.
The following is an overview of the shelf-registration statement of investment corporation bonds inpublic offering filed in July 2007. The remaining balance of the planned issuance amount at theend of the period is ¥90,000 million.
Planned issuance amount
Scheduled period of issuancePurpose for funds

Up to ¥100,000 million
From July 18, 2007 to July 17, 2009
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

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Rating of NAF as of February 29, 2008 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

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

Outlook of investment performance
The forecast for the 5th period (from March 1, 2008 to August 31, 2008) is as follows.
(in millions of yen, rounded down; except as noted)

Total revenue
Income before income taxes
Net income
Distribution per unit (yen)Distribution in excess of earnings per unit (yen)

4,506
2,225
1,630
14,370―Notes: Underlying assumptions of forecasts
Investment assets:

NAF is assuming 44 properties, consisting of 37 properties held asof February 29, 2008, 6 properties acquired on March 11 or March
27 and 1 property concluded a sales contract on February 21 and tobe acquired on May 30.
Interest-bearing debt ratio: Interest-bearing debt of ¥81,300 million and interest-bearing debt
ratio of 57.1% as of August 31, 2008 is the premise of the forecast.
Interest expense is anticipated to be ¥593 million.
Interest-bearing debt ratio = Interest-bearing debt / (Interest-bearing debt + capital)
Number of units issued: A quantity of 113,480 units outstanding as of April 14, 2008
(assumption of no additional unit issuance) is assumed.
Above-mentioned forecasts are the figures calculated based on the above assumptions at thetime of preparation of this information. Therefore, actual total revenue, income before income
taxes, net income, distribution per unit and distribution in excess of earnings per unit may besubject to change due to acquisition or sale of properties in future, fluctuation in the real estatemarket 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 to be dealt with hereafter
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 5th 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)
In addition to utilizing our pipeline to the Mitsui Fudosan Group and acquiring sales information on
residential rental properties, we will strive to rapidly obtain the best real estate information
possible by fortifying our independent information channels. Our property acquisition strategy will
be to stably expand our portfolio based on the Park Axis Series to be acquired from Mitsui
Fudosan Co., Ltd. in addition to the Park Cube Series constructed by other developers. Moreover,
we will aim to realize solid property acquisitions while avoiding excessive price wars throughindividual strategies such as increasing our single-occupant, compact, residential property ratio
for which a high occupancy rate is expected, widening the geographic area of our holdings within
the 23 wards of Tokyo and carefully selecting properties for investment in the major cities ofregional areas.
We will also work towards effectuating high quality due diligence when acquiring properties inorder to avoid risk in an effort to increase the profitability of our portfolio.
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 and enhancement of the market competitivenessof Okawabata Apartment Communities by the implementation of strategic renovation.
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

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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. NAF will examine futureissuances of investment corporation bonds within the range of the remaining balance of theplanned issuance amount based on the shelf-registration statement of NAF bonds filed in July
2007. Regarding LTV (loan-to-value ratio), the upper limit is set at 60% and targeted range during
normal operations is set at approximately 40% to 50%. Additionally, NAF will examine theissuance 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.

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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