O

April 17, 2013

Financial Results for the Fiscal Period
From September 1, 2012 to February 28, 2013
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/)
Executive Director:
Investment TrustManagement Company:
President and CEO:Inquiries:

Yuji Yokoyama

Mitsui Fudosan Accommodations Fund Management Co., Ltd.
Kosei Murakami
Satoshi Nohara, Director and Chief Financial Officer
Tel: +81-3-3246-3677
Scheduled Filing Date of Securities Report:
May 29, 2013
Scheduled Commencement Date of Cash Distribution Payment: May 15, 2013

1. Business Results for the Fiscal Period from September 1, 2012 to February 28,
2013(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, 2013
August 31, 2012

8,082

(0.3)

3,655

0.6

2,900

1.5

8,103

3.1

3,634

0.6

2,856

0.8

IncomeIncomebeforebeforeincomeNet income Net income/incometaxes/
per unit
net assets
taxes/
operatingtotal assets income

Net income

For the period ended
February 28, 2013
August 31, 2012

(%)*

(yen)

(%)

(%)

(%)

2,899

1.5

14,890

2.7

1.2

35.9

2,855

0.8

14,665

2.7

1.2

35.2

*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
net assets
excess of
per unit
earnings
(yen)
(%)
(%)

Total
distributions(yen)

For the period ended
February 28, 2013

14,890

2,899

–

–

100.0

2.7

August 31, 2012

14,306

2,785

–

–

97.6

2.6

Note:
For the period ended August 31, 2012, the amounts of “Total distributions” and “Net income” aredifferent because a part of retained earnings (¥70 million) was retained internally.

(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, 2013

245,982

106,204

43.2

545,447

August 31, 2012

237,854

106,09044.6

544,863

Cash flows fromoperating activities

Cash flows frominvesting activities(4) Cash Flows(in millions of yen, rounded down; except as noted)

Cash flows fromfinancing activities

Cash and cash
equivalents

For the period ended
February 28, 2013

4,368

(11,147)

5,215

4,596

August 31, 2012

5,604

(2,065)(2,331)6,159

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2. Forecasts for the Fiscal Period from March 1, 2013 to August 31, 2013
(in millions of yen, rounded down; except as noted)

Total
revenues(%)*

For the period ending

August 31, 2013

8,842

9.4

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

Operatingincome
(%)*

3,907

6.9

3,081

(%)*

(%)*

(yen)

(yen)

6.2

3,080 6.2

13,350–*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, 2013 is ¥13,350.

3. Other
1. Changes in significant accounting policies, Changes in accounting estimates and Restatement:(1) Changes due to revisions in accounting standards and others: None
(2) Changes other than in the above item (1): None
(3) Changes in accounting estimates: None
(4) Restatement: 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, 2013:

194,711 units

As of August 31, 2012:

194,711 units(2) The number of treasury investment units as of the period-end:
As of February 28, 2013:- units

As of August 31, 2012:- units

Note:
Net income per unit is calculated by dividing net income by the weighted average number ofinvestment units: 194,711 units as of February 28, 2013, and 194,711 units as of August 31,
2012.

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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14th Period (February 2013) Overview of Operating Results(in millions of yen, rounded down; except as noted)

Result of the 14th
Period(February 2013)(1)
Number ofoperating days
Total revenues
Income before
income taxes
Net income
Distribution perunit (yen)Number ofinvestment
properties
Averageoccupancy rate at
the end of period(%)

Forecast of the
14th Period

Result of the 13th
Period(August 2012)(2)

Comparison withthe 13th Period(1)-(2)

181

181

184

(3)

8,082

8,060

8,103

(21)

2,900

2,853

2,856

43

2,899

2,852

2,855

43

14,89014,65014,306

584

90

90

88

2

96.4

Approx. 95

95.8

0.6

Overview of Performance and Distribution
In the period under review, NAF recorded total revenues of ¥8,082 million, operating income of¥3,655 million, income before income taxes of ¥2,900 million and net income of ¥2,899 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 ¥14,890.

14th Period (February 2013) Overview of Investment
External Growth (Acquisition of assets)
During the period under review, NAF acquired an equity interest in an anonymous partnership in
September 2012 (acquisition price: ¥150 million), 1 property in October 2012 (acquisition price:¥1,204 million) and 1 property in December 2012 (acquisition price: ¥9,000 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 speedy management and operations by the Master PM by applying theportfolio 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 which is one of the core properties of NAF, and providing
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 borrowed ¥9,000 million as funds for the acquisition of new
properties, etc. Also, while taking into account market trends and interest rate levels, NAF
refinanced its existing loans. In addition, NAF repaid a total of ¥1,000 million of its short-term loans
with cash reserves. As a result, total interest-bearing debt at the end of the period amounted to¥134,500 million, while the long-term loans to total interest-bearing debt ratio was 90.0% (ratio
excluding long-term loans due within one year was 75.8%). Also, LTV (loan-to-value ratio) at theend of the period was 54.7%.
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 (as defined in 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, 2013 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 3 (Outlook for rating: Stable)
A A - (Trend of rating: Stable)

Long-term corporate
Short-term corporate

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

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Significant Subsequent Events
Issuance of new investment units
Concerning the issuances of new investment units that were resolved at the Board of Directors’Meetings held on February 7, 2013 and February 19, 2013, payment relating to the issuance of
new investment units by public offering was completed on March 1, 2013, and payment relating
to the issuance of new investment units by third-party allocation was completed on March 26,
2013. The details are provided below.
As a result, the total investment amount paid in was ¥125,686,793,618 and the total number ofinvestment units issued was 230,711 units.
A.

Issuance of new investment units by public offering
Number of new investment units issued
34,000 units
Issue price¥644,816 per unit
Total amount of issue price¥21,923,744,000
Amount paid in (issue value)¥623,652 per unit
Total amount paid in (issue value)¥21,204,168,000
Payment date
March 1, 2013

B.

Issuance of new investment units by third-party allocation
Number of new investment units issued
2,000 units
Amount paid in (issue value)¥623,652 per unit
Total amount paid in (issue value)¥1,247,304,000
Payment date
March 26, 2013
Allottee
Nomura Securities Co., Ltd.

(Reference information)
The following assets were acquired on March 1, 2013. The “Acquisition price” are exclusive of
miscellaneous expenses for acquisition, fixed property taxes, urban planning taxes,
consumption taxes, and local consumption taxes.
Park Cube Nihonbashi Suitengu
Acquisition price:
Appraised value:
Type of property:
Location (residence indication):
Completion date:
Structure/number of stories:
Rentable units:
Rentable area:
Seller:¥2,711 million¥2,840 million(date of value appraisal: November 30, 2012)
Trust beneficiary interest
33-4, Nihonbashi-Hakozakicho, Chuo-ku, Tokyo
May 2005
Flat-roofed reinforced concrete structure/12 stories
77
4,235.33 m2
Godo Kaisha ABF1

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Park Cube Ginza East
Acquisition price:
Appraised value:
Type of property:
Location (residence indication):
Completion date:
Structure/number of stories:
Rentable units:
Rentable area:
Seller:Park Cube Kayabacho
Acquisition price:
Appraised value:
Type of property:
Location (residence indication):
Completion date:
Structure/number of stories:
Rentable units:
Rentable area:
Seller:Park Cube Honjo Azumabashi
Acquisition price:
Appraised value:
Type of property:
Location (residence indication):
Completion date:
Structure/number of stories:
Rentable units:
Rentable area:
Seller:¥2,269 million¥2,350 million(date of value appraisal: November 30, 2012)
Trust beneficiary interest
1-3, Minato 3-chome, Chuo-ku, Tokyo
June 2005
Flat-roofed reinforced concrete and steel structure/
12 stories
77
3,358.63 m2
Godo Kaisha ABF1

¥1,105 million¥1,160 million(date of value appraisal: November 30, 2012)
Real estate
1-8, Nihonbashi-kayabacho 3-chome, Chuo-ku,
TokyoMarch 2006
Flat-roofed reinforced concrete structure/10 stories
27 residential 1 retail etc.
1,695.06 m2
Not disclosed by seller’s request¥1,252 million¥1,270 million(date of value appraisal: November 30, 2012)
Real estate
19-4, Honjo 4-chome, Sumida-ku, Tokyo
March 2006
Flat-roofed reinforced concrete structure/10 stories
45
2,241.63 m2
Not disclosed by seller’s request

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Park Axis Kiyosumi Shirakawa
Acquisition price:
Appraised value:
Type of property:
Location (residence indication):
Completion date:
Structure/number of stories:
Rentable units:
Rentable area:
Seller:Park Axis Asakusabashi Nichome
Acquisition price:
Appraised value:
Type of property:
Location (residence indication):
Completion date:
Structure/number of stories:
Rentable units:
Rentable area:
Seller:Park Axis Nishi Sugamo
Acquisition price:
Appraised value:
Type of property:
Location (residence indication):
Completion date:
Structure/number of stories:
Rentable units:
Rentable area:
Seller:¥696 million¥719 million(date of value appraisal: November 30, 2012)
Real estate
18-4, Ogibashi 1-chome, Koto-ku, Tokyo
March 2008
Flat-roofed reinforced concrete structure/8 stories
36
1,159.84 m2
Not disclosed by seller’s request¥1,079 million¥1,080 million(date of value appraisal: November 30, 2012)
Real estate
27-8, Asakusabashi 2-chome, Taito-ku, Tokyo
December 2011
Flat-roofed reinforced concrete structure/13 stories
48
1,569.00 m2
Mitsui Fudosan Co., Ltd.

¥1,439 million¥1,440 million(date of value appraisal: November 30, 2012)
Real estate
46-2, Takinogawa 7-chome, Kita-ku, Tokyo
January 2012
Flat-roofed reinforced concrete structure/13 stories
56
2,326.32 m2
Mitsui Fudosan Co., Ltd.

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Park Axis Ueno
Acquisition price:
Appraised value:
Type of property:
Location (residence indication):
Completion date:
Structure/number of stories:
Rentable units:
Rentable area:
Seller:Park Axis Akihabara East
Acquisition price:
Appraised value:
Type of property:
Location (residence indication):
Completion date:
Structure/number of stories:
Rentable units:
Rentable area:
Seller:Park Axis Yokohama Tanmachi Koen
Acquisition price:
Appraised value:
Type of property:
Location (residence indication):

Completion date:
Structure/number of stories:
Rentable units:
Rentable area:
Seller:¥1,389 million¥1,390 million(date of value appraisal: November 30, 2012)
Real estate
7-9, Kitaueno 2-chome, Taito-ku, Tokyo
January 2012
Flat-roofed reinforced concrete structure/12 stories
59
1,992.29 m2
Mitsui Fudosan Co., Ltd.

¥1,369 million¥1,370 million(date of value appraisal: November 30, 2012)
Real estate
5-9, Asakusabashi 5-chome, Taito-ku, Tokyo
May 2012
Flat-roofed reinforced concrete structure/14 stories
58
1,890.20 m2
Mitsui Fudosan Co., Ltd.

¥1,119 million¥1,120 million(date of value appraisal: November 30, 2012)
Real estate
11-4, Tanmachi 1-chome, Kanagawa-ku,
Yokohama-shi, Kanagawa (address written in theold addressing system with land given a registration
number)June 2012
Flat-roofed reinforced concrete structure/10 stories
63
1,682.46 m2
Mitsui Fudosan Co., Ltd.

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Park Axis Kayabacho
Acquisition price:
Appraised value:
Type of property:
Location (residence indication):
Completion date:
Structure/number of stories:
Rentable units:
Rentable area:
Seller:¥1,809 million¥1,810 million(date of value appraisal: November 30, 2012)
Real estate
26-6, Shinkawa 1-chome, Chuo-ku, Tokyo
June 2012
Flat-roofed reinforced concrete structure/14 stories
72
2,355.07 m2
Mitsui Fudosan Co., Ltd.

The following asset was acquired on April 1, 2013. The “Acquisition price” is exclusive of
miscellaneous expenses for acquisition, fixed property taxes, urban planning taxes,
consumption taxes, and local consumption taxes.
Park Axis Kinshicho Shinsui Koen
Acquisition price:
Appraised value (Note):
Type of property:
Location (residence indication):
Completion date:
Structure/number of stories:
Rentable units :Rentable area :Seller:¥1,369 million¥1,370 million(date of value appraisal: November 30, 2012)
Real estate
22-8, Kamezawa 4-chome, Sumida-ku, Tokyo
June 2012
Flat-roofed reinforced concrete structure/7 stories
60
2,085.62 m2
Mitsui Fudosan Co., Ltd.

(Note)
The appraised value as of February 28, 2013, which is the 14th period closing date, is ¥1,370
million (a real estate appraisal report has been obtained from Daiwa Real Estate Appraisal
Co., Ltd.).
This property is applicable to forward commitments (refers to the postdated sales contract
under which payment and handover shall be made at least one month after the conclusion of
the contract, or any other contract similar thereto) by investment corporations as provided forin the Comprehensive Guidelines for Supervision of Financial Instruments Business
Operators etc., defined by the Financial Services Agency. In the case of properties applicable
to forward commitments, if the closing date of the accounting period falls in the period
between the conclusion of the sales contract and the date of payment and handover, it isspecified in the internal rules of the asset management company to disclose the continuallyconducted appraised value as of the closing date.

10Forecasts of Investment Performance
The forecasts for the 15th period (from March 1, 2013 to August 31, 2013) and the 16th period(from September 1, 2013 to February 28, 2014) 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)15th period(August 2013)
8,842
3,081
3,080
13,350―16th period(February 2014)
8,749
3,196
3,195
13,850―Notes: Underlying assumptions of forecasts
Number of operating
days:
Investment assets:

Expenses:

Interest-bearing debt:

Number of units
issued:-From March 1, 2013 to August 31, 2013 (15th period: 184 days)-From September 1, 2013 to February 28, 2014 (16th period: 181 days)-The number of properties held by NAF as of the date of this document
is 102, in addition to 1 asset as an equity interest in an anonymous
partnership relating to real estate. In the forecasts of investment
performance, it is assumed that no subsequent transfer of properties(such as acquisition of new assets, sale of assets acquired, etc.) shalloccur until February 28, 2014.
-The occupancy rate at the end of the each period for total properties is
expected to be approximately 95%.
-The following expenses are assumed.
(in millions of yen)
15th period
16th period
Fixed property taxes and428
433
urban planning taxes
Depreciation and amortization
1,893
1,890
Interest expense and interest
expenses on investment775
749
corporation bonds
Temporary expenses related
50―
to the issuance of new units-It is assumed that NAF’s balance of interest-bearing debt that is¥133,000 million as of the date of this document shall not change until
February 28, 2014.
-We assume 230,711 units outstanding as of the date of this document.
-It is assumed that, there shall be no issuance of new units until
February 28, 2014.

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(Note)NAF revised its forecasts for the period ending August 31, 2013 (15th period: From March 1,
2013 to August 31, 2013.)
For details, please refer to “Notice Concerning Revision to Financial Results Forecasts for the
Period ending August 31, 2013 (15th period)”, released as of this date.
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 investment
assets 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.

12

Management Policy and Issues for the 15th Period Onward
NAF has always aimed to maximize its unitholder value through investments in “Accommodation
Assets” and the utilization of the Mitsui Fudosan Group as well as the formulation andmanagement of a high quality portfolio centered on “Rental Apartments” located in the 23 wardsof Tokyo.
From the 15th 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.
Combining funds procured by the issuance of new investment units of total amount ¥22,451
million conducted March 2013, following the resolution for the issuance of new investment units
made in February 2013, NAF has completed the acquisition of 11 properties in March 2013 (totalacquisition price: ¥16,237 million) and 1 property in April 2013 (acquisition price: ¥1,369 million).
In addition, as a result of the issuance of the new investment units, LTV (loan-to-value ratio) has
decreased. Looking forward, we plan to continue our efforts to further increase our external
growth.

External Growth (New acquisition of properties)
We will strive to obtain the best real estate information possible by utilizing our pipeline to the
Mitsui Fudosan Group and fortifying the asset management company’s independent information
channel . 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 otherdevelopers. Moreover, we will work to steadily acquire properties considered to possess mid- tolong-term competitive advantages through individual strategies such as enhancing our portfolio
within the 23 wards of Tokyo and other parts of the Tokyo area, mainly with single-occupant andcompact 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 consider
making investments (including obtaining first refusal rights) in “Equity Interests in Anonymous
Partnerships relating to Real Estate” or “Real Estate-Backed Securities” for such purposes as
securing opportunities for property acquisitions.
The main part of the acquisition strategy of NAF continues to be stable acquisition of “Rental
Apartments”. However, we will continue making acquisitions of “Other Accommodation Assets”,
including dormitories and corporate housings, as the investment market in “Other Accommodation
Assets”, excluding “Rental Apartments”, appears to have matured in some categories. 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 4.1% at the end of the
14th period).
We will also continue to work towards achieving high quality due diligence when acquiringproperties in order to avoid risk.

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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 range of years.
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 will continue to maintain and enhance market
competitiveness by implementing strategic renovations, primarily at Okawabata Apartment
Communities.
Further, NAF will collaborate with Mitsui Fudosan Co., Ltd., to establish brand power byconcentrating on the “Park Axis” brand, NAF’s main investment asset to penetrate the market, andfurther enhance brand recognition on the rental housing market.
Financial Strategy
NAF will continue to emphasize the continued use of long-term, fixed-rate loans by taking
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 new units by paying
attention to market trends and distribution levels, and taking into consideration the demand forfunds for the purpose of property acquisition, as well as our financial position. Additionally, NAF
will examine future issuances of investment corporation bonds in accordance with market trends,
within the range of the remaining balance of planned issuance amount for which shelf-registrationof NAF bonds has been carried out.

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.

14