October 16, 2009

Financial Results for the Fiscal Period
From March 1, 2009 to August 31, 2009
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:

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:
November 26, 2009
Scheduled Commencement Date of Cash Distribution Payment: November 13, 2009

1. Business Results for the Fiscal Period from March 1, 2009 to August 31, 2009
(in millions of yen, rounded down; except as noted)(1) Operating Results
Total revenue

Operating income(%)*

Income before income
taxes

(%)*

(%)*

For the period ended
August 31, 2009

4,474

(0.7)

2,169

(3.5)

1,547

(6.6)

February 28, 2009

4,508

0.2

2,248

1.6

1,656

0.9

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

(%)*

(yen)

(%)

(%)

(%)

For the period ended
August 31, 2009

1,546

(6.6)

13,626

2.5

1.1

34.6

February 28, 2009

1,655

0.9

14,587

2.6

1.1

36.7

*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, 2009

13,626

1,546

–

–

100.0

2.5

February 28, 2009

14,587

1,655

–

–

99.9

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, 2009

146,541

62,52542.7

550,978

February 28, 2009

146,665

62,63442.7

551,939(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, 2009

2,435

(246)

(1,654)

4,533

February 28, 2009

2,576

(125)

(1,639)3,999

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2. Forecasts for the Fiscal Period from September 1, 2009 to February 28, 2010
(in millions of yen, rounded down; except as noted)

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

Total
revenue

Operatingincome(%)(%)

February 28, 2010 5,890 31.7

2,973 37.1

For the period ending

(%)

(%)

(yen)

(yen)

2,219 43.4 2,218 43.5

14,000-(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 28, 2010 is ¥14,000.

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, 2009:

113,480 units

As of February 28, 2009:

113,480 units(2) The number of treasury investment units as of the period-end:
As of August 31, 2009:- units

As of February 28, 2009:- units

Note:
Net income per unit is calculated by dividing net income by the weighted average number ofinvestment units: 113,480 units as of August 31, 2009, and 113,480 units as of February 28,
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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7th Period (August 2009) 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 7th
Period(August 2009)(1)

Forecast of the
7th Period

Result of the 6th
Period(February 2009)(2)

Comparison withthe 6th Period(1)-(2)

184

184

181

3

4,474

4,555

4,508

(33)

1,547

1,578

1,656

(109)

1,546

1,577

1,655

(109)

13,626

13,90014,587

(961)

44

44

44

0

94.4

95.0

96.2

(1.8)

Overview of Performance and Distribution
In the period under review, NAF recorded total revenue of ¥4,474 million, operating income of¥2,169 million, income before income taxes of ¥1,547 million and net income of ¥1,546 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 ¥13,626.

7th Period (August 2009) Overview of Investment
External Growth (Acquisition of properties)
No new properties were acquired during the period under review. NAF held 44 properties in its
assets at the end of the period and the total acquisition price was ¥140,000 million, unchanged
from the end of the previous period.

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
concerning all properties.
Financial Strategy (Overview of funds procurement)
During the period under review, NAF refinanced its loans taking into account market trends andinterest rate levels. As a result, total interest-bearing debt at the end of the period amounted to¥81,000 million, unchanged from the end of the previous period, with a 55.3% LTV (loan-to-value
ratio). Also, the long-term, fixed-rate loans to total interest-bearing debt ratio at the end of theperiod was 71.0% (ratio excluding long-term loans due within one year: 64.8%).
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 August 31, 2009 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: Stable)
A -1

Significant Subsequent Events
Issuance of new units
At the Board of Directors’ meeting on October 16, 2009, NAF resolved to issue new units asfollows. The issue price per unit (payment amount) shall be determined at the Board of Directors’
meeting scheduled to be held in the latter part of October 2009.
A. Issuance of new units through public offering(1) Issuance method
Public offering(2) Number of units to be issued
42,000 units
B. Issuance of new units through third party allocation (Note)(1) Issuance method
Third party allocation(2) Number of units to be issued
3,000 units(3) Allocatee
Nomura Securities Co., Ltd.
(Note) It is possible that no applications are made for a third party allocation for all or part of theissued units resulting in the reduction of the final number of units issued by third party allocation to
the minimum amount due to the forfeiture of rights, or in no issuance whatsoever.
C. Purpose for procurement of funds
Funds procured by this public offering and third party allocation shall be allocated for theacquisition of new specified assets by NAF.

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Forecasts of Investment Performance
The forecasts for the 8th period (from September 1, 2009 to February 28, 2010) and the 9th period(from March 1, 2010 to August 31, 2010) are as follows.
(in millions of yen, rounded down; except as noted)

8th period(February 2010)
5,890
2,219
2,218
14,000―Total revenue
Income before income taxes
Net income
Distribution per unit (yen)Distribution in excess of earnings per unit (yen)9th period(August 2010)
6,086
2,061
2,060
13,000―Notes: Underlying assumptions of forecasts
Investment assets:-The number of properties held by NAF as of the date of thisdocument is 44 (hereinafter, “properties acquired”).
-Of the properties acquired, a sales contract (disposal) was concluded
as follows.
(in millions of yen)Transfer
Scheduled
Name of property
price
handover date
Park Axis Ichigaya
3,100
February 24, 2010
-The difference between the transfer price of the above asset and thebook value as of August 31, 2009 is ¥543 million.
-NAF has concluded a sales contract (acquisition) whereby NAF shallacquire the following 18 properties with condition precedent that funds
for acquisition are procured.
(in millions of yen)
Acquisition
Scheduled
Name of property
price
acquisition date
Park Axis Nishigahara
840Park Axis Kinshicho
1,448Park Axis Tatsumi Stage
7,464
Park Axis Kameido
2,359Park Axis Honancho
745Park Axis Itabashi
1,448
November 5, 2009
Park Axis Oshiage
1,193Park Axis Takadanobaba
Park Axis Naka Gofukumachi
Park Axis Shirakabe
Park Axis Sendai
Park Axis Hakata Minoshima
Park Axis Takamiya Higashi

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1,222
742
1,547
2,320
960
605

Park Axis Toyosu
Park Axis Sapporo
Shokubutsuen Mae
Park Axis Hatchobori
Park Axis Itabashi Honcho
Park Axis Sumiyoshi
Total
Expenses:

14,300December 1, 2009

1,650
1,760
987
1,006
42,596

January 8, 2010

-The following expenses are projected.
(in millions of yen)
9th period

8th period
Fixed property taxes andurban planning taxes
Depreciation and amortization
Asset management fee IV
relating to the sale of Park Axis
IchigayaInterest expense and interest
expenses on investment
corporation bonds
Temporary expenses related
to the issuance of new units

165

234

1,096

1,266

31

－

683

755

80

－

Interest-bearing debt:-As of the date of this document, NAF’s balance of interest-bearing
debt is ¥81,000 million. The proceeds from the issuance of new units
decided at the Board of Directors’ meeting held on October 16, 2009,
newly procured borrowings and own funds shall be applied to thepurchase of properties to be acquired. As a result, the balance ofinterest-bearing debt at February 28, 2010 shall be ¥98,000 million.

Net income per unit
and distributions:-Net income per unit and distributions for each operating period are
calculated based on 158,480 units outstanding expected at end of
period subsequent to the complete execution of the issuance of newunits.

The forecasts are the figures calculated based on the above assumptions at the time of
preparation of this information. Therefore, actual total revenue, 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.

8

Management Policy and Issues for the 8th 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 8th 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.

9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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