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October 18, 2010

Financial Results for the Fiscal Period
From March 1, 2010 to August 31, 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:
November 26, 2010Scheduled Commencement Date of Cash Distribution Payment: November 15, 2010

1. Business Results for the Fiscal Period from March 1, 2010 to August 31, 2010
(in millions of yen, rounded down; except as noted)(1) Operating Results
Total revenues

Operating income(%)*

Income before incometaxes

(%)*

(%)*

For the period ended
August 31, 2010

6,217

5.0

2,895(3.8)

2,148(5.6)

February 28, 2010

5,918

32.3

3,010

38.8

2,276

47.1

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

(%)*

(yen)

(%)

(%)

(%)

For the period ended
August 31, 2010

2,147(5.6)

13,748

2.6

1.1

34.6

February 28, 2010

2,275

47.1

16,137

3.1

1.4

38.5

*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 ofdistributions inDistributions/
Payout ratio
earnings
excess of
net assets
per unit
earnings
(yen)
(%)
(%)

Total
distributions(yen)

For the period ended
August 31, 2010

13,7482,147––

100.02.6

February 28, 2010

14,567

2,275

––

100.0

2.7

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 perunit

(%)

(yen)

As ofAugust 31, 2010

192,478

83,24943.3

533,045

February 28, 2010

186,428

83,37744.7

533,863(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, 2010

3,663

(7,651)

3,690

3,339

February 28, 2010

6,048

(43,459)

36,5133,636

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2. Forecasts for the Fiscal Period from September 1, 2010 to February 28, 2011
(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

(%)

(%)

(0.7) 2,946

1.8(%)

(%)

(yen)

(yen)

1.1 2,171

1.113,900-

For the period ending

February 28, 2011 6,171

2,172(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, 2011 is ¥13,900.

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, 2010:

156,178 units

As of February 28, 2010:

156,178 units(2) The number of treasury investment units as of the period-end:
As of August 31, 2010:- units

As of February 28, 2010:- units

Note:
Net income per unit is calculated by dividing net income by the weighted average number ofinvestment units: 156,178 units as of August 31, 2010, and 140,976 units as of February 28,
2010.

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9th Period (August 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 9thPeriod(August 2010)(1)

Forecast of the9th Period

Result of the 8thPeriod(February 2010)(2)

Comparison withthe 8th Period(1)-(2)

184

184

181

3

6,217

6,230

5,918

298

2,148

2,132

2,276(127)

2,147

2,131

2,275(127)

13,74813,65014,567(819)

63

63

61

295.5

95.0

96.5

(1.0)

Overview of Performance and Distribution
In the period under review, NAF recorded total revenues of ¥6,217 million, operating income of¥2,895 million, income before income taxes of ¥2,148 million and net income of ¥2,147 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 ¥13,748.

9th Period (August 2010) Overview of Investment
External Growth (Acquisition of properties)
During the period under review, NAF acquired 2 properties in total, Park Cube Yotsuya Sanchomein March 2010 (acquisition price: ¥2,749 million) and Park Cube Hatchobori in June 2010(acquisition price: ¥4,200 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 individualproperties, the streamlining of management cost reduction efforts, interior renovations atOkawabata 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 newly procured short-term loans of ¥7,000 million in total
from multiple financial institutions as funds for the acquisition of new properties, etc. Afterwards,
NAF issued the “2nd Unsecured Investment Corporation Bonds” (¥7,000 million, 6 year period) inJuly 2010 to increase the long-term portion of interest-bearing debt and raise the ratio of
fixed-rate loans, and it repaid the existing short-term loans. As a result, total interest-bearing debt
at the end of the period amounted to ¥105,000 million, with a 54.6% 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
78.6% (ratio excluding long-term loans due within one year: 59.0%).
A shelf-registration statement of investment corporation bonds in public offering was filed at theKanto 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 ¥93,000
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, 2010 is as follows.
Rating agency
Moody’s Investors Service Inc.
Rating and Investment Information, Inc.
Standard and Poor’sRating subject
Issuer credit rating
Issuer credit rating
Long-term corporate
Short-term corporate

5Rating
A 2 (Outlook for rating: Negative)
A A - (Trend of rating: Stable)
A + (Outlook for rating: Negative)
A -1

Significant Subsequent Events
Not applicable.
Forecasts of Investment Performance
The forecasts for the 10th period (from September 1, 2010 to February 28, 2011) are as follows.
(in millions of yen, rounded down; except as noted)

10th period(February 2011)
6,171
2,172
2,171
13,900―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 63. In the forecasts of investment performance, it isassumed that no subsequent transfer of properties (acquisition of new
properties, sale of properties acquired, etc.) shall occur until February
28, 2011.
-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)
10th period
Fixed property taxes and233
urban planning taxes
Depreciation and amortization
1,266Interest expense and interest
expenses on investment774
corporation bonds-It is assumed that NAF’s balance of interest-bearing debt that is¥105,000 million as of the date of this document shall not fluctuate
until February 28, 2011.
-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
February 28, 2011.

The forecasts are the figures calculated based on the above assumptions at the time ofpreparation 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 properties6

in future, fluctuation in the real estate market or other changes in the environment in which NAFoperates. Accordingly, the forecasts are not a guarantee of any cash distribution amount.
Management Policy and Issues for the 10th 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 10th 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 tothe 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.

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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. 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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