December 1, 2020
To All Concerned Parties
Issuer of Real Estate Investment Trust Securities:
Nippon Accommodations Fund Inc.
Takashi Ikeda, Executive Director(TSE Code: 3226)
Investment Trust Management Company:
Mitsui Fudosan Accommodations
Fund Management Co., Ltd.
Tateyuki Ikura, President and CEO
Inquiries: Tetsuji Kawakami, CFO and Director(TEL: +81-3-3246-3677)

Notification Concerning Issuance of New Investment Units andSecondary Offering of Investment Units
Nippon Accommodations Fund Inc. (“NAF”) hereby provides notice of its resolution regarding issuance of newinvestment units and secondary offering of investment units adopted at the Board of Directors’ meeting held on
December 1, 2020, as follows.
1. Issuance of new investment units by public offering(1)

Number of units to be offered

18,000 units(2)

Amount to be paid in

Undetermined. The amount to be paid in shall be determined at the(issue value)

Board of Directors’ meeting to be held on any date between
December 9, 2020 (Wed) and December 15, 2020 (Tue) (“Issue
Price Determination Date”).

(3)

Method of offering

The method of offering shall be by public offering where allinvestment units are to be subscribed and purchased by anunderwriting syndicate whose joint lead managers are Nomura
Securities Co., Ltd. and Daiwa Securities Co. Ltd. (“JointBookrunners”) as well as SMBC Nikko Securities Inc. (hereinafterreferred to collectively with Joint Bookrunners as “Joint LeadManagers”). Underwriters other than Joint Lead Managers areMizuho Securities Co., Ltd. and Mitsubishi UFJ Morgan Stanley
Securities Co., Ltd. (hereinafter referred to collectively with Joint
Lead Managers as “Underwriters”).
The issue price (offer price) for the public offering shall be
determined in consideration of the degree of demand and otherconditions based on a tentative price obtained by multiplying closing
price at the Tokyo Stock Exchange on the Issue Price Determination
Date (if no closing price is available for that date, the nearest
preceding closing price will be used) by a number between 0.90 to
1.00 (any fractions less than one yen shall be omitted).

<Caution> This document is a press release intended for general publication regarding NAF’s issuance of new investment units andsecondary offering of investment units and is not for purposes of soliciting investment. When investing, we ask that investors exercise
their own judgment taking full responsibility after having read carefully the new investment unit issuance and secondary offering
prospectus, or any corrections thereof (if made), prepared by NAF.

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(4)

Details of underwriting

The Underwriters shall pay in the amount equivalent to the total

contract

amount to be paid in (issue value) to NAF on the payment date statedin (7) below. The difference between such amount and the total issue
price (offer price) for the public offering shall be retained by theUnderwriters. NAF shall pay no underwriting commission to theUnderwriters.

(5)

Subscription unit

One investment unit or more in whole units(6)

Subscription period

Two business days starting the business day immediately following(7)

Payment date

Any date between December 15, 2020 (Tue) and December 21,

the Issue Price Determination Date
2020 (Mon). However, the date shall be four business days after theIssue Price Determination Date.
(8)

The amount to be paid in (issue value) and any other matters necessary for this issuance of new
investment units shall be determined at a future Board of Directors’ meeting.

(9)

The above items shall be subject to the effectiveness of registration under the Financial Instruments
and Exchange Act.

2. Secondary offering of investment units by overallotment (see “Reference” item 1. below)(1)

Offerer

Nomura Securities Co., Ltd.

(2)

Number of units to be offered

950 units
This number is the maximum number of investment units to beoffered. The number may decrease, or the secondary offering by
overallotment itself may be cancelled, depending on the degree ofdemand and other conditions. The number of investment units to beoffered shall be determined at the Board of Directors’ meeting to beheld on the Issue Price Determination Date, in consideration of thedegree of demand and other conditions.

(3)

Offer price

Undetermined. The offer price shall be determined on the Issue Price
Determination Date; provided, however, that such offer price shall be
the same as the issue price (offer price) for the public offering.

(4)

Method of offering

Nomura Securities Co., Ltd. will make an offering of the maximum of950 investment units of NAF that it borrows from the certaininvestor(s) of NAF in consideration of the degree of demand andother conditions in the public offering.

(5)

Subscription unit

One investment unit or more in whole units(6)

Subscription period

Same as the subscription period in the public offering(7)

Delivery date

The business day immediately following the payment date in thepublic offering(8)

The offer price and any other matters necessary for this offering of investment units shall bedetermined at a future Board of Directors’ meeting.

(9)

The above items shall be subject to the effectiveness of registration under the Financial Instrumentsand Exchange Act.

<Caution> This document is a press release intended for general publication regarding NAF’s issuance of new investment units andsecondary offering of investment units and is not for purposes of soliciting investment. When investing, we ask that investors exercise
their own judgment taking full responsibility after having read carefully the new investment unit issuance and secondary offering
prospectus, or any corrections thereof (if made), prepared by NAF.

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3. Issuance of new investment units by third-party allocation (see “Reference” item 1. below)(1)

Number of units to be offered

950 units(2)

Amount to be paid in

Undetermined. The amount to be paid in (issue value) shall be the(issue value)same as the amount to be paid in (issue value) for the public offering.

(3)

Allottee

Nomura Securities Co., Ltd.

(4)

Subscription unit

One investment unit or more in whole units

Subscription period

Any date between January 12, 2021 (Tue) and January 18, 2021

(subscription date)(Mon). However, the date shall be the business day immediately(5)

following the 30th day from the day immediately following the last
day of the subscription period of the public offering and secondaryoffering by overallotment.
(6)

Payment date

Any date between January 13, 2021 (Wed) and January 19, 2021
(Tue). However, the date shall be two business days after the 30th
day from the day immediately following the last day of thesubscription period of the public offering and secondary offering byoverallotment.

(7)

Investment units not subscribed within the subscription period (subscription date) stated in (5) above
shall not be issued.

(8)

The amount to be paid in (issue value) and any other matters necessary for this issuance of newinvestment units shall be determined at a future Board of Directors’ meeting.

(9)

The above items shall be subject to the effectiveness of registration under the Financial Instruments
and Exchange Act.

<Caution> This document is a press release intended for general publication regarding NAF’s issuance of new investment units andsecondary offering of investment units and is not for purposes of soliciting investment. When investing, we ask that investors exercise
their own judgment taking full responsibility after having read carefully the new investment unit issuance and secondary offering
prospectus, or any corrections thereof (if made), prepared by NAF.

3

<Reference>
1. Secondary offering by overallotment, etc.
(1)

The secondary offering by overallotment stated in “2. Secondary offering of investment units byoverallotment” above is a secondary offering of overallotted units to be made in conjunction with the public
offering in “1. Issuance of new investment units by public offering” above in an amount not to exceed 950
investment units of NAF, that will be borrowed by Nomura Securities Co., Ltd. from the certain investor(s) ofNAF in consideration of the degree of demand and other conditions in the public offering. Although 950
investment units is planned to be offered by overallotment, this is the maximum number of investment units
to be offered and, depending on the degree of demand and other conditions, such number may decrease, orthe secondary offering by overallotment itself may be cancelled.
In connection with the secondary offering by overallotment, the Board of Directors of NAF has resolved,
at the meeting held on December 1, 2020 (Tue), that NAF will issue by third-party allocation 950 investment
units of NAF necessary to return the units borrowed from the certain investor(s) of NAF by Nomura Securities
Co., Ltd. (“Borrowed Investment Units”), where the payment date is a date from January 13, 2021 (Wed), toJanuary 19, 2021 (Tue) (However, the date shall be two business days after the 30th day from the day
immediately following the last day of the subscription period of the public offering and secondary offering byoverallotment.), and the allottee is Nomura Securities Co., Ltd. (“Third-Party Allocation”).
Furthermore, Nomura Securities Co., Ltd. may also purchase investment units of NAF on the Tokyo Stock
Exchange up to the number of investment units to be offered by overallotment (“Syndicate CoverTransactions”) to return the Borrowed Investment Units. Such Syndicate Cover Transactions would be madeduring the period beginning on the date immediately following the last day of the subscription period of thepublic offering and secondary offering by overallotment and ending on the date four business days prior tothe payment date of Third-Party Allocation (the “Syndicate Cover Transaction Period”). All investment unitsof NAF purchased through Syndicate Cover Transactions shall be used to return the Borrowed Investment
Units. During the Syndicate Cover Transaction Period, Nomura Securities Co., Ltd. at its discretion may notconduct any Syndicate Cover Transactions or may terminate any Syndicate Cover Transactions before thenumber of investment units purchased reaches the number of investment units of the secondary offering byoverallotment.
In addition, Nomura Securities Co., Ltd. may conduct stabilizing operations as it conducts the public
offering and the secondary offering by overallotment. The investment units of NAF purchased through suchstabilizing operations may be used, in whole or in part, to return the Borrowed Investment Units.
Nomura Securities Co., Ltd. plans to underwrite the allocation under this issuance of new investment
units by Third-Party Allocation of a number of investment units of NAF obtained by deducting (a) the numberof investment units purchased through stabilizing operations and Syndicate Cover Transactions that are to
be used to return the Borrowed Investment Units, from (b) the number of investment units to be offered by
the overallotment. Accordingly, all or a part of the investment units to be issued under this issuance by ThirdParty Allocation may not be subscribed for, which may result in a decrease in the maximum number ofinvestment units planned to be issued under this issuance by Third-Party Allocation, or in the cancellation of
the entire issuance due to forfeiture.
(2)

The transaction stated in (1) above shall be made by Nomura Securities Co., Ltd. in consultation with

Daiwa Securities Co. Ltd.

<Caution> This document is a press release intended for general publication regarding NAF’s issuance of new investment units andsecondary offering of investment units and is not for purposes of soliciting investment. When investing, we ask that investors exercise
their own judgment taking full responsibility after having read carefully the new investment unit issuance and secondary offering
prospectus, or any corrections thereof (if made), prepared by NAF.

4

2. Change in total number of issued investment units by this issuanceTotal number of issued investment units at present
Increase in number of investment units by public offering
Total number of issued investment units after public offering
Increase in number of investment units by Third-Party Allocation
Total number of issued investment units after Third-Party Allocation

484,522 units
18,000 units
502,522 units
950 units503,472 units(Note)(Note)(Note) Number of units in the event Nomura Securities Co., Ltd. subscribes all investment units offered by Third-Party Allocation, andsaid units are issued.

3. Purpose and reason for issuance
The issuance of new investment units was decided as a result of an examination of the current LTV (Loan toValue Ratio), market trends and cash distributions in an effort to promote external growth through the purchaseof new specified properties.
4. Total amount to be procured, specific use of funds and scheduled outlay period(1) Total amount to be procured (approximate net balance)¥10,435,973,450 (maximum)(Note) Sum of ¥9,912,798,000 in net proceeds from the public offering and the ¥523,175,450 maximum net proceeds from theissuance of new investment units by third-party allocation. The above amount is a prospective amount calculated basedon the closing price at the Tokyo Stock Exchange for November 16, 2020 (Mon).

(2) Specific use of procured funds and scheduled outlay periodThe procured funds shall be allocated for the acquisition of specified properties to be purchased by NAF(as mentioned in “Notification Concerning Acquisition of Domestic Real Estate Properties (Park CubeOimachi Residence and other 3 properties)” released on today). Remaining balance shall be kept as funds
on hand and used for future acquisitions of specified properties or repayments of borrowings.
5. Designated purchaser
Not applicable.
6. Future prospects
As mentioned in “Notification Concerning Revision to Financial Results Forecasts for the Periods EndingFebruary 28, 2021 and August 31, 2021” released on today.

<Caution> This document is a press release intended for general publication regarding NAF’s issuance of new investment units andsecondary offering of investment units and is not for purposes of soliciting investment. When investing, we ask that investors exercise
their own judgment taking full responsibility after having read carefully the new investment unit issuance and secondary offering
prospectus, or any corrections thereof (if made), prepared by NAF.

5

7. Management conditions during the three most recent fiscal periods and status of equity finance(1) Management conditions during the three most recent fiscal periods
27th period

28th period

29th period

March 1, 2019

September 1, 2019

March 1, 2020

to August 31, 2019

to February 29, 2020

to August 31, 2020

Net income per unit (Note)¥11,606¥10,041¥10,108

Distribution per unit

¥10,449¥10,042¥10,108

Actual payout ratio

90.0%

100.0%

100.0%Net assets per unit

¥291,790¥291,382¥291,448(Note) Net income per unit is calculated by dividing net income by the average number of investment units during the period.

(2) Conditions of the most recent investment unit priceA. Conditions during the three most recent fiscal periods
27th period

28th period

29th period

March 1, 2019

September 1, 2019

March 1, 2020

to August 31, 2019

to February 29, 2020

to August 31, 2020

Opening price¥555,000¥664,000¥651,000

Highest price¥685,000¥734,000¥692,000

Lowest price¥544,000¥642,000¥442,000

Closing price¥667,000¥661,000¥653,000

B. Conditions during the most recent six-month period
2020
June
July
AugustSeptember

OctoberNovemberOpening price¥652,000¥628,000¥681,000¥653,000¥613,000¥598,000Highest price¥672,000¥692,000¥686,000¥663,000¥614,000¥616,000

Lowest price¥615,000¥628,000¥634,000¥593,000¥562,000¥572,000

Closing price¥624,000¥681,000¥653,000¥607,000¥598,000¥577,000<Caution> This document is a press release intended for general publication regarding NAF’s issuance of new investment units andsecondary offering of investment units and is not for purposes of soliciting investment. When investing, we ask that investors exercise
their own judgment taking full responsibility after having read carefully the new investment unit issuance and secondary offering
prospectus, or any corrections thereof (if made), prepared by NAF.

6C. Investment unit prices on the business day immediately prior to the resolution date of the issuance
November 30, 2020
Opening price¥581,000

Highest price¥583,000

Lowest price¥572,000

Closing price¥577,000(3) Status of equity finance during the three most recent fiscal periods
Not applicable.
8. Others (Restrictions on sale and additional issuance, etc.)(1)Regarding 15,600 of the investment units of NAF held as of December 1, 2020, by Mitsui Fudosan

Residential Co., Ltd., which is an investing party that has held investment units of NAF since before the publicoffering, Mitsui Fudosan Residential Co., Ltd. has agreed with the Joint Lead Managers that it shall noteffectuate any sale, etc. of the investment units of NAF it holds in connection with the public offering during
the period from the Issue Price Determination Date to the date six months after the delivery date of the public
offering, without the prior written consent of the Joint Lead Managers (however, excluding where investment
units of NAF are lent to Nomura Securities Co., Ltd. for the purpose of secondary offering by overallotment).
The Joint Lead Managers have the right at their discretion to dissolve the said agreement in whole or inpart during the period above.
(2)

NAF has agreed with the Joint Lead Managers that it will not effectuate any issuance, etc. of investment

units of NAF in connection with the public offering during the period from the Issue Price Determination Dateto the date three months after the delivery date of the public offering without the prior written consent of theJoint Lead Managers (however, excluding where new investment units are issued by Third-Party Allocation
or by investment unit split).
The Joint Lead Managers have the right at their discretion to dissolve the said agreement in whole or inpart during the period above.

NAF’s website: https://www.naf-r.jp/english/<Caution> This document is a press release intended for general publication regarding NAF’s issuance of new investment units andsecondary offering of investment units and is not for purposes of soliciting investment. When investing, we ask that investors exercise
their own judgment taking full responsibility after having read carefully the new investment unit issuance and secondary offering
prospectus, or any corrections thereof (if made), prepared by NAF.

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