NOMURA REAL ESTATE MASTER FUND, INC.

TSE code :3462

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Message from the Management

Since its launch in October 2015, NMF has been making steady progress toward becoming the premiere J-REIT by implementing its Medium- to Long-term Management Strategy, a concrete roadmap for achieving NMF’s basic strategies of securing stable income over the medium to long term and ensuring the steady growth of assets under management.

In the 5th fiscal period, ended February 28, 2018, NMF executed a transaction with the sponsor in which it acquired PMO Shin-Nihonbashi, PMO Hirakawacho, GEMS Daimon and GEMS Kanda, and sold Morisia Tsudanuma. With this, we largely completed the sale of properties subject to strategic property replacements (SPRs). Including this transaction, we have carried out property sales totaling ¥99.5 billion, roughly double our initial target for the Quality phase of \50 billion in asset replacements. NMF has also acquired 42 properties, mainly from the sponsor, Nomura Real Estate Development Co., Ltd., for a total of ¥232.3 billion (including assets acquired through M&A, namely an absorption type merger). These asset replacements have improved the quality of NMF’s portfolio.

In light of these achievements, we decided to transition to the second phase of our Medium- to Long-term Management Strategy, the Growth phase, in October 2017.

In the 5th fiscal period, as key initiatives of the growth phase, NMF steadily advanced external growth by leveraging the Nomura Real Estate Group’s property development capabilities and internal growth by making maximum use of the property management pipeline with a focus on strengthening its property brands. As a result, at the end of the 5th fiscal period, NMF’s portfolio comprised 271 properties with a total acquisition price of ¥922.5 billion. Thanks to internal growth in upside sectors, including office and retail, operating revenues totaled ¥34,218 million, operating profit reached ¥13,212 million, and net income came to ¥10,714 million. As a result, the per-unit distribution for the 5th fiscal period came to ¥3,047.

Since the close of the 5th fiscal period, NMF has carried out its first public offering since its founding, acquired nine excellent properties developed by the sponsor, and invested in its first ever hotel. Furthermore, to express our strong ambition toward growth aimed at becoming the brand most trusted by unitholders, we rolled out a new brand strategy and adopted a new logo, featuring a deer motif, timed to align with the public offering.

In the spirit of the ideals expressed in the new logo, we remain strongly committed to enhancing performance and will manage the fund’s assets with the aim of living up to the expectations and trust of our unitholders.

As we move forward, we ask for your continued support and encouragement.


Executive Director of Nomura Real Estate Master Fund, Inc.

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