Nomura Real Estate Master Fund : (Reference) SUMMARY OF FINANCIAL RESULTS (REIT) For the 7th Fiscal Period Ended February 28, 2019

(Reference) SUMMARY OF FINANCIAL RESULTS (REIT)

For the 7th Fiscal Period Ended February 28, 2019

April 12, 2019

REIT securities issuer:	Nomura Real Estate Master Fund, Inc. ("NMF")	Tokyo Stock Exchange
Securities code:	3462
Representative:	Shuhei Yoshida, Executive Director
Asset management company:	Nomura Real Estate Asset Management Co., Ltd.
Representative:	Norio Ambe, President and Chief Executive Officer
Inquiries:

Stock exchange listing:

URL:https://www.nre-mf.co.jp/en/Hiroshi Ishigooka, Head of NMF Investment Management GroupTEL: [phone]

Scheduled date of filing of securities report:	May 29, 2019
Scheduled date of commencement of distribution payout:	May 17, 2019
Preparation of supplementary materials on financial results:	Yes
Holding of briefing session on financial results:	Yes (for institutional investors and analysts)
[Amounts less than one million yen are truncated]

1. Financial Results for the 7th Fiscal Period (from September 1, 2018 to February 28, 2019)

(1) Operating Results

[ % figures are the rate of increase (decrease) compared with the previous period]

Operating revenues		Operating profit		Ordinary income		Net income
Period ended February 28, 2019 August 31, 2018	million yen 35,428 34,731	% 2.0 1.5	million yen 14,056 13,285	% 5.8 0.6	million yen 11,516 10,755	% 7.1 0.4	million yen 11,560 10,709	% 7.9 (0.0)

Net income per unit	Return on unitholders' equity	Ratio of ordinary income to total assets	Ratio of ordinary income to operating revenues
Period ended February 28, 2019 August 31, 2018	yen 2,675 2,478	% 2.0 1.9	% 1.0 1.0	% 32.5 31.0

(2) Distributions

Distribution per unit (excluding distribution in excess of net income)	Total distributions (excluding distribution in excess of net income)	Distribution in excess of net income per unit	Total distributions in excess of net income	Distribution per unit (including distribution in excess of net income)	Total distributions (including distribution in excess of net income)	Distribution payout ratio	Ratio of distributions to net assets
Period ended February 28, 2019 August 31, 2018	yen 2,623 2,478	million yen 11,336 10,709	yen 505 606	million yen 2,182 2,619	yen 3,128 3,084	million yen 13,518 13,328	% 98.0 99.9	% 1.9 1.8

(Note 1) Of the ¥606 distribution in excess of net income per unit in the fiscal period ended August 31, 2018, ¥306 is a distribution of the allowance for temporary difference adjustments and ¥300 is other distributions in excess of net income . Furthermore, the ratio of decreasing surplus is 0.003. Of the ¥505 distribution in excess of net income per unit in the fiscal period ended February 28, 2019, ¥361 is a distribution of the allowance for temporary difference adjustments and ¥144 is other distributions in excess of net income (see 2. Management Policy and Management Status, (2)Furthermore, the ratio of decreasing surplus is 0.002.

Management Status, D. Business Performance and Distributions, below)

(Note 2) Distribution Payout Ratio is calculated using the below formula and truncated at the first decimal place.

Distribution Payout Ratio = Total Distributions (excluding distribution in excess of Net Income) / Net Income × 100 (Note 3) Ratio of Distributions to Net Assets is calculated using the below formula and truncated at the first decimal place.

Ratio of Distributions to Net Assets = Distribution Per Unit (excluding distribution in excess of Net Income) / {(Net Assets per Unit at the beginning of the fiscal period + Net Assets per Unit at the end of the fiscal period) / 2} × 100

(3) Financial Position

Total assets	Net assets	Net assets to total assets	Net assets per unit
Period ended February 28, 2019 August 31, 2018	million yen 1,117,851 1,118,644	million yen 569,843 571,836	% 51.0 51.1	yen 131,853 132,314

(4) Status of Cash Flows

Net cash provided by (used in) operating activities	Net cash provided by (used in) investing activities	Net cash provided by (used in) financing activities	Cash and cash equivalents at end of period
Period ended February 28, 2019 August 31, 2018	million yen 24,256 17,570	million yen (11,217) (36,129)	million yen (13,383) 16,579	million yen 74,212 74,556
2. Earnings Forecasts for the 7th Fiscal Period (from March 1, 2019 to August 31, 2019)

[% figures are the ratio of increase (decrease) compared with the previous period]

Operating revenues		Operating profit		Ordinary income		Net income		Distribution per unit (excluding distribution in excess of net income)	Distribution in excess of net income per unit	Distribution per unit (including distribution in excess of net income)
Period ending August 31, 2019	million yen 36,394	% 2.7	million yen 14,172	% 0.8	million yen 11,562	% 0.4	million yen 11,561	% 0.0	yen 2,541	yen 641	yen 3,182

(Reference) Forecast net income per unit for the fiscal period ending August 31, 2019 is ¥2,542.

*Other

• (1) Changes in Accounting Policies, Changes in Accounting Estimates and Retrospective Restatements

  ① Changes in accounting policies accompanying amendments to accounting standards, etc.: ② Changes in accounting policies other than those in ① : ③ Changes in accounting estimates: ④ Retrospective restatements:

  None None None None

• (2) Number of Investment Units Issued and Treasury Investment Units ① Number of investment units issued (including treasury investment units)

  As of February 28, 2019:	4,321,800 units
  As of August 31, 2018:	4,321,800 units
  ② Number of treasury investment units
  As of February 28, 2019:	- units
  As of August 31, 2018:	- units

  (Note) For the number of investment units used as the basis for calculation of net income per unit, please refer to

"Notes on Per Unit Information" on page 34.

* Status of audit procedure implementation

At the time of the disclosure of this document, audit procedures for financial statements pursuant to the Financial Instruments and Exchange Act (Act No. 25 of 1948, including subsequent amendments) have not been completed.

* Forward-looking statements

The earnings forecasts and other forward-looking statements contained in this document are based on information currently available to and certain assumptions deemed reasonable by NMF. Accordingly, actual earnings performance and other results may differ materially due to a variety of factors. Furthermore, such forward-looking statements do not constitute a guarantee of future distributions. For more information on the assumptions underlying forward-looking statements and the use of such statements, please refer to "Assumptions Underlying Earnings Forecasts for the Fiscal Period Ending August 31, 2019 (8th fiscal period: March 31, 2019 to August 31, 2019) and the Fiscal Period Ending February 29, 2020 (9th fiscal period: September 1, 2019 to February 29, 2020)" on page 10.

This is an English language translation of the original Japanese announcement of the financial statements ("Kessan Tanshin"). This translation is provided for information purpose only. Should there be any discrepancy between this translation and the Japanese original, the Japanese original shall prevail.

Attachment

Table of Contents

• 1. Related Corporations of the Investment Corporation............................................ 2

• 2. Management Policy and Management Status................................................... 2

  • (1) Management Policy..................................................................... 2

  • (2) Management Status..................................................................... 2

• 3. Financial Statements .................................................................... 13

(1) Balance Sheet ......................................................................... 13

(2) Statement of Income and Retained Earnings ................................................. 16

(3) Statement of Changes in Net Assets ........................................................ 17

(4) Statement of Cash Distributions ........................................................... 21

(5) Statement of Cash Flows ................................................................ 23

(6) Notes Concerning the Going Concern Assumption ............................................ 25

(7) Notes Concerning Significant Accounting Policies ............................................. 25

(8) Notes to Financial Statements ............................................................ 26

(9)Increase (Decrease) in Total Number of Investment Units Issued and Outstanding .................... 36

4. Changes in Directors ...................................................................... 37

(1) Changes in NMF Directors .............................................................. 37

(2) Changes in Asset Management Company Directors ............................................ 37

5. Reference Information ..................................................................... 38

(1) Investment Status ...................................................................... 39

(2) Investment Assets ..................................................................... 40

• 1. Related Corporations of the Investment Corporation

  Disclosure is omitted because there are no significant changes from the information presented under "Structure of the Investment Corporation" in the most recently published securities report filed on November 29, 2018.

• 2. Management Policy and Management Status

• (1) Management Policy

  Disclosure is omitted, since there are no significant changes from the "Investment Policy", "Investment Targets" and "Distribution Policy" presented in the securities report filed on November 29, 2018.

• (2) Management Status ① Outline of Fiscal Period under Review

NMF's basic policy is to manage its assets mainly as investments in real estate, etc. (meaning the assets specified in the Ordinance for Enforcement of the Act on Investment Trusts and Investment Corporations (Prime Minister's Office Ordinance No. 129 of 2000, including subsequent amendments)), specifically real estate, leaseholds of real estate, surface rights, and the beneficial interests of trusts formed by entrustment of only these assets, to secure stable income over the medium to long term and steady growth of assets under management (Note). In order to realize this basic policy, NMF adopts an investment strategy that centers on the Greater Tokyo area (Tokyo, Kanagawa, Chiba and Saitama prefectures), which offers strong tenant demand, while also considering regional diversification through investment in all of Japan's three major metropolitan areas and other major cities. By combining the "diversified type strategy," in which investments are made in a variety of facilities, such as offices, retail facilities, logistics facilities, residential facilities and other facilities with the "large-scale REIT strategy," which increases portfolio stability through property and tenant diversification, as well as the "leasing value chain" with the Sponsor, Nomura Real Estate Development Co. Ltd. which is one of the group company of the Nomura Real Estate Group (Nomura Real Estate Holdings, Inc. and its consolidated subsidiaries etc. The same shall apply hereinafter.), NMF aims to increase unitholder value by securing stable income over the medium to long term and the steady growth of assets under management.

(Note)Throughout this document, "assets under management" refers to assets that belong to NMF.

Furthermore, "Real estate, etc." refers to assets defined in Article 29, Paragraph 1 (1) or (2) of NMF's Articles of Incorporation, and "real estate backed securities" refers to assets defined in Article 29, Paragraph 1 (3) of NMF's Articles of Incorporation ("Real estate, etc." and "real estate-backed securities" are hereinafter collectively referred to as "real estate-related assets"). Real estate and the underlying real estate of real estate-related assets are together referred to as the "real estate under management" or "properties."

A. Investment Environment

The Japanese economy faces increasing uncertainty concerning future corporate performance as exports weaken in the wake of U.S.-China trade friction and slowdown of the Chinese economy.

In the J-REIT market, the Tokyo Stock Exchange's REIT index in February 2019 remained solid, sitting in the range of 1,800 points throughout the month for the first time since January 2017 and backed by the strong real estate leasing market as well as the ongoing monetary easing policy.

With regard to the office market, vacancy rates remained low in Tokyo. In addition, rents continued to gradually climb due to strong demand for increased floor space and expansion-driven relocations. Leasing of large buildings scheduled to be completed in 2019 has been progressing smoothly, and new vacancies created by tenants moving out have little impact. Major cities in less populated regions, where new supply is more limited, have seen vacancy rates remain low and rents continuing to trend upward.

In the retail facility market, private-sector consumption continued to be sluggish and retailers, especially those handling clothing, struggled. In addition, the retail districts of major cities which had been strong saw trends such as a decrease in sales of high-end items at department stores due to regulations on online sales of imported goods and the economic slowdown in China. However, with the continuing upward trend in the number of foreign visitors to Japan, some say the impact of the regulations on the future course is limited.

In the logistics facility market, overall performance has been stable, buoyed by firm demand from online shopping outlets and third-party logistics providers (Note), NMF's main logistics facility tenants. In the greater Tokyo area, a large supply of logistics facilities has continued, leading to our forecast of a temporary rise in the vacancy rate. However, the vacancy rate is likely to soon be improved due to persistent demand.

(Note) Third-party logistics (3PL) refers to logistics services outsourced by shippers for part or all of their logistics functions.

Concerning the rental apartment market, in the Greater Tokyo area, a net population inflow and a dwindling supply of apartments have resulted in consistently high occupancy rates as well as moderate increase in rents. Performance in major cities in less populated regions remained steady overall as well.

In the hotel market, occupancy rates and revenue per available room (RevPAR) were steady overall in the greater Tokyo area and other major urban areas due to the number of foreign visitors, continuing to mark the highest.

In the real estate transaction market, under the ongoing ultra-low interest rate policy, investors continued to lean towards acquiring business real estate as an effective investment vehicle, ramping up competition for acquisitions and keeping selling prices high.

B.

Management Performance

Under the circumstances described above in A. Investment Environment, during the fiscal period under review (the 7th fiscal period), NMF acquired 2 properties (NMF Kobe Myodani Building and Serenite Shinsaibashi Grande; total acquisition price: ¥9,127 million), and sold 5 properties (PRIME URBAN Esaka I, PRIME URBAN Esaka II, PRIME URBAN Esaka III, PRIME URBAN Tamatsukuri and PRIME URBAN Chikusa; total sale price: ¥5,347 million). As a result, at the end of the fiscal period under review (February 28, 2019), NMF held 278 properties (total acquisition price: ¥960,345 million), the ratio of investment in the Greater Tokyo area was 81.8%, the gross leasable area of the portfolio was 1,878,805.81m2 , and the portfolio remained highly diversified.

After the close of the fiscal period under review, NMF acquired 9 properties (PMO Tamachi Higashi, PMO Hatchobori Shinkawa, PMO Kyobashi Higashi, GEMS Shinbashi, GEMS Kayabacho, Summit Store Honamanuma, GEMS Shin-Yokohama, GEMS Namba and Landport Ome I; total acquisition price: ¥44,409 million) on March 1, 2019, and 1 property (PMO Ochanomizu; acquisition price: ¥3,890 million) on April 1, 2019 by carrying out a public offering and debt financings

In terms of property and facility management, as described above in A. Investment Environment, rental demand is expanding, backed by the gradual recovery of the Japanese economy. Accordingly, the occupancy rate of the entire portfolio as of the end of the fiscal period under review was stable and high, at 99.3%. In the office sector, a key upside sector (Note 1), the rental market has seen particularly notable recovery, with rises in newly advertised rents and successful rent increases upon contract renewal driving the internal growth of the portfolio as a whole.

NMF is striving to minimize environmental burdens attributable to its portfolio. NMF therefore engages in investment in environmentally friendly properties while working to enhance the efficiency of its energy use by, for example, introducing eco-friendly and energy-saving countermeasures at its properties. Based on such policy, NMF promotes acquisition of DBJ Green Building certification and BELS certification by its properties. As of the end of the fiscal period under review, NMF has acquired DBJ Green Building certification for a total of 48 properties while acquiring BELS certification for a total of 19 properties. The percentage (Note 2) of properties with DBJ Green Building certification stands at 56.0% and that of properties with BELS certification at 19.6%.

(Note1) Upside sectors refer to sectors for which an increase of rental revenue can be expected, in particular offices, retail facilities in station areas and hotels. The same shall apply hereinafter.

(Note 2) The percentage figures of the certified properties are calculated based on total floor areas for properties excluding land owned by

NMF.

C. Status of Fund Procurement

During the fiscal period under review, NMF refinanced ¥28,375 million in interest-bearing liabilities with maturities. As a result, the balance of interest-bearing liabilities at the end of the fiscal period under review