Distribution Policies

In principle, Nomura Office Fund (NOF) shall distribute profits by way of distributions to its unitholders based on the following policies:

1. The total amount of profits payable (the Distributable Amount) to unitholders is the amount of gross profit generated from the management and operation of the investment portfolio as of the last day of each fiscal period, which is calculated in accordance with the Investment Trust Law and generally accepted accounting principles in Japan.
2. NOF shall determine the total amount of distributions, which must exceed 90% of NOF's distributable earnings as stipulated in the Special Taxation Measures Law (however, the amount shall not exceed the Distributable Amount). In addition, NOF may reserve funds from the Distributable Amount as long-term capital expenditure reserves, necessary for the maintenance of or increasing the value of assets, the reserves for outstanding claims or distributions and/or other similar reserves.
3. Profits retained and not distributed, if any, shall be invested in accordance with the basic policies of NOF and its investment stance.

Cash Distributions Exceeding Profits

If NOF deems it appropriate based on trends in the general economy, real estate market and leasing markets and other factors, NOF may distribute an amount in addition to the Distributable Amount referred to in 2, above; provided, that the additional amount shall not exceed the amount of depreciation on the fixed assets for the relevant the fiscal period.

In this case, if the total amount of distributions does not meet the statutory requirement for such special tax treatments (i.e., allowing such amount being deducted from taxable income) for an investment corporation, NOF may pay distributions where the total amount is determined by NOF for the sole purpose of meeting such requirements.

Although NOF shall make every effort to ensure the stable distribution payment, it shall not make any distributions exceeding the profits as long as the current tax law requires unitholders, to individually calculate capital gains/losses each time such unitholders receive distributions exceeding profits. However, when the Board of Directors of NOF decides that distributions exceeding profits is required, in order to satisfy the requirements for special tax treatment or otherwise, distributions exceeding profits are allowed subject to the aforementioned distribution policies.

Method of Distribution

Distributions shall be distributed in cash and shall be, in principle, distributed within three months from the last day of each fiscal period to the unitholders or pledgees appearing on the close of the register of unitholders and pledgees as of the last day of that fiscal period, in proportion to investment units held by each unitholder. The amounts of distributions applicable to the shares issued during a fiscal period may be determined on a daily pro-rata basis, subject to resolution by the Board of Directors.

Statutory Limitation

In the event distributions are not received within three full years from the date when the cash distributions become first made available, NOF shall no longer be liable for payment thereof. Moreover, no interest shall accrue on such unpaid distributions.

Regulations of The Investment Trusts Association, Japan

In addition to the distribution policies set out in the above, NOF shall comply with the relevant regulations of the Investment Trusts Association, Japan in payment of distributions.