Dear Investors,

On behalf of the Board of Directors, I would like to thank you for your interest in Nomura Real Estate Residential Fund.

Our basic policy is to invest in diversified residential properties targeting the "tenant class with strong demands." We have created a stable portfolio through the acquisition of not only "PROUD FLAT" properties developed by Nomura Real Estate Development, but "PRIME URBAN" and "URBAN STAGE" properties from other sources utilizing the Nomura Real Estate Group's sourcing expertise.

In terms of the asset management, we have implemented flexible and organized leasing strategies and established a conservative financial base to secure stable mid-to-long term revenue.

Also, we have carried out fair and transparent fund management through the prevention of conflict of interests and the enforcement of compliance in order to maintain our position as a REIT committed to meeting the trust and expectation of our investors.

Through the strategies mentioned above, we have steadily increased our assets to a total of 132 billion yen (143 properties) on an acquisition price base as of May 31, 2011.

We believe in contributing to the local community, through acquisition and management of quality residential properties, and to our unitholders, through stable cash distribution.

Once again, we would like to thank our investors to whom we are very grateful and ask for your continued support in the years ahead.

Sincerely,

Yoshinori Hirohata
Executive Director of Nomura Real Estate Residential Fund, Inc.