Japan Prime Realty Investment Corporation (JPR) (8955) attained mid-term ¥6,500 DPU target in the 28th financial period.
◎Financial highlights and forecast
・Operating revenue was ¥14.1billion (-1% vs previous period) with ¥5.75 billion net profit (+2.6%).
・Distribution per unit (DPU) for December 2015 period surpassed forecast and the previous period. Forecast for June 2016 period has been upgraded.
・DPU for the 28th period was ¥6,588 (+2.6% vs previous period), with forecast for the 29th period ¥6,630 (+0.6%).
・Having achieved mid-term ¥6,500 DPU target, JPR projects steady DPU accretion toward stable growth.
・Internal growth: strong occupancy trends. Impact from tenant departures in June 2015 period was supplemented by leasing out other properties.
・Internal growth: rental income to rise after June 2016 period. Contribution from lease-out of focused properties will take effect.
・External growth: JPR will continue to explore acquisitions of offices and retail properties in central Tokyo in anticipation for its portfolio growth.
・Financial: debt cost has been further reduced together with extended duration.
◎Operational status and strategy
・Occupancy rate: Over 97% average continues. The rate was improved from 96.7% in end of June 2015 to 97.4% in December 2015.
・Average rent per tsubo is on upward trend. Upward rent revisions and increase in rent with new tenants were promoted.
・By achieving rental increase target, significant topline growth is forecasted in June 2016 period and strong trend is expected to continue.
・Target rent will be revisited as the market changes. Leasing activities will be promoted focusing on rent increase.
・Debt acquisition capacity will be leveraged to promote quality-oriented external growth strategy.
・Additional stake acquisition was made for Shinjuku Square Tower, a prime office property in central Tokyo.
□Financial and others
・Appreciation in appraisal values resulted in unrealized gains of 19.1 billion yen in end of December 2015.
・LTV is controlled within 50% in principle. Long-term fixed interest accounts for 99.4% in total debt.
・Debt cost has been reduced as a result of extended duration and maturity diversification.
・Based on one-on-one transactions, lender formation was established with 24 financial institutions. In the aim of lender diversification and debt cost reduction, investment corporation bonds will be issued expeditiously.
・In addition to steady internal growth, selective investments will realize revenue growth and stable DPU accretion.