Japan Prime Realty Investment Corporation (8955) demonstrates steady internal growth in its 29th financial results: DPU hike driven by portfolio rental income increase
◎ Financial Highlights and Forecasts
・Operating revenues increased 140 million yen vs previous period to 14.2 billion yen. Net profit increased 140 million yen to 5.89 billion yen.
・Distribution per unit (DPU) increased 168 yen versus previous period to 6,756 yen in June 2016 period.
・DPU saw 126 yen increase compared to initial forecast due to rental income growth and improved utilities expenditures, etc.
・DPU forecast for the 30th period ending December 2016: 7,000 yen (244 yen (+3.6%) increase vs 29th actual )
・Significant increase in portfolio rental income is forecasted trending from June 2016 period.
・Forecast for earnings from leasing business for the 31st period ending June 2017: -24 million yen (vs 30th period forecast)
・Lack of cancellation penalties booked in December 2016 period will impact negatively.
・Underlying positive trend for rental income continues. Further rent increase and cost control will lead to DPU growth.
◎ Internal Growth Strategy
・Improved effective occupancy rate by reduction of rent-free period and downtime
・Continued positive rent reversions upon renewal and tenant turnover.
・Setting target rents and continued rise in average rent.
・Continued rent increase as a result of diminishing effective rent gap.
◎ External Growth Strategy
・Disposal of properties that carry unrealized losses while assuring stable DPU growth. Reinforcing growth capabilities by asset replacements.
◎Financial Strategy
・Extended debt durations with diversified maturity schedule and reduction of interest costs.
◎Medium-term Target
・7,500 yen medium-term DPU targeted by continued internal growth and further upside through external growth.
・Enhancing portfolio yield to achieve stable DPU growth.
・Carefully monitor impact of changes in external environment while making steady progress in portfolio strategy.
・Core initiatives: Rent increase, asset replacements and stable debt financing.
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