Japan Prime Realty Investment Corporation (8955): Made steady progress in line with its plan in the 33rd financial period and again recorded historical high DPU of 7,245 yen since IPO

◎Result highlights and forecast
・Operating revenues and profit recorded 15.2billion yen (+63million yen vs previous period) and 7.33billion yen (-230million yen), respectively
・Distribution per unit (DPU) marked 7,245 yen (+22 yen vs previous period), greater than initial forecast due to increase in rental income and cancellation charges
・Continued rent income growth was achieved. Despite significant increase in property taxes, DPU was increased for 9 consecutive periods due to non-operating revenues and financial cost reduction
・Forecasts for operating revenues, operating profit and DPU in the 34th financial period are 15.54 billion yen, 7.56 billion yen and 7,280 yen (+35yen vs previous period), respectively
・Due to progress in positive rent revisions and re-tenanting, significant increase in rent revenue is anticipated
・Absence of non-operating revenues booked in the previous period will be absorbed. Incremental DPU is likely to be secured
・Forecasts for operating revenues, operating profit and DPU in the 35th financial period are 15.44 billion yen, 7.5 billion yen and 7,300yen (+20yen vs previous period), respectively
・Growth in DPU is forecasted to continue
・Continuous rental growth, debt cost reduction and cost control initiatives will lead to achieve medium-term targets

◎Growth Strategy
▽Internal growth strategy
・Despite tenant departures concentrated in June 2018 period, prompt re-tenanting was attained
・Rent-generating occupancy rate is forecasted to remain high after December 2018 period
・Successful positive rent revisions and incremental rent upon tenant turnover sustained rent growth in the office portfolio
・Rent levels are on the rise across all areas including central Tokyo where massive property supply occurs
・Active initiatives will be implemented for sustainable rent growth, increase in incidental income and cost reduction
・Competitiveness of properties will be maintained by well-planned and continual maintenance and asset enhancement investments
・While recent new office supply were centered on very large buildings in central Tokyo, JPR’s portfolio is mainly composed of large- and middle-sized buildings
・Retail properties are located in prime locations and commercially viable areas in the proximity of major train stations
・Occupancy rate of retail properties is nearly full on a stable basis
▽External growth strategy
・Quality-oriented selective investments will continue mainly focusing on office properties in Tokyo
・Aiming for more acquisition opportunities, target investment asset class will be revisited
・By leveraging sponsor pipeline and first rights, selective investments and asset reshuffle will be pursued
▽Financial strategy
・Levelled-out maturity schedule over a long period and debt cost reduction are both achieved
▽Sustainability
・Consistent efforts for sustainability
・Enhanced programs for eco-friendliness
・Initiatives for tenant satisfaction improvement (CS)
・Endeavors will be further made to enhance healthiness of the management to remain a creditworthy investment corporation/investment management company