Japan Prime Realty Investment Corporation (8955)’s financial results demonstrate EPU (excluding factors such as capital gains) to be on recovery track after bottoming in December 2021 period. DPU is guided 7,750 yen by returning capital gains to mark equivalent of the past historical high.

Japan Prime Realty Investment Corporation (8955)’s financial results demonstrate EPU (excluding factors such as capital gains) to be on recovery track after bottoming in December 2021 period. DPU is guided 7,750 yen by returning capital gains to mark equivalent of the past historical high.

◎Financial Highlights
・Operating revenues marked 18.25 billion yen (+5.5% period-on-period) with operating profit 8.62 billion yen (-1.9% PoP).
・EPU (excluding factors such as capital gains) will be on recovery track after bottoming in December 2021 period.
・Distribution per unit (DPU) recorded 7,550 yen.
＜Guidance＞
・June 2022: Operating revenues18.16 billion yen; operating profit 9.24 billion yen
・DPU guidance is 7,750 yen, equivalent of the historical high by returning capital gains.
・December 2022: Operating revenues18.38 billion yen; operating profit 9.37billion yen
・DPU guidance is 7,750 yen.

◎Review of operation and growth strategy
▽Growth strategy
・Accelerated external growth, effective asset reshuffles and strategic utilization of capital gains/retained earnings will foster DPU/NAV growth and sustainable shareholder value enhancement.
▽DPU strategy
・Abundant internal reserves will be tapped to underpin distribution till the market is back on recovery.
・Medium-term 7,800 yen target is to be attained by swift occupancy improvement and external growth
▽Internal growth strategy
・Occupancy rate based on concluded contracts is expected to turn around from June 2022 period. Leasing remains the focus to better the occupancy rate.
・Negotiations for upward rent revision will be pursed toward tenants carrying positive rent gap
・Heed must be paid to COVID-19 trend and massive new office supply scheduled in central Tokyo area in 2023.
▽External growth strategy
・Sponsor pipeline will be fully leveraged for well-balanced asset acquisitions while focusing on office properties in Tokyo.
・Assets will be reshuffled in the aim of portfolio quality improvement.
・Retail and hotel acquisitions will be given consideration based on prudent view on demand recovery, etc.
▽Financial strategy
・LTV will be controlled conservatively.
・Debt will be managed in view of financial soundness.
・Further diversification in financing will be considered.
・Attention will be paid to interest rate trend and impact of BASEL III.
▽Sustainability
・Cross-functional endeavors are underway to promote 2030 strategic objectives and materiality.
・CO2 emission net zero is targeted to help realize de-carbonized society.