(8958)
Financial Results for the Six-Month Period Ended September 2023 (the 40th Period)
(Explanatory Material)
16 November 2023
1
2
Overview of Global One Real Estate Investment Corporation (as of 30 September 2023)
Selective Investment in High-quality Office Buildings | Solid Financial Base Supported by Financial Sponsors |
GOR | Average of | |||
other office REITs (*1) | ||||
Walking distance: 0 - 5 min. | 100.0 | % | 79.7 | % |
Average building age | 18.8 | years | 25.7 | years |
Portfolio PML | 1.8 | % (*2) | 2.5 | % |
Average acquisition price | 16.3 | billion yen | 8.8 | billion yen |
Average total leasable area | 11,787 | sqm | 8,060 | sqm |
LTV | Book value basis | 45.2 | % | (*3) |
(Interest-bearing debt / total assets) | Appraisal value basis | 38.2 | % | |
Ratio of long-term / | 87.0 | % | (*3) | |
fixed interest-bearing liabilities | ||||
Average financing term | 6.9 | years | (*3) | |
Average interest rate | 0.64 | % | (*3) | |
Rating | AA-Stable(JCR) | |||
Government-designated cities other than | Total acquisition price | |||||||||||
major 3 metropolitan areas | 13 properties, | |||||||||||
8.0% | 212.5 billion yen | |||||||||||
Sapporo | Otemachi | |||||||||||
Major 3 metropolitan areas | Yodoyabashi 8.0% | 5.0% | ||||||||||
3.7% | Hirakawacho | Tokyo Central | ||||||||||
other than Tokyo | Midosuji | 8.6% | ||||||||||
4.3% | ||||||||||||
Metropolitan Area | Nagoya | Minami- | 5 Wards | |||||||||
16.2% | 8.1% | |||||||||||
aoyama | 34.0% | |||||||||||
16.5% | ||||||||||||
Saitama | ||||||||||||
10.7% | Sengokuyama | |||||||||||
4.0% | ||||||||||||
Tokyo suburban areas | Yokohama | Kinshicho | Tokyo 23 Wards other than | |||||||||
Toyosu 7.6% | ||||||||||||
8.4% Shinagawa | ||||||||||||
19.1% | ||||||||||||
5.6% | 9.9% | the central 5 Wards | ||||||||||
22.8% |
Expertise in | |||||||
real estate investment | |||||||
and management | |||||||
Real estate investment/ | Finance | ||||||
management | Finance | ||||||
Expertise in | |||||||
the financial and trust | |||||||
businesses | |||||||
Finance | Real estate brokerage | ||||||
Expertise in | |||||||
real estate investment | |||||||
and management | |||||||
Real estate development/operation | |||||||
Japan Credit Rating Agency, Ltd. (JCR)
Long-term Issuer Rating
AA-
(Stable)
[Asset Manager]
(*1) | "Other office REITs" refers to J-REITs (excluding GOR) which have an investment policy where 70% or a higher percentage (based on acquisition prices) of funds are allocated to commercial real | |
estate of which main use is office. Average figures are calculated based on figures indicated in the most recent disclosure materials of each REIT that could be confirmed as of 30 September 2023. | ||
(*2) | Portfolio PML of a total of 12 properties excluding Otemachi as of 30 September 2023 | |
(*3) Calculated by deducting the balance of the bridge loan (10.4billion yen) which is scheduled to be repaid using the proceeds from the transfer of Otemachi (hereinafter "bridge loan") from interest- | 3 | |
bearing liabilities and total assets as of 30 September 2023. |
Table of Contents
Ⅰ Preface | |
1.Efforts to Increase Unitholder Value | 6 |
2.Financial Highlights | 7 |
3.Near-term Initiatives | 8 |
Ⅱ Financial Results | |
1.Overview of Financial Results | 10 |
2.Performance Forecast | 12 |
3.Result and Forecast of DPU | 14 |
- Portfolio Management
1.Internal Growth | 16 |
2.External Growth | 25 |
3.Financial Management | 34 |
4.Promotion of ESG | 37 |
Ⅳ Reference Material | |
1.Portfolio Data | 47 |
2.Financial Data | 58 |
3.Overview of Asset Manager | 64 |
The following abbreviations will be used for the following pages:
"GOR" = Global One Real Estate Investment Corporation "GAR" = Global Alliance Realty Co., Ltd.
"Otemachi" = Otemachi First Square "Hirakawacho" = Hirakawacho Mori Tower "Minami-Aoyama" = Rakuten Crimson House Aoyama "Sengokuyama" = ARK Hills Sengokuyama Mori Tower "Kinshicho" = Arca Central
"Toyosu" = Toyosu Prime Square "Shinagawa"= Shinagawa Seaside West Tower "Yokohama" = Yokohama Plaza Building
"Saitama" = Meiji Yasuda Life Insurance Saitama-Shintoshin Building "Midosuji" = Meiji Yasuda Life Insurance Osaka Midosuji Building "Yodoyabashi" = Yodoyabashi Flex Tower
"Sapporo" = THE PEAK SAPPORO "Nagoya" = Global One Nagoya Fushimi "Ueno" = Global One Ueno "Tosabori" =Tosabori Daibiru Building "Shin-Daibiru"=Shin-Daibiru Building
For some terms used in this document, please refer to the notes attached at the end of this document.
Unless otherwise indicated, amounts are rounded down and percentages, number of years, walking time to the station and areas are rounded.
The impacts of the following splits of investment units are taken into consideration for "After split(s)" or "Adjusted after split(s)" in the material.
・2-for-1 split of investment units with 1 April 2014 as the effective date ・4-for-1 split of investment units with 1 April 2018 as the effective date
4
- Preface
5
1.Efforts to Increase Unitholder Value
Actual performance in the 40th Period | Future efforts | ||
DPU | ●Secured an increased amount of 3,038 yen with the partial transfer of Otemachi | ●Aim to stabilize DPU at 2,400 yen or more as ordinary DPU level after the | |
and internally reserved part of the gain on sale | elimination of the gain on sale of Otemachi by utilizing internal reserves as | ||
(*1) | 39th Period:2,860 yen → 40th Period:3,038 yen (+6.2%) | necessary | |
growth | ●Portfolio occupancy rate was 96.6% | ●Recover the occupancy rate as early as possible through leasing up of vacancies | |
●Rent increase through tenant replacement and rent revision | (Especially for Toyosu and Yokohama) | ||
●Aim for rent increase in total through careful dialogue with tenants while having | |||
Internal | The monthly rent based on contracts increased by 2.2 million yen from the | market rents in mind | |
previous period (*2) | ●Capture signs of vacancy rate headway in existing buildings and aim to obtain | ||
better leasing terms | |||
growth | ●Completed the 2nd settlement of the transfer in segment over 5 periods of | ●Asset replacement to enhance portfolio quality | |
●Decided the transfer of Yodoyabashi and acquisition of Ueno (exchange) | ●Further building up the pipeline to achieve the mid- to long-term goal of | ||
Otemachi | Continue with efforts to sale assets for the acquisition of quality properties | ||
External | ●Decided the partial transfer of Minami-Aoyama and partial acquisition of Shin- | achieving an asset size of 250 billion yen | |
pipeline | |||
Daibiru and Tosabori (exchange) | Sourcing drawing upon both the sponsor, etc. route and independent route | ||
●Secured preferential negotiation rights for 2 properties as a Mid-toLong-term | |||
・IR | ●Released 1.2 billion yen of security deposit | ●Further promote diversification of due dates and extension of financing terms | |
●Reduced costs through refinancing at reduced amount of 1 billion yen | ●Flexible LTV control responding to the real estate market conditions and financial | ||
Finance | ●Borrowing of 2.5 billion yen with mixed interest rate loan | environment | |
(floating interest rate + fixed interest rate) | ●Respond to the severe interest rate environment by taking all possible measures, | ||
●"Online IR meetings (with domestic/overseas institutional investors/for retail | including devising financing methods | ||
investors) " | ● Continue to implement green finance | ||
ESG
●Acquired "5 Stars" in the 2023 GRESB Real Estate Assessment and "A Level" for the GRESB Public Disclosure, the highest results for four consecutive years
●Respond to the acquisition of SBTi certification
●Conduct information disclosure in line with the TCFD recommendations (quantitative assessment of the risks of climate change)
●Work for GOR's medium- to long-term growth through ESG initiatives such as responding to "Materiality" and contribute to the achievement of target for the SDGs
(*1) | "DPU" refers to dividend per unit | |
(*2) | Indicates the total amount of rents (including common area charges) for lease agreements that underwent tenant replacement or rent revision during the period, obtained by subtracting monthly | 6 |
rent before rent revision or tenant replacement from monthly rent after rent revision or tenant replacement. |
2.Financial Highlights
DPU for the 40th Period is 3,038 yen. 2,959 yen(*1) is expected for the 41st Period and 2,400 yen(*1) is expected for the 42nd Period
(*1) Including the third portion of the return of gain on sale of Otemachi transferred in segment over five periods (announced on 24 October 2022) in the 41st Period and the fourth portion in the 42nd Period
41st Period | 42nd Period | ||||
39th Period | 40th Period | Forecast | Forecast | ||
Mar '23 | Sep '23 | Mar '24 | Sep '24 | ||
(*7) | (*7) | ||||
I/S - Dividends | |||||
Operating revenue | million yen | 6,664 | 7,239 | 7,191 | 6,443 |
(Property-related revenues) | (5,776) | (6,139) | (6,100) | (6,082) | |
Operating profit | million yen | 3,341 | 3,775 | 3,743 | 3,116 |
(Property-related profits and losses) | (3,074) | (3,345) | (3,351) | (3,383) | |
Net income | million yen | 2,923 | 3,353 | 3,322 | 2,678 |
Total number of | Units | 1,022,826 | 1,022,826 | 1,022,826 | 1,022,826 |
investment units issued | |||||
Net income per unit | yen | (*2) | 2,858 | 3,279 | 3,248 | 2,618 |
Dividend per unit | yen | 2,860 | 3,038 | 2,959 | 2,400 | |
Portfolio | ||||||
NOI yield | % | (*3) | 4.0 | 4.0 | 4.1 | 4.2 |
Term-end occupancy rate | % | (*4) | 96.3 | 96.6 | 97.2 | 95.4 |
(Forecast as of 18 May 2023) | % | 96.5 | 96.5 | |||
Others | ||||||
Term-end total assets | million yen | 209,923 | 220,925 | |||
Interest-bearing liabilities | million yen | 96,600 | 105,600 | |||
Unrealized gain/loss | million yen | 38,156 | 38,950 | |||
LTV (book value) | % | (*5) | 45.4 | 45.2 | ||
LTV (appraisal value) | % | (*6) | 38.3 | 38.2 |
(*2) Net income per unit = net income ÷ total number of investment units issued
(*3) NOI yield = NOI for the six months ×2 ÷ acquisition price
(*4) Ueno, Shin-Daibiru and Tosabori are included in the forecast for the 41st Period and the 42nd Period.
(*5) LTV (book value)=(interest-bearing liabilities - bridge loans) ÷ (term-end total assets - bridge loans)
(*6) LTV (appraisal value)=(interest-bearing liabilities - bridge loans) ÷ (term-end total assets - bridge loans) + unrealized gain/ loss)"
Trend of dividend per unit (DPU)
(yen)
Trend of NAV per unit (*8)
(yen)
by tenants yet to be decided is not factored into
- total dividends + unrealized gain/loss ) ÷total
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3.Near-term Initiatives
Aim to improve unitholder value by striving for growth and stabilization of dividends through various efforts
▶Recover occupancy rate through proactive asset management and improvement of tenant satisfaction
Leasing of Toyosu and Yokohama
▶Further increase opportunities of acquiring properties
Proactive approach to all directions including the further understanding of parties with whom business relationship has been built
Acquisition | |
of quality | |
properties | |
Asset | Rent |
increase/ | |
replacement | Improvement |
of occupancy | |
rate |
▶Acquire better properties to replace assets on our portfolio
Acquisition of properties for which preferential negotiation rights have been secured and promotion of tenant diversification
▶Stable financial management under an environment where interest rates are rising
Achieving stable funding in terms of both diversified maturity and cost reduction by trying every possible means such as the selection of term and green finance
Maximization
Public offering | of | Promote |
Unitholder | ESG | |
Value |
Acquisition | Strategic |
of own | |
financial | |
investment | management |
units | Expansion |
of IR | |
activities |
8
- Financial Results
9
1.Overview of Financial Results (Period ended Sep. 2023) : (1) Comparison with forecast
Profit increased mainly due to the downturn in repairs and maintenance and improvement in revenue and expenditure of utility charges DPU for the 40th Period resulted in 3,038yen, ±0 yen from the dividend forecast
(million yen)
40th Period | 40th Period | Changes from | |||
Forecast | Actual | ||||
40th forecasts | |||||
Sep. '23 | Sep. '23 | ||||
(*1) | |||||
Operating Revenue | 7,252 | 7,239 | -13 | -0.2% | |
Rental revenues(a) | 6,144 | 6,139 | -4 | -0.1% | |
Rental revenues, etc. | 5,729 | 5,736 | 7 | 0.1% | |
Utility charges | 413 | 401 | -11 | -2.9% | |
Other rental revenues | 1 | 1 | 0 | 15.2% | |
Gain on sale of real estate | 1,108 | 1,099 | -8 | -0.8% | |
Operating Expenses | 3,511 | 3,464 | -47 | -1.4% | |
Property-related expenses(b) | 2,835 | 2,794 | -40 | -1.4% | |
Property management fees | 649 | 655 | 5 | 0.9% | |
Utilities expenses | 509 | 481 | -27 | -5.4% | |
Property and other taxes | 556 | 555 | -1 | -0.2% | |
Insurance | 14 | 14 | 0 | 0.4% | |
Repairs and maintenance | 134 | 118 | -16 | -11.9% | |
Depreciation and amortization(c) | 962 | 961 | -1 | -0.1% | |
Loss on retirement of non-current assets(d) | 1 | 1 | -0 | -2.1% | |
Other rental expenses | 5 | 5 | -0 | -2.9% | |
Asset management fees | 489 | 491 | 2 | 0.5% | |
Other general administrative cost | 187 | 178 | -8 | -4.8% | |
Operating Profit | 3,740 | 3,775 | 34 | 0.9% | |
Property-related profits and losses (a-b) | 3,308 | 3,345 | 36 | 1.1% | |
NOI (a-b+c+d) | 4,273 | 4,308 | 35 | 0.8% | |
Non-operating Income | - | 1 | 1 | - | |
Non-operating Expenses | 429 | 422 | -7 | -1.7% | |
Interest expenses | 331 | 324 | -6 | -2.1% | |
Other non-operating expenses | 98 | 98 | -0 | -0.3% | |
Ordinary Profit | 3,311 | 3,354 | 43 | 1.3% | |
Net Income | 3,310 | 3,353 | 43 | 1.3% | |
Reserve for reduction entry | 203 | 246 | 43 | 21.4% | |
Total Dividends | 3,107 | 3,107 | - | - | |
The number of units issued at end of period | 1,022,826 units | 1,022,826 units | - | - | |
Dividend per unit (DPU) | 3,038 yen | 3,038 yen | - | - |
Main reasons for variance (million yen) | Converted to | |||||
Increased Decreased | ||||||
DPU | ||||||
profit | profit | |||||
(*2) | ||||||
Operating profit | 34 | 33 yen | ||||
Property-related profits and losses | 36 | |||||
Increase in rental revenues, etc. | 7 | |||||
Revenue and expenditure of utility charges | 15 | |||||
Increase in property management fees | -5 | |||||
Decrease in property and other taxes | 1 | |||||
Decrease in repairs and maintenance | 16 | |||||
Increase in reserve for reduction entry | -43 | -42 yen |
(*1) Forecasts are figures as of 18 May 2023.
(*2) Figure arrived at by dividing the amount of increase/decrease in profit by the total number of investment units issued (1,022,826 units).
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Global One Real Estate Investment Corporation published this content on 24 November 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 24 November 2023 08:35:07 UTC.