Hulic Reit (3295) investor relations material

Executive summary

• 25th FP adjusted EPU was ¥3,455, 3.0% above forecast, while DPU remained ¥4,000; rent growth, hotel variable rent and portfolio replacement supported results.

• Revenue and profit declined YoY, but portfolio occupancy remained 99.7%.

• Strategy shifted toward replacing assets with Tokyo-area offices, retail and hotels to improve portfolio quality and growth potential.

Financial highlights

• 25th FP operating revenue was ¥12,278mn, operating profit ¥6,733mn, ordinary profit ¥5,757mn and net profit ¥5,754mn; revenue and profits declined 3.0%–5.0% YoY.

• Real estate lease revenue was ¥11,107mn and property-sale gains were ¥1,170mn; DPU was ¥4,000 versus ¥4,050 in 24th FP.

• Adjusted EPU of ¥3,455 exceeded the ¥3,355 forecast by ¥100; hotel variable rent and lower-than-assumed interest costs contributed to the upside.

• Operating cash flow was ¥14,933mn; investing and financing cash outflows were ¥5,931mn and ¥7,631mn, respectively; period-end cash was ¥16,841mn.

Outlook and guidance

• 26th FP forecast: revenue ¥12,228mn, operating profit ¥6,489mn, ordinary profit ¥5,279mn, net profit ¥5,278mn and DPU ¥4,000.

• 27th FP forecast: revenue ¥12,655mn, operating profit ¥6,206mn, ordinary profit ¥5,257mn, net profit ¥5,256mn and DPU ¥4,000.

• Target average annual growth of 2% in adjusted EPU and DPU; DPU target remains ¥4,000 or more under the two-year return plan.

• Forecasts assume average occupancy of 99.4%, reserve reversals of ¥481mn and ¥503mn, and fire-insurance income of ¥222mn and ¥734mn; actual results and sale gains may differ.