Activia Properties (3279) Q4 2024 earnings summary

Executive summary

• FP26 EPU was ¥8,516, ¥256 above forecast; DPU was ¥9,300, supported by a ¥784-per-unit reserve reversal.

• Strategy shifted toward EPU growth, with the ¥8,700 target expected in FP28, one year ahead of schedule, through internal growth.

• Period-end portfolio occupancy was 99.3%; it comprised 45 properties with ¥541,800mn acquisition cost.

Financial highlights

• FP26 revenue was ¥15,708mn, operating profit ¥7,802mn and profit ¥6,745.7mn; revenue declined 1.3% and profit declined 9.0% year over year.

• Leasing revenue was ¥14,412mn; leasing expenses rose to ¥6,659mn and leasing profit declined to ¥9,050mn. No property-sale gain was recorded, versus ¥490mn in the prior period.

• NOI excluding property-sale gains was ¥10.618bn, down ¥183mn from the prior period.

• NAV per unit was ¥457,596, up ¥1,619 from the prior period; portfolio unrealized gain was ¥94.68bn.

• Operating cash flow was ¥8,690mn; investing and financing cash outflows were ¥1,532mn and ¥8,620mn, respectively. Period-end cash was ¥21,382mn.

Outlook and guidance

• FP27 forecasts: revenue ¥15,709mn, operating profit ¥7,876mn, profit ¥6,749mn and DPU ¥8,700; FP28 forecasts: ¥16,123mn, ¥8,156mn, ¥6,956mn and ¥8,782, respectively.

• EPU forecasts are ¥8,521 for FP27 and ¥8,782 for FP28, including ¥269 per unit of one-off tenant-replacement income; stabilized FP28 EPU is ¥8,700.

• Expected rent income increases total ¥290 per unit across FP27 and FP28; from FP29 onward, the aim is EPU growth outpacing inflation.

• Internal growth priorities include shorter leasing downtime, strategic rent increases, cost control and high-street retail leasing.

• Forecasts assume 45 held properties, unchanged 792,106 units and LTV near 47%; rents, tenant changes, repairs and market conditions may affect results.