Advance Residence Investment (3269) Q2 2025 earnings summary

Executive summary

• FP 07-2024 DPU was ¥5,925, up 0.4%, while adjusted EPU was ¥5,468, up 2.4%; NOI rose 1.5% to ¥13,686 million.

• Rent growth and remodeling supported portfolio performance; net income declined 2.5% as property-sale gains fell.

• Five sponsor-developed properties were acquired for ¥14.2 billion, and RESIDIA Kita-Shinagawa was sold for ¥2.9 billion, generating a ¥531 million gain after expenses.

Financial highlights

• Operating revenue was ¥18,694 million, operating income ¥8,729 million, ordinary income ¥7,831 million and net income ¥7,830 million; revenue was flat YoY and operating income rose 2.2%.

• EPU excluding property-sale gains increased to ¥5,092, up 2.0%; FFO per unit rose 1.6% to ¥7,525.

• Adjusted EPU includes reserve reversals to offset temporary P&L impacts from remodeling and the depreciation-method revision.

• NOI increased ¥207 million period-over-period to ¥13,686 million; gain on real estate sales declined from ¥875 million to ¥533 million.

Outlook and guidance

• Targets are adjusted EPU of at least ¥5,750 and DPU of at least ¥6,000, with DPU growth increasingly supported by earnings.

• FP 01-2025 forecasts: DPU ¥5,930, adjusted EPU ¥5,488, revenue ¥18,279 million, NOI ¥13,818 million and occupancy 96.0%.

• FP 07-2025 forecasts: DPU ¥5,935, adjusted EPU ¥5,524, revenue ¥18,573 million, NOI ¥14,062 million and occupancy 96.1%.

• Retained-earnings distributions are forecast to decline to ¥175 per unit by FP 07-2025 from ¥222; regular reserve reversals support distributions.

• Remodeling plans cover ~300 units per FP; projected EPU excluding sales gains rises more than 3% around year 10 and more than 15% around year 20, with break-even in ~5 years.