Daiwa Office Investment (8976) Q2 2023 earnings summary

Executive summary

• 35th FP revenue was ¥15,050 million, operating income ¥7,666 million and net income ¥7,100 million; period-end occupancy was 97.7% and distribution was ¥13,700 per unit.

• A ¥1,519 million property-sale gain supported results; distributions are forecast at ¥13,700 per unit through the 37th FP, partly using reserve reversals.

• The portfolio comprised 58 properties with acquisition prices of ¥462,586 million at May 31, 2023.

Financial highlights

• Operating revenue rose 8.3% YoY to ¥15,050 million; operating income rose 9.3% to ¥7,666 million and net income rose 9.0% to ¥7,100 million.

• Net income per unit was ¥14,845 versus ¥13,561; the period included a ¥1,519 million gain on sale of Daiwa SHIBUYA EDGE.

• Property leasing revenue was ¥13,531 million; leasing operating income fell to ¥7,543 million from ¥8,438 million, while repair expenses rose to ¥575 million from ¥131 million.

• Total assets were ¥482,471 million and net assets ¥247,849 million at May 31, 2023.

Outlook and guidance

• 36th FP forecast: revenue ¥13,853 million, operating income ¥6,720 million, net income ¥6,107 million and distribution ¥13,700 per unit.

• 37th FP forecast: revenue ¥13,932 million, operating income ¥6,818 million, net income ¥6,169 million and distribution ¥13,700 per unit.

• Planned distributions include reserve reversals of ¥444 million in the 36th FP and ¥382 million in the 37th FP; forecasts assume no property-sale gains or losses.

• Forecast period-end occupancy is 97.3% in both periods; priorities include filling large vacancies and capturing rent upside at properties with rent gaps.