Daiwa Office Investment (8976) Q4 2024 earnings summary

Executive summary

• 38th FP (June–November 2024) revenue was ¥15,215 million, operating income ¥7,973 million, ordinary income ¥7,164 million and net income ¥7,163 million; all increased YoY.

• Period-end occupancy reached 97.7%, above the 97.1% forecast; rent increases continued on tenant replacements and renewals.

• Distribution was ¥6,920 per unit; forecasts hold at ¥6,920 for both 2025 periods.

Financial highlights

• Operating revenue rose 12.1% YoY to ¥15,215 million; operating income increased 16.0% to ¥7,973 million, and net income rose 15.3% to ¥7,163 million.

• Property rental income was ¥13,993 million; a ¥1,204 million gain on the sale of a 40% quasi co-ownership interest in Daiwa Tsukishima contributed to results.

• Rental operating profit excluding sale gains was ¥8,209 million, down ¥13 million YoY.

• Total assets were ¥491,238 million and net assets ¥244,969 million at period-end; NAV per unit increased ¥4,187 to ¥403,843.

Outlook and guidance

• 39th-period forecast: revenue ¥15,097 million, operating income ¥7,850 million, net income ¥6,885 million and distribution ¥6,920 per unit.

• 40th-period forecast: revenue ¥15,007 million, operating income ¥7,596 million, net income ¥6,549 million and distribution ¥6,920 per unit.

• Forecasts include Tsukishima sale gains of ¥926 million in the 39th period and ¥400 million in the 40th; the remaining 30% interest is scheduled for sale in November 2025.

• Period-end occupancy is forecast at 97.9% in May 2025 and 97.8% in November 2025; expected NOI yields are 4.5% and 4.6%, respectively.

• Rent growth at existing properties, including Daiwa Akihabara, and maintenance-cost leveling are expected to improve EPU from November 2025 onward.