Global One Real Estate Investment (8958) Q4 2023 earnings summary

Executive summary

• Six months ended Sep 2023: revenue ¥7,239m (+8.6% YoY), operating profit ¥3,775m (+13.0%), ordinary profit ¥3,354m (+14.7%) and net income ¥3,353m (+14.7%).

• DPU was ¥3,038, up 6.2% YoY, supported by a ¥1,099m Otemachi First Square transfer gain and internal reserves; portfolio occupancy was 96.6%.

• Priorities include leasing vacancies, improving portfolio quality through asset replacement and stabilizing ordinary DPU at ¥2,400 or more after Otemachi sale gains end.

Financial highlights

• NOI increased 8.3% YoY to ¥4,308m; property-related profit rose 8.8% to ¥3,345m.

• Operating profit exceeded forecast by ¥34m, ordinary profit and net income each by ¥43m; DPU of ¥3,038 matched forecast.

• Net income per unit was ¥3,279 for the six months ended Sep 2023, versus ¥2,935 for the six months ended Mar 2023; payout ratio was 92.6%, versus 100.0%.

• Total assets were ¥220,925m at Sep 2023, versus ¥209,923m at Mar 2023; operating, investing and financing cash flows were ¥12,013m, -¥17,972m and ¥6,075m.

• Revenue growth reflected Otemachi sale gains, a full-period Sapporo contribution and the Nagoya acquisition; expenses also rose, including depreciation and asset-management fees.

Outlook and guidance

• Mar 2024 forecast: revenue ¥7,191m, operating profit ¥3,743m, ordinary profit ¥3,323m, net income ¥3,322m and distribution ¥2,959 per unit.

• Sep 2024 forecast: revenue ¥6,443m, operating profit ¥3,116m, ordinary profit ¥2,679m, net income ¥2,678m and distribution ¥2,400 per unit.

• Forecasts include Otemachi First Square sale gains of ¥1,090m in Mar 2024 and ¥360m in Sep 2024; reduction-entry reserves of ¥296m and ¥223m, respectively.

• Forecasts assume 1,022,826 units and specified acquisitions and transfers; unresolved occupancy and rent renewals are excluded, and actual results may vary with rents, repairs and other factors.

• Target ordinary DPU of ¥2,400 or more after Otemachi sale gains end, using internal reserves as needed; leasing and rent revisions are intended to improve occupancy and income.