GLP J-REIT (3281) Q2 2024 earnings summary

Executive summary

• Feb. 2024 DPU was ¥2,760, 4.6% above the Apr. 2023 forecast; excluding temporary factors, DPU was ¥2,848, 7.9% above forecast.

• High occupancy and rent growth supported distributions; Aug. 2024 DPU is forecast at ¥2,885, while reported earnings declined as the prior period’s property-sale gain fell away.

Financial highlights

• Feb. 2024 revenue was ¥25.824bn, operating income ¥13.577bn, ordinary income ¥11.995bn and net income ¥12.704bn; declines reflected the prior period’s GLP Ebetsu sale gain.

• Actual NOI was ¥21.145bn, up 8.6% from the Apr. 2023 forecast; average occupancy was 99.6%.

• Rental revenues increased to ¥24.135bn from ¥23.883bn; property-leasing operating income rose to ¥16.644bn from ¥16.401bn, while property-related expenses fell to ¥9.051bn from ¥9.370bn.

• Actual DPU of ¥2,760 exceeded the Oct. 2023 forecast of ¥2,753; earnings distributions were ¥2,594/unit plus ¥166/unit OPD.

Outlook and guidance

• Aug. 2024 forecast: revenue ¥26.111bn, operating income ¥13.387bn, ordinary income ¥11.756bn, net income ¥12.651bn and DPU ¥2,885.

• Feb. 2025 forecast: revenue ¥25.627bn, operating income ¥13.105bn, ordinary income ¥11.395bn, net income ¥11.588bn and DPU ¥2,667; lower net income reflects no assumed extraordinary insurance income.

• Aug. 2024 NOI is forecast at ¥21.177bn and occupancy at 99.4%; Feb. 2025 NOI and occupancy are forecast at ¥20.642bn and 98.5%.

• For Aug. 2024, 16 contracts covering 285K sqm reach maturity; renewal rent growth and CPI-linked increases are each estimated at 5%–6%.

• Forecast distributions include a ¥25/unit temporary OPD alongside continuous OPD; forecast LTV is 44.6% at Aug. 2024 and 44.8% at Feb. 2025 period-end.