Japan Real Estate Investment (8952) Q2 2025 earnings summary

Executive summary

• H1 revenue was JPY 42,581m, up 2.8% from the preceding period, and profit rose 1.1% to JPY 18,840m; period-end occupancy was 96.5%.

• DPU rose JPY 133 to JPY 12,349; EPU was JPY 9,593. Rent growth and recovering market rents support occupancy forecasts in the 97% range and an upward EPU trend.

Financial highlights

• Operating profit was JPY 20,640m, ordinary profit JPY 19,523m and profit JPY 18,840m, up 1.6%, 1.1% and 1.1%, respectively, from the preceding period.

• Property-related revenue was JPY 35,881m, expenses JPY 19,383m and property-related profit JPY 16,498m; NOI was JPY 22,640m, JPY 340m above forecast.

• FFO was JPY 18,281m vs JPY 18,457m in the preceding period; operating revenue included a JPY 6,701m gain on the 51% Dojima Tower interest sale.

• Revenue benefited from existing-property rent and utilities, the March 2024 acquisition and disposition gains; higher utilities, repairs, taxes and interest increased expenses.

Outlook and guidance

• March 2025 forecast: revenue JPY 42,900m, operating profit JPY 20,660m, ordinary profit JPY 19,410m and profit JPY 18,730m; occupancy forecast is 97.2%.

• September 2025 forecast: revenue JPY 36,510m, operating profit JPY 15,350m, ordinary profit JPY 13,970m and profit JPY 15,040m; occupancy forecast is 97.0%.

• Forecast DPU is JPY 2,450 for March 2025 and JPY 2,400 for September 2025, post-split; pre-split EPU forecasts are JPY 9,600 and JPY 9,810, respectively.

• March 2025 forecast includes a JPY 6,560m gain on the final Dojima Tower disposal and a reserve-for-reduction-entry provision against part of the gain.