KDX Realty Investment (8972) H2 2025 earnings summary

Executive summary

• Targeting 3% or more annual DPU growth, with a focus on balance sheet management, LTV control, and asset reshuffling.

• Operating revenues for the six months ended April 30, 2025, were ¥38,847 million, down 1.4% period-on-period, with net income at ¥16,854 million, down 0.9% from the previous period.

• Disposed of 17 properties for 33.1 bn yen and acquired 4 properties for 19.4 bn yen in the period, emphasizing portfolio quality improvement.

• Portfolio occupancy remained high at 98.9% at period end.

• Achieved strong rent growth across the portfolio, especially in hotels, and conducted a second unit buyback to enhance DPU and capital efficiency.

Financial highlights

• Operating revenue for Apr. 2025 was 38,847 mn yen, down 558 mn yen from Oct. 2024 due to property dispositions.

• Rental revenue increased to 33,333 mn yen, up 332 mn yen from Oct. 2024, driven by internal growth.

• Net income for Apr. 2025 was 16,854 mn yen, a decrease of 153 mn yen compared to Oct. 2024.

• DPU rose to 4,045 yen in Apr. 2025, up 15 yen from Oct. 2024, with EPU at 4,153 yen and a payout ratio of 96.9%.

• NAV per unit increased by 1,000 yen to 185,000 yen as of Apr. 2025.

Outlook and guidance

• Forecast DPU for Oct. 2025 and Apr. 2026 is 4,105 yen and 4,166 yen, respectively, with internal growth expected to offset revenue declines from further dispositions.

• EPU is expected to temporarily decline in Apr. 2026 but aims to recover through property acquisitions or additional unit buybacks.

• Forecasts assume no major changes in the property portfolio except for scheduled dispositions.