Nippon Building Fund (8951) H2 2024 earnings summary

Executive summary

• Achieved high occupancy rates in the 98% range, with rental revenues increasing by 2.7% year-over-year and EPU up 2.0% from the 47th to 49th period.

• Total operating revenues for the period ended December 31, 2024, were ¥50,810 million, up 1.1% year-over-year, with net income at ¥22,666 million, down 2.9% from the previous period.

• Portfolio comprised 67 office properties with a 98.0% occupancy rate, reflecting stable leasing and tenant retention.

• Distributions per unit were ¥2,462, a 5.9% decrease from the previous period, reflecting tax reserve adjustments.

• Maintained a solid financial position with LTV at 42.4% and long-term fixed interest rate ratio at 88.2%.

Financial highlights

• 2H 2024 operating revenues: ¥50,810 million, up 1.1% from 1H 2024; net income: ¥22,666 million, down 2.9% period-over-period.

• NOI from property leasing: ¥29,326 million; NOI yield: 4.34%.

• NAV per unit: ¥121,834; payout ratio: 92.3%.

• Net assets stood at ¥710,444 million, with a unitholders’ equity ratio of 51.4%.

• Net income per unit was ¥2,665, and return on unitholders’ equity was 3.2%.

Outlook and guidance

• Forecasts for 1H and 2H 2025 project continued rental revenue growth (+2.7% annually), with occupancy rates expected to remain above 98%.

• For the 48th period (ending June 30, 2025), forecasted operating revenues are ¥50,600 million and net income is ¥22,656 million; for the 49th period (ending December 31, 2025), operating revenues are expected to decline to ¥47,311 million and net income to ¥18,289 million.

• Cash distribution per unit is forecasted at ¥2,400 for both upcoming periods.

• New distribution policy to distribute 110% of EPU, targeting DPU over ¥2,400.

• Portfolio to increase to 68 properties after scheduled acquisitions and dispositions in 2025.