Nippon Building Fund (8951) H2 2025 earnings summary

Executive summary

• Maintained high occupancy rates above 98%, with average occupancy at 98.5% for 2H 2025 across a portfolio of 70 office properties.

• Real estate rental revenues increased by 3.8% year-over-year, driven by acquisitions and internal growth.

• Strategic asset replacements and acquisitions, including new assets in Tokyo and Sapporo, contributed to revenue and NOI growth.

• Total operating revenues for 2H 2025 were ¥48,547 million, down 5.2% sequentially, with net income at ¥19,299 million, down 18.0% sequentially.

Financial highlights

• Net income (excluding profits from dispositions) rose 3.2% year-over-year to ¥19,299 million.

• NOI from property leasing activities increased 3.2% year-over-year to ¥31,149 million.

• Distribution per unit for 2H 2025 was ¥2,454, with a payout ratio of 109.9%.

• Cash and cash equivalents at period-end were ¥28,514 million, up from ¥12,932 million in the previous period.

• Unrealized gains on appraisal value reached ¥367.0 billion as of December 31, 2025.

Outlook and guidance

• Forecasts for 1H 2026 and 2H 2026 project operating revenues of ¥53,924 million and ¥50,639 million, respectively.

• Net income for 1H 2026 is forecast at ¥24,064 million, up 24.7% sequentially, with a subsequent decrease in 2H 2026.

• Distributions per unit are projected at ¥2,460 and ¥2,465 for the 50th and 51st periods, respectively.

• Annualized EPU growth targeted at 2.0% with sustainable DPU growth through internal and external drivers.

• Portfolio adjustments include anticipated acquisitions and dispositions, with occupancy rates expected to remain above 98%.