Nomura Real Estate Master Fund (3462) Q2 2024 earnings summary

Executive summary

• 16th fiscal period revenue rose 9.2% YoY to ¥43,645 million, operating profit increased 17.5% to ¥18,931 million and net income rose 20.1% to ¥16,746 million.

• Distribution reached ¥3,402 per unit, supported by ¥4,706 million in property-sale gains; all distribution came from earnings.

• The portfolio ended August with 290 properties, ¥1,098,534 million acquisition value and 98.9% occupancy, up 0.2 percentage points from February.

• Strategy targets reducing office exposure from 42.7% to the 30% level while pursuing selective acquisitions and internal growth.

• Unrealized gains increased ¥12.0 billion to ¥243.9 billion period-to-period.

Financial highlights

• Operating revenue was ¥43,645 million, operating profit ¥18,931 million, ordinary income ¥16,729 million and net income ¥16,746 million.

• Property-sale gains rose to ¥4,706 million from ¥1,638 million; net income excluding realized gains was ¥12,040 million.

• Total distributions were ¥16,041 million, or ¥3,402 per unit; payout ratio was 95.7%, with no distribution in excess of net earnings.

• NOI was ¥27,097 million and FFO ¥20,434 million; FFO distribution payout ratio was 78.5%.

Outlook and guidance

• Feb. 2024 forecast: revenue ¥39,314 million, operating profit ¥15,001 million, ordinary income ¥12,782 million and net income ¥12,781 million.

• Aug. 2024 forecast: revenue ¥39,384 million, operating profit ¥14,926 million, ordinary income ¥12,688 million and net income ¥12,687 million.

• Forecast distributions are ¥3,376 per unit for Feb. 2024, including ¥541 excess distribution, and ¥3,271 for Aug. 2024, including ¥581 excess distribution.

• Sale-gain distribution policy aims to allocate eligible gains across four periods and return unrealized gains; guidance assumes no portfolio changes through Aug. 2024.