Nomura Real Estate Master Fund (3462) Q2 2026 earnings summary

Executive summary

• Aug. 2025 FP DPU rose 2.6% to ¥3,542 from Feb. 2025 FP, supported by rent growth and property-sale gains.

• H1 FY2026 revenue increased 1.4% YoY to ¥43.71bn and net income rose 0.7% to ¥16.10bn; portfolio occupancy was 99.2%.

• Portfolio replacement added residential, office and hotel assets; appraisal unrealized gains reached ¥283.7bn, or 26.5% of portfolio value.

• Shinjuku Nomura Building leasing progressed ahead of expectations, but vacancy is expected to weigh on distributions through Aug. 2026 FP.

Financial highlights

• Operating revenue was ¥43,710m, up ¥593m vs. Feb. 2025 FP; operating profit was ¥18,561m and net income ¥16,103m.

• Rental revenue rose ¥355m and other rental revenue ¥188m vs. Feb. 2025 FP; rental business expenses increased ¥325m, including taxes, depreciation and utilities.

• Total distributions were ¥16,457m, or ¥3,542 per unit, versus ¥16,040m and ¥3,453 per unit; payout ratio was 102.1%.

• FFO was ¥21,266m, AFFO ¥15,744m and capex ¥5,522m in Aug. 2025 FP; FFO distribution payout ratio was 77.4%.

Outlook and guidance

• Feb. 2026 FP DPU is forecast at ¥3,624, including ¥500 excess distribution; Aug. 2026 FP DPU is forecast at ¥3,606, including ¥838 excess distribution.

• Medium-term target is 8%–9% DPU growth from Feb. 2025 FP to Feb. 2028 FP, including ~5% cruising distribution growth; Feb. 2028 FP DPU target is ¥3,740–¥3,770.

• Cruising distributions are expected to bottom in Aug. 2026 FP and recover thereafter; internal reserves are planned to cushion temporary vacancy impacts.

• Forecasts assume no acquisitions or sales through Aug. 2026 and refinancing of ¥65.6bn in maturities; actual results may vary with rents, tenant turnover, repairs and market conditions.

• Planned dispositions total ¥60bn–¥90bn over three years; gains on sales are generally to be distributed across four fiscal periods.