NTT UD REIT Investment (8956) H1 2025 earnings summary

Executive summary

• FP 44 revenue rose 7.2% YoY to ¥12,299m and net income increased 3.2% to ¥4,356m; DPU was ¥2,939, up ¥90 from FP 43.

• Portfolio reshaping includes ¥13.3bn of property divestments, ¥4.0bn in residential acquisitions and planned unit buybacks of up to ¥3.5bn.

• At FP 44 end, the portfolio comprised 62 properties with ¥305.3bn in assets and average occupancy of 96.3%.

Financial highlights

• FP 44 operating income was ¥4,991m, ordinary income ¥4,359m and net income ¥4,356m; operating income rose 4.7% and ordinary income 3.2% YoY.

• Rental revenue was ¥12,229m, including ¥1,200m in property-sale gains; rental income excluding sale gains and losses was ¥5,740m.

• Net income per unit was ¥2,939 versus ¥2,849 in FP 43; EPU was ¥129 above the initial FP 44 forecast, mainly from full-period contributions by acquired properties.

• Operating cash flow was ¥6,754m, investing cash flow was -¥1,739m and financing cash flow was -¥4,220m.

Outlook and guidance

• FP 45 forecast: revenue ¥13,219m, operating income ¥5,103m, ordinary income ¥4,461m, net income ¥4,460m and DPU ¥3,010.

• FP 46 forecast: revenue ¥13,362m, operating income ¥5,816m, ordinary income ¥5,123m, net income ¥5,121m and DPU ¥3,110.

• Forecast EPU is ¥2,582 in FP 45 and ¥2,629 in FP 46; FP 45 EPU is expected to fall ¥357 period on period, then recover ¥47 in FP 46.

• Renovations and property-transfer revenue losses weigh on EPU through FP 47; EPU growth is targeted from FP 48 through rent growth, capital-efficiency gains and lower post-renovation costs.