IR Presentation
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For the Fiscal Period Ended October 31, 2019 (10th Fiscal Period) IR Presentation Securities Code: 3451 Contents 3 Overview of Financial Results 23 In and After the 11th Fiscal Period ⚫ Overview of the 10th Fiscal Period ⚫ Earnings Forecast for the 11th and 12th Fiscal Periods ⚫ Cash Distribution per Unit ⚫ Theme of Activities and Measures In and After the 11th Fiscal Period 6 Operating Results ⚫ Increase in Cash Distribution ⚫ Occupancy Rate ⚫ ESG ― Environment ⚫ Rent Status ― New Contracts and Cancellations ⚫ ESG ― Social ⚫ Rent Status ― Rent Revision ⚫ ESG ― Governance ⚫ Leasing Status 30 Appendix ⚫ Initiatives for Maintaining and Enhancing Asset Value ⚫ Appraisal Value at End of 10th Fiscal Period ⚫ Unitholder Composition (at End of 10th Fiscal Period) ⚫ Status of Unrealized Gains (at End of 10th Fiscal Period) ⚫ IR Activities ⚫ Balance Sheet 14 5th Public Offering ⚫ Statement of Income ⚫ Summary of 5th Public Offering ⚫ Portfolio List (49 properties) ⚫ Overview of Acquired Properties ⚫ Distribution of Tenants ⚫ Case Example of Newly Acquired Properties (at End of 10th Fiscal Period/After Public Offering) ⚫ Changes in Portfolio ⚫ Earnings Performance of Properties (1) ― (5) (at End of 10th Fiscal Period) ⚫ Main Portfolio Indicators ⚫ List of Properties (1 ) ― ( 5) 20 Financial Status ⚫ Profile of Tosei Reit ⚫ New Borrowings and Refinancing ⚫ Profile of Tosei Asset Advisors, Inc. ⚫ Financial Management ⚫ Disclaimer Earnings Announcement for 10th Fiscal Period 2 Overview of Financial Results Overview of the 10th Fiscal Period Results for the 10th Fiscal Period Property-Related Operating Revenue ◼ (¥ MM) ◼ (Comparison with Forecast) (¥ MM) 10th FP 10th FP (Ended October 2019) (Ended October 2019) 9th FP Forecast (Ended Compared Forecast Announced Actual Announced Actual April 30, 2019) with Differences June 14, Result June 14, Result Forecast 2019 2019 Property-related operating revenue Days in operation 181 184 184 – 2,475.9 2,510.9 34.9 Rent, common service income, 2,232.3 2,266.3 34.0 Operating revenue 2,748 2,475 2,510 +1.4% facility income Offices 1,130.9 1,142.9 12.0 Operating income 1,490 1,187 1,241 +4.6% Retail facilities 241.2 243.4 2.1 Ordinary income 1,273 960 1,019 +6.1% Residential properties 860.1 880.0 19.8 Net income 1,229 959 1,014 +5.7% Utilities revenue 202.7 197.2 -5.4 Cash distribution per unit Other operating revenue 4,052 3,480 3,675 +5.6% (¥) (construction to restore properties to original 40.9 47.2 6.3 state, renewal fees, cancellation penalties, etc.) Total assets 62,514 – 62,400 – ◼ Property-Related Operating Expenses (Comparison with Forecast) (¥ MM) ◼ Main Factors of Changes in Net Income (compared with initial forecast) 10th FP (Ended October 2019) (¥ MM) Forecast Actual Announced Actual 1,050 Differences result June 14, Result +21.7 1,014 2019 +34.9 1,000 Initial -1.7 forecast Property-related operating expenses 1,070.9 1,049.2 -21.7 959 Decrease in PMBM fees 227.6 232.0 4.4 950 property- related Utilities expenses 215.3 203.7 -11.5 Other Increase in operating property- expenses Repair and maintenance expenses 92.2 87.9 -4.2 900 related operating revenue Property taxes 176.4 176.3 -0.1 850 Other (advertising expenses, etc.) 71.4 56.5 -14.9 Depreciation 287.8 292.6 4.7 800 分類 1 分類 2 分類 3 分類 4 分類 5 Earnings Announcement for 10th Fiscal Period 4 Cash Distribution per Unit ⚫ Actual result for the 10th Fiscal Period was ¥3,675 per unit, +¥195 (+5.6%) from the most recent forecast ⚫ Distribution of ¥90 per unit from reversal of capital gain internally reserved in the 9th Fiscal Period Cash distribution per unit Initial forecast (Note) (¥) Actual result 4,500 4,052 4,000 Capital gain, etc. 3,480 3,675 Reversal 3,592 3,532 of internal 3,435 ¥ 534 (Note) reserve 3,371 3,382 3,500 3,263 3,208 3,256 3,259 3,202 3,252 ¥ 90 3,063 2,986 3,000 2,772 2,844 2,500 1,938 2,000 1,500 1,000 500 373 0 2015年4月期 2015年10月期 2016年4月期 2016年10月期 2017年4月期 2017年10月期 2018年4月期 2018年10月期 2019年4月期 2019年10月期 1st FP Results 2nd FP Results 3rd FP Results 4th FP Results 5th FP Results 6th FP Results 7th FP Results 8th FP Results 9th FP Results 10th FP Results (Ended(実績) April 2015) (Ended(実績) October 2015) (Ended(実績) April 2016) (Ended(実績) October 2016) (Ended(実績) April 2017) (Ended(実績) October 2017) (Ended(実績) April 2018) (Ended(実績) October 2018) (Ended(実績) April 2019) (Ended(実績) October 2019) (第1期) (第2期) (第3期) (第4期) (第5期) (第6期) (第7期) (第8期) (第9期) (第10期) IPO 1st PO 2nd PO 3rd PO 4th PO 1 property 1 property 12 properties 5 properties 5 properties 8 properties 6 properties ¥1.4 BN ¥1 BN ¥17.4 BN ¥11.9 BN ¥5.3 BN ¥9.8 BN ¥10.2 BN Note: The figure announced first is listed as the initial forecast. However, the initial forecast for the fiscal period ended October 31, 2019 (10th Fiscal Period) was released on June 14, 2019. Earnings Announcement for 10th Fiscal Period 5 Operating Results Occupancy Rate ⚫ For the entire portfolio, the occupancy rate stood at 97.9% at the end of the 10th Fiscal Period, down 0.1% from the end of the previous fiscal period. The occupancy rates of residential properties and retail facilities improved, while that of offices dropped to 99.1% due to cancellation by some tenants at Higashitotsuka West Building, etc. ◼ Occupancy Rate (Note) 1st FP 2nd FP 3rd FP 4th FP 5th FP 6th FP 7th FP 8th FP 9th FP 10th FP (%) 100 95 90 April October April October April October April October April October 2015 2015 2016 2016 2017 2017 2018 2018 2019 2019 1st FP End 2nd FP End 3rd FP End 4th FP End 5th FP End 6th FP End 7th FP End 8th FP End 9th FP End 10th FP End (Actual results) (Actual results) (Actual results) (Actual results) (Actual results) (Actual results) (Actual results) (Actual results) (Actual results) (Actual results) Total 96.2% 97.5% 96.5% 98.1% 98.4% 98.4% 98.2% 98.2% 98.0% 97.9% Offices 97.4% 99.3% 98.4% 99.3% 98.8 % 99.1% 99.1% 99.5% 99.5% 99.1% Retail facilities 100.0% 100.0% 100.0% 100.0% 100.0 % 100.0% 99.7% 98.2% 97.4% 97.7% Residential properties 93.9% 95.1% 92.4% 95.5% 97.0% 96.7% 97.0% 97.1% 96.7% 96.9% Note: The occupancy rate is the ratio of leased area to leasable area. Earnings Announcement for 10th Fiscal Period 7 Rent Status ― New Contracts and Cancellations ⚫ In the 10th Fiscal Period, newly contracted monthly rent totaled ¥20.4 MM, while cancellations totaled -¥18.9 MM, resulting in a difference in monthly rent of +¥1.5 MM. ⚫ Rent increased for KM Shinjuku Building (+12.8%), Nihonbashi-Hamacho Building (+36.3%), Shin Yokohama Center Building (+18.8%), etc. in line with tenant replacement ⚫ “Newly contracted monthly rent-Cancelled monthly rent” has remained positive since the 4th Fiscal Period. ◼ Increase/Decrease in Newly Contracted/Cancelled Monthly ◼ Newly Contracted/Cancelled Monthly Rents Rents for the 10th Fiscal Period (¥ MM) New rent Cancelled rent Increase/Decrease 30.0 Number of Rent Number of Rent Number of Rent contracts (¥ MM) contracts (¥ MM) contracts (¥ MM) 21.3 20.4 20.0 18.3 KM Shinjuku Building 1 2.03 1 1.80 - 0.23 12.4 Nihonbashi-Hamacho Building 1 3.43 1 2.52 - 0.92 9.3 9.5 10.5 10.0 7.2 7.3 Kannai Tosei Building II 2 0.66 2 0.57 - 0.09 3.0 2.2 2.3 2.6 2.1 0.7 0.5 0.2 1.5 Shin Yokohama Center 1 0.53 2 0.61 -1 -0.09 -1.3 -1.1 Building 0.0 Chojamachi Duo Building 1 1.17 1 0.42 - 0.75 -4.3 -0.69 -5.0 Higashitotsuka West Building 1 0.53 1 1.22 - -7.1 (Note) -10.0 -8.4 -8.8 -10.0 Offices total 7 8.36 8 7.14 -1 1.21 -12.2 -15.7 Inage Kaigan Building 1 0.36 0 0.0 1 0.36 -20.0 -19.1 -18.9 Wako Building 0 0.0 1 0.22 -1 -0.22 Retail facilities total 1 0.36 1 0.22 - 0.13 -30.0 1st FP 3rd FP 5th FP 7th FP 9th FP (Ended April 2015) (Ended April 2016) (Ended April 2017) (Ended April 2018) (Ended April 2019) Residential properties total 123 11.74 127 11.56 -4 0.18 2nd FP 4th FP 6th FP 8th FP 10th FP (Ended October 2015) (Ended October 2016) (Ended October 2017) (Ended October 2018) (Ended October 2019) Total 131 20.45 136 18.93 -5 1.52 Newly contracted rent Cancelled contracted rent Difference Note: Newly contracted area is 176.4 m2 and cancelled area is 538.58 m2. Earnings Announcement for 10th Fiscal Period 8 Rent Status ― Rent Revision ⚫ Of the 274 renewals (offices: 32, retail facilities: 7, residential properties: 235) in the 10th Fiscal Period, rents were increased for 97. No renewals with decreased rent. Rent increase rate was at 4.0% on average. ⚫ Rent increase rate by asset type: Offices 5.4%, retail facilities 1.1%, residential properties 3.2%) ◼ Status of Rent Revision (leased area basis) ◼ Change in Upward Rent Revisions (number of cases of increases and rate of increase) Contracts up for renewal: 358 Contracts up for renewal: 274 (%) (cases) Rate of increase (left axis) Renewal rate: 90% Renewal rate: 90% 8.0 133 140 130 26.0% 29.0% Number of increases (right axis) 120 (133) (97) 110 97 5.0 100 90 9th FP 10th FP 75 4.0 80 (Ended April 2019) (Ended October 2019) 3.8 4.0 4.0 3.6 70 Renewed 323 Renewed 246 3.4 3.0 3.8 60 Total 28,300.55 m² Total 19,684.29 m² 52 2.1 50 37 40 25 27 25 30 14 20 74.0% 9 1.6 10 (190) 71.0% 0.0 0 (149) 20151st FP年 2015年 20163rd FP年 2016年 20175th FP年 2017年 20187th FP年 2018年 20199th FP年 2019年 Rent increase Rent decrease No change (Ended4 April月期 2015) 10月期 (Ended4 月期April 2016) 10月期 (Ended4 月期April 2017) 10月期 (Ended4月期 April 2018) 10月期 (Ended4月期 April 2019) 10月期 (第1期) (第2nd2 FP期) (第3期) (第4th4 FP期) (第5期) (第6th6 FP期) (第7期) (第8th8 期)FP (第9期) (第10th10 期)FP (Ended October 2015) (Ended October 2016) (Ended October 2017) (Ended October 2018) (Ended October 2019) ◼ Breakdown of upward rent revisions (by asset type) 1st FP 2nd FP 3rd FP 4th FP 5th FP 6th