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Message from the Management

Message from the Management

Executive Director Hideyuki Isobe

Hideyuki Isobe
Executive Director,
Mori Hills REIT
Investment Corporation

All of us at Mori Hills REIT Investment Corporation ("MHR") wish to extend our deep appreciation to our unitholders for your continuous support of MHR. I am pleased to report on MHR’s performance for the thirty-fifth fiscal period which ended January 31, 2024.

In the thirty-fifth fiscal period, although weakness was seen in consumer spending and capital investment due to the ongoing impact of price hikes and labor shortages, the Japanese economy remained strong, underpinned by the increase in exports and inbound demand.

Under such an economic environment, in the rental office market, demand remained strong against the backdrop of the steady employment situation, and vacancy rates are gradually improving but have yet to fully recover, and rent levels maintained their sluggish conditions. As for the luxury rental housing market, occupancy rates and rent levels remained solid driven by ongoing stable demand for quality housing in central Tokyo. In terms of the real estate trading market, although property acquisition activities by foreign companies remained stagnant, the transaction amount remained at a high level thanks to large transactions by corporations and developers. Transaction prices also remained at a high level.

In the thirty-fifth fiscal period, MHR strove to maintain and enhance tenant satisfaction through measures such as efficient and systematic operational management and maintenance and repair of properties in its portfolio by better understanding tenant needs. Moreover, MHR maintained and enhanced occupancy rates and rents by proactively launching leasing activities targeting new and existing tenants while foreseeing trends in rental market conditions. 

MHR’s real estate portfolio, as of the end of the thirty-fifth fiscal period, was comprised of 11 properties under management with a total leasable area of 180,797.12m2. MHR has already invested 404,670 million yen (based on the acquisition price) into this portfolio. The occupancy rate at the end of the thirty-fifth fiscal period was 97.2%.

The asset management activities described above resulted in MHR recording in the thirty-fifth fiscal period 11,176 million yen in operating revenue, 6,803 million yen in operating income, 6,291 million yen in ordinary income and 6,289 million yen in net income and 3,282 yen in dividend per unit. MHR disposed of a part of Laforet Harajuku (Land) (disposition price: 2,926 million yen) on December 1, 2023. A 1,373 million yen was realized on the disposition, all of the gain on will be distributed.

In addition, MHR plans to dispose of a further part of Laforet Harajuku (Land) (disposition price: 2,968 million yen) on July 1, 2024. For the thirty-sixth fiscal period ending July 31, 2024, dividends per unit is expected to be 3,070 yen. 

MHR will continue to seek maximization of unitholder value by maintaining and increasing dividends continuously while retaining stability of earnings through fixed-rent master leases alongside actively pursuing external growth utilizing the property pipeline of Mori Building Group. 

I would like to ask for your continued support.