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Mori Hills REIT Investment Corporation TSE Code:3234

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Message from the Management

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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 twenty-fifth fiscal period which ended January 31, 2019.

In the twenty-fifth fiscal period, the Japanese economy saw increased uncertainty about the future due to sluggish growth in exports caused by the slowdown of the global economy as well as the impact of natural disasters, but remained solid, supported by consumer spending and capital investment amid continued improvement in the employment and income environments as well as continuously high corporate earnings.

Within this economic environment, the vacancy rate in central Tokyo decreased steadily and the rent level continued to be on an upward trend in the rental office building market due to the ongoing demand for expansion and relocation driven by the strong employment situation as well as due to the steady lease up of tenants into new buildings. In the luxury rental housing market, occupancy rates and rent levels remained solid driven by the ongoing stable demand for quality housing in central Tokyo amid limited new supply. In the real estate trading market, transaction prices continue to be high backed by the strong investment appetite from investors at home and abroad and transaction amounts remained at a high level.

In the twenty-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 twenty-fifth fiscal period, was comprised of 11 properties under management with a total leasable area of 174,701.69m2. MHR has already invested 390,690 million yen (based on the acquisition price) into this portfolio. The occupancy rate at the end of the twenty-fifth fiscal period was 99.6%. The asset management activities described above resulted in MHR recording in the twenty-fifth fiscal period 9,423 million yen in operating revenue, 5,945 million yen in operating income, 5,293 million yen in ordinary income and 5,292 million yen in net income and 2,822 yen in dividend per unit in the twenty-fifth period.

Also, MHR acquired a part of Toranomon Hills Mori Tower (acquisition price: 26,070 million yen) and a part of Holland Hills Mori Tower (acquisition price: 4,570 million yen) additionally on September 3, 2018.
These acquisitions are expected to enhance the portfolio size and increase dividends. As a result, MHR declared dividends per unit of 2,830 yen for the twenty-sixth fiscal period ending July 31, 2019.

In addition, MHR will continue to seek to maximize unitholder value through further improvements in profitability and stability by progressively achieving steady internal growth with a close watch on rental market trends while actively pursuing external growth utilizing Mori Building Groups’ property pipeline.

I would like to ask for your continued support.

 

 

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