Nippon REIT Investment Corporation announced results for its 28th fiscal period. Despite higher rental income, profit declined from the previous period due mainly to lower gains on property sales. It also announced plans to acquire WORK VILLA MYJ kanda in January 2027.
Nippon REIT Investment Corporation announced results for its 28th fiscal period (fiscal year ending June 2026). The REIT issued additional investment units and acquired 7 properties, including Hotel Resol Akihabara, while selling 2 properties, including FORECAST Sakurabashi. Rental income increased, but profit declined 23.5% from the previous period due to lower gains on property sales and the recognition of a loss on the exchange of properties. The REIT allocated ¥484 million to retained earnings. The number of investment units increased 3.5%, while distribution per unit rose 3.4% from the previous period to ¥2,516.
The period-end portfolio comprised 107 properties, with total acquisition costs of ¥274.2 billion and an interest-bearing debt ratio of 48.1%. The REIT also announced that it will acquire WORK VILLA MYJ kanda in January 2027. The property is located a 1-minute walk from both Ogawamachi and Awajicho subway stations. The acquisition will comprise the sectional ownership interests in floors 3 through 13 of a 14-story set-up office building completed in February 2025. The acquisition price is ¥8.4 billion, and the sellers are Sumitomo Corporation and one other company.
In the 29th fiscal period (fiscal year ending December 2026), the REIT is expected to acquire nine hours Hakata and sell Tsukiji Front. While properties acquired in the previous period will contribute for the full period, profit is expected to decline 18.8% from the previous period due to lower gains on property sales and higher interest expenses. The REIT plans to draw down ¥75 million from retained earnings, resulting in distribution per unit of ¥2,300, a projected decline of 8.6% from the previous period. In the 30th fiscal period (fiscal year ending June 2027), the REIT plans to acquire WORK VILLA MYJ kanda. Although the decline in profit is expected to narrow to approximately 9.5% due to higher rental income, distribution per unit is expected to remain at ¥2,300.
With the trend of rising rents continuing, the REIT stated that it will continue to target earnings per unit of ¥2,250, excluding gains on property sales, through accelerated internal growth and external growth, including property replacements.