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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-fourth fiscal period which ended July 31, 2018.

In the twenty-fourth fiscal period, the Japanese economy saw continued improvements in corporate earnings as well as in the employment and income environments backed by favorable economic circumstances both domestically and abroad, while maintaining a gradual upward trend.

Within this economic environment, the vacancy rate decreased steadily and the supply-demand balance remained tight 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 remained solid and there was a steady rise in rent levels driven by the ongoing demand for quality housing in central Tokyo and an increasing sense of shortage. In the real estate trading market, transaction prices continue to be high and successive large transactions occurred in central Tokyo backed by the strong investment appetite from investors at home and abroad.

In the twenty-fourth 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-fourth fiscal period, was comprised of 11 properties under management with a total leasable area of 163,064.94m2. MHR has already invested 360,050 million yen (based on the acquisition price) into this portfolio. The occupancy rate at the end of the twenty-fourth fiscal period was 99.6%. The asset management activities described above resulted in MHR recording in the twenty-fourth fiscal period 8,751 million yen in operating revenue, 5,432 million yen in operating income, 4,820 million yen in ordinary income and 4,819 million yen in net income and 2,753 yen in dividend per unit in the twenty-fourth period.

Also, MHR issued new investment units through a Japanese public offering in August 2018. 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 2,790 yen for the twenty-fifth fiscal period ending January 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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