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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 twenty-third fiscal period which ended January 31, 2018.

In the twenty-third fiscal period, with the exchange rates relatively stable, 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 the stock market also increased solidly.

Within this economic environment, the rental office building market experienced continued improvement in supply-demand balance due to the ongoing demand for expansion and relocation driven by the strong employment situation, and also due to the steady lease up of tenants into new buildings. In the luxury rental housing market, occupancy rates and rent levels remained solid with the ongoing steady demand for quality housing in central Tokyo. In the real estate trading market, transaction prices continue to be high, backed by the strong investment appetite from investors at home and abroad as well as by J-REITs that were actively turning to replace their assets under management and overseas entities which successively made large transactions.

In the twenty-third 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-third fiscal period, was comprised of 11 properties under management with a total leasable area of 159,828.74m2. MHR has already invested 352,550 million yen (based on the acquisition price) into this portfolio. The occupancy rate at the end of the twenty-third fiscal period was 98.5%.
The asset management activities described above resulted in MHR recording in the twenty-third fiscal period 8,495 million yen in operating revenue, 5,287 million yen in operating income, 4,657 million yen in ordinary income and 4,655 million yen in net income and 2,659 yen in dividend per unit in the twenty-third period. 

Also, MHR acquired a part of Toranomon Hills Mori Tower (acquisition price: 5,070 million yen) and a part of Holland Hills Mori Tower (acquisition price: 2,430 million yen) additionally on March 1, 2018. 
These acquisitions are expected to enhance the portfolio size and increase dividends. As a result, MHR declared dividends per unit of 2,720 yen for the twenty-fourth fiscal period ending July 31, 2018.

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.