Japan Excellent (8987) H1 2025 earnings summary

Executive summary

• Achieved stable growth as a Tokyo-focused office REIT with 33 properties and asset size of ¥279.4 billion as of end-2024, maintaining high occupancy and stable rental income.

• Operating revenue for FY2024/12 was ¥12,752 million, up 11.3% year-over-year, while net income was ¥3,742 million, down 10.9% due to property sale losses.

• Strategic asset replacement improved portfolio quality, reduced average building age, and enhanced profitability and tenant diversification.

• ESG initiatives advanced, with 88.3% of portfolio certified green and 10 consecutive years of GRESB Green Star.

• Disposed of several properties and acquired Ark Hills Front Tower to improve portfolio quality and financial strength.

Financial highlights

• Operating revenue was ¥12,752 million (+11.3% YoY); rental income was ¥10,012 million (+¥99 million YoY).

• Net income was ¥3,742 million (−10.9% YoY), mainly due to a one-time property sale loss of ¥1,614 million.

• Operating profit was ¥4,483 million (−7.3% YoY); DPU was ¥2,770, with a payout ratio of 97.8%.

• NAV per unit increased to ¥168,106, up ¥905 from previous period.

• Total assets at period-end were ¥295,338 million; equity ratio was 50.5%.

Outlook and guidance

• FY2025/6 revenue forecast is ¥11,360 million, with net income expected to rise to ¥4,316 million and DPU to increase to ¥3,000.

• FY2025/12 DPU is projected at ¥2,800, with rental income growth offset by lower property sale gains.

• Guidance incorporates planned asset sales (JEI Hongo, JEI Hamamatsucho) and acquisition (Ark Hills Front Tower).

• Occupancy is expected to remain high, with average rates of 99.0% (2025/6) and 98.2% (2025/12).

• Assumes stable office leasing demand but notes potential macroeconomic and geopolitical risks.