Japan Logistics Fund (8967) H1 2024 earnings summary

Executive summary

• Launched the “Develop the Value 2.0” growth strategy to drive DPU growth through rental increases, capital gains from property dispositions, and leveraging a high unrealized gain ratio among J-REITs.

• Owns 53 logistics properties with total assets of JPY 291.1B as of July 31, 2024, focusing on stable and sustainable growth in DPU and NAVPU.

• Achieved strong internal growth via lease renewals at higher rents and external growth through redevelopment and cooperative projects.

• Revised DPU target upward from JPY 5,600–5,700 to JPY 6,300, focusing on profit growth amid inflation and rising interest rates.

• Maintains a strong financial foundation, enabling resilience and agility in capital deployment.

Financial highlights

• Asset size: JPY 291.1B; Appraisal value: JPY 413.0B; 53 properties.

• Operating revenue for the six months ended July 31, 2024, was JPY 10,714M, up 5.6% year-over-year.

• Net income for FP 2024/7: JPY 5,320M, up 9.4% year-over-year; DPU for FP 2024/7: JPY 5,300; Forecast for FP 2025/1 and FP 2025/7: JPY 5,500.

• NAVPU: JPY 315,745; Unrealized gain: JPY 155.8B (60.6% of portfolio).

• NOI yield: 6.3%; NOI yield after depreciation: 4.8%.

Outlook and guidance

• Targeting DPU of JPY 6,300, driven by rental growth and capital gains.

• Forecasts for the six months ending January 2025: operating revenue JPY 10,752M (+0.4%), net income JPY 5,353M (+0.6%), and DPU JPY 5,500.

• Plans continued property dispositions and reinvestment to maintain or grow run-rate EPU.

• Ongoing unit buyback program up to JPY 6B (2.45% of units) from Sep–Dec 2024.

• Plans to record a JPY 605M gain on sale of Komaki Logistics Center II in the next period.