Heiwa Real Estate Co., Ltd. · TSE:8803
Heiwa Real Estate — Q2 FY2011 Earnings Presentation
23 slides from Heiwa Real Estate's earnings presentation, Nov 12, 2010
Slide 1: Financial Results for Second Quarter of Fiscal Year Ending March 31, 2011
HEIWA REAL ESTATE CO., LTD. Financial Results for Second Quarter of Fiscal Year Ending March 31, 2011 HEIWA REAL ESTATE CO., LTD. 2010.11.12 Security Code: 8803
Slide 2: Contents
CONTENTS Page Page Management Policy in Fiscal Year Ending March 31, Allocation of Corporate Resources in J-REIT 3 14 2011 Business Consolidated Financial Results for First Half of Fiscal Value Chain for Revenue Expansion – Real Estate 4 15 Year Ending March 31, 2011 Development Business Recovering
Slide 3: Management Policy in Fiscal Year Ending March 31, 2011
Management Policy in Fiscal Year Ending March 31, 2011 A year to solidify the foundations for growth Ensuring stable profits Restructuring the revenue base • Expanding the revenue base, in particular regarding the building leasing business • Strengthening the fee business, including asset manage
Slide 4: Consolidated Financial Results for First Half of Fiscal Year Ending March 31, 2011
Consolidated Financial Results for First Half of Fiscal Year Ending March 31, 2011 1H of FY Ended 1H of FY Ending Year-on-Year Year-on-Year (%) March 31, 2010 March 31, 2011 Operating revenue (millions of yen) 14,199 14,084 (115) (0.8) Leasing Business 9,392 9,069 (322) (3.4) Real Estate Development
Slide 5: Information by Segment – Leasing Business
Information by Segment – Leasing Business Revenue increase of 0.4 billion yen due to the launch of the operation of a new building, new tenants moving in, etc. Revenue decline of 0.7 billion yen due to the sale of a building, tenants moving out and rent reductions 1H of FY Ended 1H of FY Ending
Slide 6: Information by Segment – Real Estate Development Business
Information by Segment – Real Estate Development Business Increase in fee revenue of 0.3 billion yen through HEIWA REAL ESTATE ASSET MANAGEMENT CO., LTD. Revenue decline of 0.3 billion yen in property sales 1H of FY Ended 1H of FY Ending Year-on-Year Year-on-Year March 31, 2010 March 31, 2011 (%
Slide 7: Information by Segment – Housing Development Business
Information by Segment – Housing Development Business Percentage of contract conclusion achieved against projected sales for Fiscal Year Ending March 31, 2011: 48% (59 units against a projected 122 units) Completed inventories: 154 units (down 47 units from Fiscal Year Ended March 31, 2010) 1H o
Slide 8: Financial Conditions – Steady Reduction of Interest Bearing Debt
Financial Conditions – Steady Reduction of Interest Bearing Debt Cash Flow Operating CF: 7.0 billion yen Investment CF: -1.3 billion yen Financial CF: -16.8 billion yen (*) (*) Redemption of straight bonds (Approx. 14.7 billion yen) Net debt: Decrease of 4.9 billion yen from Fiscal Year Ended Ma
Slide 9: Downsizing of Assets – Ensuring the Reduction of Inventories, etc.
Downsizing of Assets – Ensuring the Reduction of Inventories, etc. Housing Development Housing Leasing 20.3 billion yen Inventories 50.5 billion yen Real Estate (34.5) billion yen (2.2) billion yen 0.3 billion yen Development Housing Housing 30.2 billion yen Inventories Development 15.4 billion yen
Slide 10: Overview of SPC, etc. – Real Estate Development Business
Overview of SPC*, etc. – Real Estate Development Business Status of investment in SPCs, etc. *SPC (Special Purpose Company) Liabilities Assets in operation 14.9 billion yen 23.9 billion yen (Heiwa Select Fund, Shinsaibashi SI Building, etc.) Equity investment Operating investment Equity investme
Slide 11: Leasing Business – CentRise Sakae
Leasing Business – CentRise Sakae CentRise Sakae <Property Summary> Location: 3-21 Sakae 3-chome, Naka-ku, Nagoya-city Site area: 1,920.62 m2 Total floor area: 15,662.96 m2 Architectural design and engineering: Tadao Ando Architect & Associates; Mitsubishi Jisho Sekkei Inc. Scale: 2 stories undergro
Slide 12: Leasing Business – Ichibancho Heiwa Bldg.
Leasing Business – Ichibancho Heiwa Bldg. Mitsukoshi Dai-Ichi Life Tower West 3 Exit West 2 Exit AER FORUS Ichibancho PARCO APPLE Denryoku Store Bldg. Heiwa Bldg. S-PAL II COACH ZARA SAKURANO DIOR Daiei Sendai GUCCI First Tower Station FUJISAKI LUIS GAP VUITTON The 77Bank S-PAL E Beams Ichibancho He
Slide 13: Changes in Vacancy Rates – Building Leasing
Changes in Vacancy Rates – Building Leasing Changes in vacancy rates HEIWA REAL ESTATE Tokyo Metropolitan area HEIWA REAL ESTATE all properties (%) Tokyo office m arket central five w ards (Source: CBRE – Japan) 8.0 7.0 7.5 6.0 6.0 6.0 5.0 4.4 3.9 4.0 3.3 2.9 2.9 3.0 1.8 1.8 1.8 1.9 1.7 2.0 1.4 1.
Slide 14: Allocation of Corporate Resources in J-REIT Business
Allocation of Corporate Resources in J-REIT Business Milestone toward strengthening sponsorship October 2010 Merger with CIC and Japan Single Residence REIT Inc. HEIWA REAL ESTATE AM and Japan Single Residence AM also merged Change of trade name: CIC HEIWA REAL ESTATE REIT Inc. July 2010 Change
Slide 15: Value Chain for Revenue Expansion – Real Estate Development Business
Value Chain for Revenue Expansion – Real Estate Development Business HEIWA SERVICE CO., LTD. Property HEIWA REAL ESTATE CO., LTD. acquisitio Development PM* Sale PM n Wholly-owned Dispatching Supply directors & properties employees Diverse exits HEIWA REAL ESTATE ASSET MANAGEMENT CO., LTD. Fee incom
Slide 16: Recovering Housing Development Business – Joint Condominium Sale Business
Recovering Housing Development Business – Joint Condominium Sale Business [Conceptual drawing of completed building] Name: GRANSYMPHONIA Location: Toda-city, Saitama (eight minutes walk from Toda Koen Station on the Saikyo Line) HEIWA REAL ESTATE share: 25% Total units: 923 (Construction Blo
Slide 17: Forecasted Consolidated Financial Results for Fiscal Year Ending March 31, 2011
Forecasted Consolidated Financial Results for Fiscal Year Ending March 31, 2011 FY Ending FY Ended March 31, 2011 Year-on-Year Year-on-Year (%) March 31, 2010 (Forecast) Operating revenue (millions of yen) 42,004 28,500 (13,504) (32.2) Leasing Business 18,738 18,100 (638) (3.4) Real Estate Developme
Slide 18: Forecast by Segment – Leasing Business
Forecast by Segment – Leasing Business Revenue increase of 1.0 billion yen due to the launch of the operation of a new building, new tenants moving in, etc. Revenue decline of 1.4 billion yen due to the sale of a building, tenants moving out and rent reductions Income decline of 0.4 billion ye
Slide 19: Forecast by Segment – Real Estate Development Business
Forecast by Segment – Real Estate Development Business Fee income of 0.6 billion yen through HEIWA REAL ESTATE ASSET MANAGEMENT CO., LTD. Income decline of 5.5 billion yen due to the lower number of property sales The sale of the property to be sold in the Second Half of Fiscal Year Ending March
Slide 20: Forecast by Segment – Housing Development Business
Forecast by Segment – Housing Development Business Tracking in line with plan: Sale of 75 units in the Second Half of Fiscal Year Ending March 31, 2011 (122 units in total for the full fiscal year) Completed units at end of fiscal year: 79 units, SOUTH ALL CITY (Ohtori, Sakai-city) only FY Ending
Slide 21: Key Points for Forecasted Consolidated Financial Results for Fiscal Year Ending March 31, 2011
Key Points for Forecasted Consolidated Financial Results for Fiscal Year Ending March 31, 2011 [Leasing Business] Building leasing vacancy rate at 2% levels CentRise Sakae comes into operation with full occupancy Maintenance of high occupancy rates for leased housing [Real Estate Development B
Slide 22: Dividend
Dividend Consolidated dividend payout ratio of 30% or more is targeted Planned annual dividend per share is 4 yen for the Fiscal Year ending March 31, 2011 (Interim dividend of 2 yen + year-end dividend of 2 yen) FY Ending FY Ended FY Ended FY Ended FY Ended March 31, 2011 March 31, 2007 March 3
Slide 23: Reference Material: Change in Segmentation
Reference Material: Change in Segmentation Previous segments New segments Buildings Buildings Leasing Leasing Housing Leasing Management Housing Real Estate Sales and dividends from Sale development of real estate, Development etc. Brokerage Management Housing Asset Sale Sales and dividends from Dev