Orix Jreit Inc. · TSE:8954
Orix Jreit — FP18 Earnings Presentation
48 slides from Orix Jreit's earnings presentation, Apr 25, 2011
Slide 1: ORIX JREIT Inc. 18th Fiscal Period Results
ORIX JREIT Inc. 18th Fiscal Period Results (ended February 28, 2011) April 25, 2011 ORIX Asset Management Corporation
Slide 2: Effect of the Great East Japan Earthquake
Effect of the Great East Japan Earthquake
Slide 3: Effect of the Earthquake on OJR's Portfolio
Effect of the Earthquake on OJR’s Portfolio No casualties and no physical damage with a major effect on operations. As of the announcement date of these financial results, there have been no cancellations or notices of cancellation from tenants due to the earthquake. Out of OJR’s total 54 properties
Slide 4: Effect on Lunar Sendai
Effect on Lunar Sendai Structure and Exterior Finishings Interior Finishings, Equipment, etc. Cracking of ceiling, walls and baseboards of communal corridors Æ Repair cracked and damaged sections No damage to structure or exterior finishings Cracking of wall surfaces in internal stairways Æ Repair c
Slide 5: Effect on Ichikawa Logistics Center
Effect on Ichikawa Logistics Center Structure and Exterior Finishings Interior Finishings, Equipment, etc. Rupture of water pipe on south side of first floor No damage to structure or exterior finishings Æ Replace water pipe (repair completed) Damage to ramped entrance Æ Remove and replace ramped en
Slide 6: Effect on aune Makuhari
Effect on aune Makuhari Structure and Exterior Finishings Interior Finishings, Equipment, etc. Æ No damage to structure or exterior finishings Æ (Photographed March 23, 2011) Æ Æ
Slide 7: Executive Summary
Executive Summary
Slide 8: Executive Summary as of FP18 Account Settlement Announcement Date
Executive Summary as of FP18 Account Settlement Announcement Date External Growth Recommenced investment in residential real estate Implemented flexible/mobile acquisition of properties, keeping step with changes in the environment Continued asset replacement with the aim of improving the portfolio
Slide 9: Summary of Results for the 18th Fiscal Period
Summary of Results for the 18th Fiscal Period (Ended February 28, 2011)
Slide 10: 18th Fiscal Period: Forecast vs. Actual
18th Fiscal Period: Forecast vs. Actual Item FP18 (Feb 2011) Income-Boosting Facto s (million yen) Change (Million Yen) Forecast Actual Contribution from unforseen acquisition + 34 Operating of two properties Revenues 10,632 10,741 108 Increase in cancellation penalty received + 47 Operating Income
Slide 11: Comparison between the 17th and 18th Fiscal Periods
Comparison between the 17th and 18th Fiscal Periods Item FP17 FP18 Income-Boosting Facto s (million yen) Change (Million Yen) (Aug 2010) (Feb 2011) Full contribution of 7 properties acquired in 17th + 279 Contribution of 3 properties acquired in 18th + 154 Operating Revenues 11,701 10,741 960 Decrea
Slide 12: Forecast of Results for 19th and 20th Fiscal Periods
Forecast of Results for 19th and 20th Fiscal Periods Item FP18 FP19 Change FP20 Change (Million Yen) Feb 2011 Aug 2011 FP18 to FP19 Feb 2012 FP19 to FP20 Operating Revenues 10,741 11,160 419 10,995 164 Operating Income 4,790 4,736 53 4,733 2 Net Income 3,291 3,073 218 3,094 20 Distribution per Unit
Slide 13: Operating Conditions During the 18th Fiscal Period
Operating Conditions During the 18th Fiscal Period (Ended February 2011)
Slide 14: External Growth Strategy
External Growth Strategy
Slide 15: External Growth Trend
External Growth Trend Maintaining occupancy rates at a high level while steadily expanding the size of its assets; based on its external growth strategy taking advantage of the strengths of a diversified REIT flexible and mobile acquisition of properties and asset replacement keeping step with chang
Slide 16: Flexible, Mobile Property Acquisitions Based on Environment Changes (1)
Flexible, Mobile Property Acquisitions Based on Environment Changes (1) Office vacancy rate in Tokyo business districts (inverse scale) Source: Miki Shoji Co., Ltd. Collapse of Lehman Brothers External Continuation of investment policies growth primarily focused on offices Selective investment in st
Slide 17: Flexible, Mobile Property Acquisitions Based on Environment Changes (2)
Flexible, Mobile Property Acquisitions Based on Environment Changes (2) While continuing to focus investment on offices, OJR is endeavoring to strengthen the stability and earning capacity of the portfolio by selectively investing in real estate sectors with earning characteristics that differ from
Slide 18: New Acquisitions in and after FP18 (1) ORE Sapporo Building
New Acquisitions in and after FP18 (1) ORE Sapporo Building Located in Sapporo City’s Chuo Ward, at the heart of Hokkaido Chuo Ward in Sapporo City is the center of politics, economics, and culture in Hokkaido. It is Hokkaido’s premier business area where a large number of government offices and bra
Slide 19: New Acquisitions in and after FP18 (2) Shibaura Island Bloom Tower
New Acquisitions in and after FP18 (2) Shibaura Island Bloom Tower Shibaura Island area: with ample water and greenery Located in the Shibaura Island area, where the community is being developed jointly by government and private sectors The area combines a good living environment with convenience, f
Slide 20: New Acquisitions in and after FP18 (3) Okayama Kume Retail Facility
New Acquisitions in and after FP18 (3) Okayama Kume Retail Facility OJR’s first investment in Chugoku region Located approx. 1.7km from JR Kitanagase Station in Okayama City, an ever-growing hub in the Chugoku and Shikoku regions Faces a major arterial road running from Okayama city to Kurashiki cit
Slide 21: New Acquisitions in and after FP18 (4) Maruetsu Sagamino
New Acquisitions in and after FP18 (4) Maruetsu Sagamino Located in Sagamino area, an expanding residential area Located in a residential area around the Sotetsu line Sagamino Station, which is expanding as a dormitory town for people working in Yokohama and Tokyo The property is about a 4-minute wa
Slide 22: Improving Portfolio Quality through Asset Replacement
Improving Portfolio Quality through Asset Replacement Expanding size of assets as well as achieving improvement in quality through consistent efforts to replace assets [Portfolio Comparison] FP18 results FP1 End announc’t date (Aug. 2002) (Apr. 22, 2011) Primarily acquiring Total asset size ¥99.6 bi
Slide 23: Internal Growth Strategy
Internal Growth Strategy
Slide 24: Rent Revision Trends
Rent Revision Trends Rent Revision Status (by Floor Area) Revision-Based Rent Trends Rent increase (existing tenant) Floor area covered by lease renewals Rent increase (new tenant) Rent adjustment (monthly and new leases base) during each fiscal No change period * Figures are after deducting Rent de
Slide 25: Maintaining and Increasing Occupancy Rates
Maintaining and Increasing Occupancy Rates Occupancy Rates and Tenanted/Vacated Area Initiatives for Maintaining/Increasing Occupancy Rates ORIX Akasaka 2-chome Building About 80% of the approx. 900 tsubo vacated due to cancellation by two tenants during FP18 had been filled as of the financial resu
Slide 26: Effects of Type Diversification
Effects of Type Diversification Due to high occupancy rates and strong profitability, non-office use contributes to improving portfolio stability Portfolio Diversification (acquisition price basis, as of the end of FP18) Logistics Facilities Non-office properties Acquisition price Acquisition Price
Slide 27: Trends in Leasing NOI and Leasing NOI Yield
Trends in Leasing NOI and Leasing NOI Yield Leasing NOI yield, all Leasing NOI yield of the 25 Leasing NOI yield of newly properties properties continuously held from acquired properties in the initial Leasing NOI, all FP6 end (Feb. 2005) through the fiscal period of acquisition, properties financia
Slide 28: Financial Position
Financial Position
Slide 29: Financial Position (Slide 1 of 2)
Financial Position (Slide 1 of 2) Outstanding Interest-Bearing Debt, Loan-to-Value Ratio Composition of Interest- Investment bearing Debt as of Apr. Corporation 17th End 18th End Apr. 22, 2011 22, 2011 Bond Outstanding Interest- (billion yen) 27.0 bearing Debt (¥ million) 144,868 158,543 158,480 (17
Slide 30: Financial Position (Slide 2 of 2)
Financial Position (Slide 2 of 2) Credit Ratings S&P Long-term rating: A-, Short-term rating: A-2 Outlook: Stable R&I Issuer rating: A+ Rating outlook: Stable JCR Long-term senior debt rating: AA- Rating outlook: Stable * Newly acquired during FP18 Commitment Line Commitment line of debt set at ¥20.
Slide 31: Overview of Appraisal Value and Investment Units
Overview of Appraisal Value and Investment Units
Slide 32: Appraisal Value
Appraisal Value (bllion yen) 50 40 30 20 (billion yen) 10 0 -10 -20 Note 1: Unrealized gain/loss is calculated by subtracting the book value from the appraisal value (both as of the end of the fiscal period). Note 2: Unrealized gain/loss ratio is calculated by dividing the unrealized gain/loss by th
Slide 33: Investment Units
Investment Units FP17 FP18 Change Unitholder Share Share Share Individuals, etc. Finance Securities Categories Units Units Units % % % Other Corp. Overseas Individuals, etc. 45,323 18.0 42,793 17.0 -2,530 -5.6 Finance 133,163 52.9 128,600 51.1 -4,563 -3.4 1.3% 2.8% Major Banks 5,283 2.1 5,554 2.2 27
Slide 34: Appendix
Appendix
Slide 35: Changes to Portfolio Building Policy
Changes to Portfolio Building Policy Portfolio construction policy has been changed. It is to increase the scope for a diversification of property use, which is the strength of a diversified JREIT, and to establish a business structure that can make flexible and mobile acquisition of real estate for
Slide 36: Investment Policy for Each Sector
Investment Policy for Each Sector Investment and Management Policy Sector Area Size Main investment targets and focus of investment and management Greater Tokyo: * Primarily focusing on Greater Tokyo area, newly built, medium (Note 1) or large size ¥5 billion Offices 80% or more * As for offices in
Slide 37: Capitalize on Synergies with the ORIX Group
Capitalize on Synergies with the ORIX Group History of ORIX Group’s Real Estate Business Balance of Leased Real Estate Assets in Real Estate Segment (billion yen) Business network/expertise cultivated in financial business Office 367.3 Office Logistics Retail Residential Logistics 53.5 1985 1986: Do
Slide 38: Financial Highlights
Financial Highlights FP14 FP15 FP16 FP17 FP18 Millions of yen Feb 2009 Aug 2009 Feb 2010 Aug 2010 Feb 2011 Operating Revenues 10,522 11,465 9,790 11,701 10,741 Operating Income 5,039 5,838 4,502 5,887 4,790 Net Income 4,016 4,761 3,344 4,308 3,291 Unitholders' Capital 137,814 137,814 137,814 137,814
Slide 39: Appraisal Value: Comparison with the 17th Fiscal Period (Slide 1 of 2)
Appraisal Value: Comparison with the 17th Fiscal Period (Slide 1 of 2) Appraisal value of properties at the end of the 18th fiscal period (1) Area symbol: 6 Central Tokyo Wards Remaining Tokyo Wards Other Parts of the Greater Tokyo Area Other Areas End of the 18th Fiscal Period Change from the 17th
Slide 40: Appraisal Value: Comparison with the 17th Fiscal Period (Slide 2 of 2)
Appraisal Value: Comparison with the 17th Fiscal Period (Slide 2 of 2) Appraisal value of properties at the end of the 18th fiscal period (2) End of the 18th Fiscal Period Change from the 17th Period Type Area Property Book value Appraisal CR Gain/loss Change % Change CR Change Chg gain/Loss \millio
Slide 41: Portfolio Summary
Portfolio Summary List of all real estate held by ORIX JREIT as of April 22, 2011 Acquisition Acquisition GFA Price Ratio GFA Price Ratio Ty pe Area Nam e of building Address ( ) Year Built (JPY m n) (%) Ty pe Area Name of building Address ( ) Year Built (JPY m n) (%) Aoyama Suncrest Bldg. Minato-ku
Slide 42: Portfolio Map
Portfolio Map C / uO Cone Cet See Shinjuku ward Md JR Sobu Une: ORIX Suidcbasty Bustiag “ econ Stryte 5-chome Mborbawy (ae Osmeg Bround.Cooms Nat Stings ¢ CFI Anat Exuale Nats Stops Dhaeong @t “bry assegdnectnaes th ° ‘ ound Cree Sriridas ‘eg Foust ate hiyods ward DT Geen © OFX Anasaka 2thome Buteit
Slide 43: Portfolio Data (Slide 1 of 2)
Portfolio Data (Slide 1 of 2) Average Sales/Acquisition Price after IPO Property Size (Floor area) Under 3,000 m2 Under 3,000 m2 8.2% 7.07 13.6% Over 15,000 m2 Over 15,000 m2 Billion yen 40.3% 30.3% Average Average 15,734 24,822 3,000 m2 to 3.12 15,000 m2 3,000 m2 to Billion yen 46.0% 15,000 m2 61.5
Slide 44: Portfolio Data (Slide 2 of 2)
Portfolio Data (Slide 2 of 2) Area Type Other Area Others Residential Others 2.1% Other Area properties 4.9% Residential 15.1% Retail 2.2% Other Parts of the 16.7% properties Greater Tokyo Area facilities 6.8% 17.3% Other Parts of the 6 Central 4.1% Logistics 6 Central Tokyo Greater Tokyo Area Tokyo
Slide 45: Major Tenants
Major Tenants Top 10 Tenants as of 18th Period End (Reference) As of 17th Period End Share of Total Share of Total Rented Space Rented Space Name of Tenant Sector Property Name Rented Space Name of Tenant Rented Space ( ) ( ) NIPPON EXPRESS Sakai Logistics Center NIPPON EXPRESS 1 Transportation 64,0
Slide 46: Cash Management
Cash Management FP14 FP15 FP16 FP17 FP18 (Million yen) Feb 2009 Aug 2009 Feb 2010 Aug 2010 Aug 2010 Depreciation 1,874 1,910 1,896 2,069 2,171 Repair and Maintenance Costs 112 124 91 159 91 CAPEX 69 272 82 78 54 Cash and Cash Equivalents 22,016 8,444 27,558 12,251 16,717 Depreciation/CAPEX/Cash Bala
Slide 47: This document provides supplementary information intended to be helpful in understanding the financial situation,
This document provides supplementary information intended to be helpful in understanding the financial situation, and was prepared and released solely with the intent of providing information. This document should not be construed as an offer or solicitation to buy or sell any specific product, incl
Slide 48: Asset Management Company: ORIX Asset Management Corporation
When an investor accepts solicitation for subscription or buys or sells OJR’s investment units/investment securities, the investor may be required to pay fees set by the securities dealer in addition to the actual price of the investment units or investment securities (for instance, brokerage commis