Glp J-reit TSE:3281

GLP J REIT : Amendment of Forecasts Concerning Operating Status and Distribution for the Fiscal Periods Ending February 28, 2022 and Ending August 31, 2022

Published December 13, 2021 at 7:45 a.m. UTC

Source: MarketScreener

December 13, 2021

For Immediate Release

Real Estate Investment Trust Securities Issuer:

GLP J-REIT

Representative: Yoshiyuki Miura, Executive Director

(Security Code: 3281)

Asset Management Company:

GLP Japan Advisors Inc.

Representative: Yoshiyuki Miura, President

Contact: Shinji Yagiba, CFO

(TEL: +81-3-3289-9630)

Amendment of Forecasts Concerning Operating Status and Distribution

for the Fiscal Periods Ending February 28, 2022 and Ending August 31, 2022

GLP J-REIT announces today an amendment to its forecast for the fiscal periods ending February 28, 2022 (from September 1, 2021 to February 28, 2022) and ending August 31, 2022 (from March 1, 2022 to August 31, 2022), announced on October 13, 2021. The details are as follows.

1. Amendment of Forecasts Concerning Operating Status and Distribution

Amendment to the forecast concerning operating status and distribution for the fiscal period ending February 28, 2022


	Operating	Operating	Ordinary	Net income	Distributions	Distributions
	per unit (yen)	per unit (yen)	Optimal
	revenue	income	income
	(million	(including	(excluding	payable
	(million	(million	(million
	yen)	optimal	optimal	distributions
	yen)	yen)	yen)
		payable	payable	per unit (yen)

					distributions)	distributions)
Previous	23,332	12,347	11,025	11,023	2,748	2,454	294
forecast (A)


Amended	24,819	13,788	12,466	12,464	3,069	2,775	294
forecast (B)


Increase or
decrease	+1,486	+1,441	+1,441	+1,441	+321	+321	+0
(B－A)
Rate of
increase or	+6.4%	+11.7%	+13.1%	+13.1%	+11.7%	+13.1%	+0.0%
decrease

Amendment to the forecast concerning operating status and distribution for the fiscal period ending August 31, 2022


	Operating	Operating	Ordinary	Net income	Distributions	Distributions
	revenue	income	income	per unit (yen)	per unit (yen)	Optimal
	(million
	(million	(million	(million	(including	(excluding	payable
	yen)
	yen)	yen)	yen)	optimal	optimal	distributions

					payable	payable	per unit (yen)
					distributions)	distributions)
Previous	23,286	12,167	10,812	10,810	2,703	2,407	296
forecast (A)


Amended	24,650	13,477	12,121	12,120	2,995	2,699	296
forecast (B)


Increase or
decrease	+1,364	+1,310	+1,309	+1,309	+292	+292	+0
(B－A)
Rate of
increase or	+5.9%	+10.8%	+12.1%	+12.1%	+10.8%	+12.1%	+0.0%
decrease

(Notes)

The forecasts are calculated based on the assumptions stated in Attachment: "Assumptions Underlying the Forecasts for the Fiscal Periods Ending February 28, 2022 and August 31, 2021." The actual operating revenue, operating income, ordinary income, net income, distributions per unit and optimal payable distributions per unit may vary due to future acquisition or sale of real estate and other assets, trends in the real estate and other markets, additional issuance of new investment units, changes in other circumstances surrounding GLP J-REIT and other factors. In addition, the forecasts are not intended to guarantee the amount of distributions or optimal payable distributions.
GLP J-REIT may revise its forecasts in the event that it expects discrepancies beyond a certain level from the forecast above.
Figures are rounded down and percentages are rounded to the nearest decimal place.

2. Reasons for the Amendment

Due to the sale of asset (GLP Fukusaki) announced today in the "Sale of Asset" which generates 3,024 million yen of gain on sale, the assumptions underlying the forecasts for the fiscal periods ending February 28, 2022 and ending August 31, 2022 disclosed in the Financial Summary titled "SUMMARY OF FINANCIAL RESULTS (REIT) For the 19th Fiscal Period Ended August 31, 2021" dated October 13, 2021 have been changed and there is a 5% or more change in distribution per unit for the fiscal periods ending February 28, 2022 and ending August 31, 2022. Therefore, the forecasts for such fiscal periods have been amended at this point.

As separately announced, the fire occurred at GLP Maishima II on November 29, 2021. The fire has been extinguished as of December 4, 2021, thanks to the efforts of the firefighters who worked around the clock to extinguish the fire, as well as all other people involved. The property is insured by fire and profit insurance, but as of today, the exact extent of the damage is unknown, and it is expected to take a considerable amount of time to determine the scope of compensation and the timing of payment of insurance claims. Therefore, the impact of the fire has not been factored into the forecasts, but we will make an announcement when the details become clear and it becomes necessary to revise the forecasts.

*GLP J-REIT website address: https://www.glpjreit.com/en/

Attachment

Assumptions Underlying the Forecasts for

the Fiscal Periods Ending February 28, 2022 and Ending August 31, 2022

Item	Assumption
Calculation period	20th Fiscal Period (from September 1, 2021 to February 28, 2022) (181 days)
21st Fiscal Period (from March 1, 2022 to August 31, 2022) (184 days)

	 It is assumed that GLP J-REIT will transfer trust beneficiary interests in GLP
	Fukuzaki in two separate transactions on December 28, 2021 and March 1, 2022,
	from the trust beneficiary interests in real estate (86 properties) held by GLP J-
Portfolio	REIT as of August 31, 2021, to bring the total number of assets held by GLP J-
REIT to 85 properties, after which there will be no change in the assets under
assets
management (acquisition of new property, disposition of property held, etc.) until

	the end of August 2022. However, in reality, there is the possibility of fluctuation
	due to acquisition of new properties other than those mentioned above or disposal
	of properties.

Number of	 It is assumed to be 4,490,369 units, which is the number of investment units
outstanding
issued and outstanding as of today.
investment units

	 The outstanding of interest-bearing liabilities of GLP J-REIT is 346,520 million yen
	as of today.
	 It is assumed that the following amounts of the loans payable will be repaid with
	cash on hand or refinanced with borrowings in the 20th Fiscal Period or 21st Fiscal
	Period: 9,200 million yen with the repayment date of December 20, 2021; 980
	million yen, 850 million yen and 610 million yen with the repayment date of
Interest-bearing	January 14, 2022; 10,050 million yen and 5,000 million yen with the repayment
liabilities	date of February 28, 2022; and 300 million yen with the repayment date within the
	21st Fiscal Period.
	 It is assumed that LTV as of the end of the 20th Fiscal Period will be 44.1% (the
	estimated LTV as of October 13, 2021: 44.2%) and LTV as of the end of the 20th
	Fiscal Period will be 44.3% (the estimated LTV as of October 13, 2021: 44.4%).
	The following formula is used to compute LTV.
	LTV = (Balance of interest-bearing liabilities / Total assets) x 100 (%)

	 Due to the disposition of trust beneficiary interest in GLP Fukuzaki on December
	28, 2021 and March 1, 2022, GLP J-REIT expects to recognize gains on sales of
	property of 1,511 million yen in the 20th Fiscal Period and 1,512 million yen in the
	21st Fiscal Period, respectively.
	 We assumed no impact on operating revenue from COVID-19 pandemic because
Operating	of the absence of rent decreases related to the pandemic as of today.
revenue	 The lease of the solar panels installed on the properties employs variable rent
	calculated taking the effect of seasonal factors into consideration. We assumed
	the operating revenue from the solar panels is 424 million yen for the 20th Fiscal
	Period and 667 million yen for the 21st Fiscal Period.
	 Operating revenue is premised on the assumption that there will be no delay or
	failure in the payment of rents by lessees.

Item	Assumption
	 With respect to taxes on property and equipment (fixed asset tax, city planning
	tax and depreciable asset tax on real estate, etc. hereinafter "property-related
	taxes") held by GLP J-REIT, of the tax amounts assessed and determined, the
	amounts corresponding to the relevant accounting period are recognized as rental
	expenses. However, if property and equipment is newly acquired and adjusted
	amounts of property-related taxes for the year under the same accounting period
	(the "amounts equivalent to property-related taxes") arise between GLP J-REIT
	and the transferor, the relevant adjusted amounts are capitalized as part of the
	acquisition cost of the relevant property. Accordingly, as to four properties (GLP
	Zama, GLP Niiza, GLP Sayama Hidaka I and GLP Rokko IV) acquired in July
	2021, the corresponding property-related taxes, in the amount of 105 million yen,
	are assumed to be accounted for as expenses in the 21st Fiscal Period instead
	of the 20th Fiscal Period. The amount of property-related taxes capitalized as part
	of the acquisition cost is 98 million yen.
	 Taxes and dues are expected to be 1,821 million yen for the 20th Fiscal Period
Operating	and 1,934 million yen for the 21st Fiscal Period.
expense	 Repair and maintenance expenses are expected to be 123 million yen for the 20th
	Fiscal Period and 96 million yen for the 21st Fiscal Period.
	 Property and facility management fees are expected to be 883 million yen for the
	20th Fiscal Period and 872 million yen for the 21st Fiscal Period.
	 Depreciation is expected to be 4,412 million yen for the 20th Fiscal Period and
	4,445 million yen for the 21st Fiscal Period.
	 Of rental expenses, which are the main operating expenses, expenses (excluding
	depreciation) have been calculated based on previous actual figures and reflect
	the variable factors of expenses.
	 Please note that repair costs for each calculation period may differ significantly
	from the forecast amounts because 1) repair costs may be urgently required due
	to damage, etc. to buildings based on factors that are difficult to predict, 2) the
	amount for each fiscal period generally differs significantly, and 3) repair costs are
	not incurred periodically.
	 Depreciation, including incidental expenses and future additional capital
	expenditure, is calculated using the straight-line method.

	 NOI (the amount calculated by deducting rental expenses, excluding depreciation
Net Operating	and loss on retirement of noncurrent assets, from operating revenues excluding
Income (NOI)	gain on sales of property and equipment) is expected to be 19,562 million yen for
	the 20th Fiscal Period and 19,246 million yen for the 21st Fiscal Period.

The total amount of interest expenses on loans, interest expenses on investment corporation bonds, amortization of investment corporation bonds issuance expenses and other finance-related expenses are expected to be 1,275 million

Non-operating	yen for the 20th Fiscal Period and 1,308 million yen for the 21st Fiscal Period.
Investment corporation bonds issuance expenses are amortized monthly for the
expenses
period from issuance to redemption.

Investment unit issuance expenses are amortized monthly for three years from occurrence, and amortization expenses are expected to 45 million yen for the 20th Fiscal Period and 45 million yen for the 21st Fiscal Period.

Item	Assumption

	 This amount is calculated based on the policy on cash distributions that is
Distributions per	stipulated in the internal regulations of GLP J-REIT.
 There is a possibility that the amount of distributions per unit (excluding optimal
unit (excluding	payable distributions) will vary due to various factors such as changes in assets
optimal payable
under management, fluctuation in rental revenues owing to changes in tenants,
distributions)
unexpected repairs, fluctuation in interest rates, and the issuance of new

	investment units.
	 All of the amount of optimal payable distributions per unit for the 20th Fiscal Period
	fiscal period and 21st Fiscal Period are assumed to be the refund of its investment
	categorized as a distribution from unitholders' capital for tax purposes.
	 We intend to continuously distribute optimal payable distributions, taking into
	consideration the assumed amount of capital expenditure for each fiscal period
	based on our long-term repair plan, as a cash distribution in excess of earnings
	(a refund of investment categorized as a distribution from unitholders' capital for
	tax purposes) to the extent that it does not affect our long-term repair plan or
	adversely affect our financial condition, in an amount equal to approximately 30%
	of depreciation expense recorded in the fiscal period immediately preceding the
	fiscal period in which the distribution will be implemented. Optimal payable
	distributions per unit (continuous optimal payable distributions) is calculated in
	accordance with the policy on cash distributions in excess of earnings, which is
	provided in the Management Guidelines, the internal rules of our asset
	management company. It is calculated by assuming distributions (continuous
	optimal payable distributions) of around 30% of depreciation expected to be
	recorded in the 20th Fiscal Period, and 30% of depreciation to be recorded in the
	21st Fiscal Period, respectively.
	 Depreciation may differ from the currently assumed amount due to changes in
	assets under management, incurred amount of incidental expenses, etc. and
Optimal payable	capital expenditure, etc. There is, therefore, a possibility that the total amount of
optimal payable distributions, which is calculated based on depreciation, will
distributions
change due to various factors including those mentioned above. GLP J-REIT has
per unit
set the upper limit of optimal payable distributions at the amount obtained by

	deducting capital expenditure incurred in the calculation period when depreciation
	was recorded from the depreciation, in order to preserve the value of the assets
	held by GLP J-REIT. Accordingly, if capital expenditure is urgently required due to
	damage, etc. to buildings based on factors that are difficult to predict, there is a
	possibility that the amount of optimal payable distributions per unit (continuous
	optimal payable distributions) will decrease.
	 If the amount generated by the following formula exceeds 60%, GLP J-REIT will
	not pay out optimal payable distributions.
	Appraisal LTV (%) =A/B×100 (%)
	A = the balance of interest-bearing liabilities at the end of the fiscal period
	(including the balance of investment corporation bonds and the balance of
	short-term investment corporation bonds) + amount of security deposits
	released as of the end of the fiscal period
	B = total amount of appraisal value or investigated value of assets under
	management as of the end of the fiscal period + cash on hand as of the end of
	the fiscal period - total amount of expected distributions of earnings - total
	amount of expected optimal payable distributions
	The total amount of expected distributions of earnings and the total amount of
	expected optimal payable distributions are based on the actual amount for the
	latest fiscal period.

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