Ichigo Office REIT Semi-Annual Report
40thFiscal Period
May 1, 2025 - October 31, 2025
Ichigo Office REIT Investment Corporation (8975)
Marunouchi Park Building 20F, 2-6-1 Marunouchi, Chiyoda-ku, Tokyo 100-6920
Message from ManagementWe extend our gratitude to all Ichigo Office shareholders for your trust.
As always, Ichigo Office continuously worked to drive shareholder value by executing various measures during the October 2025 period.
We sold the Ichigo Toyamaeki Nishi Building (sale price 2,720 million yen) at a price significantly higher than book value and appraisal value, and the proceeds will be secured for future growth investments. We will retain 101 million yen of the gain on sales (1,100 million yen) as retained earnings in compliance with J-REIT conduit rules and distribute the remaining amount to our shareholders. In an aim to maximize shareholder value, we executed a share buyback, and acquired 16,969 shares (1.1% of shares outstanding). We subsequently cancelled the shares acquired by the end of the period.
By utilizing the proceeds from the committed loan agreement used to fund value-add capex (first among J-REITs), we deployed various value-add capex activities, such as Ready-to-Move-In Office formats and renovations of common areas to selected portfolio assets, and as a result, achieved strong rent growth and was able to increase the NOI by 80 million yen vs. the initial forecast. We also focused on sustainability initiatives, newly acquiring an S (highest) rank CASBEE environmental certifications for the Ichigo Akihabara North Building and Ichigo Nishisando Building (Buildings A & B), increasing the ratio of certified assets to 38.6% of our total leasable area.
As a result of such activities, Ichigo Office's October 2025 earnings were: operating revenue of 9,271 million yen, operating profit of 5,070 million yen, recurring profit of 4,172 million yen, and net income of 4,171 million yen. The dividend per share was 2,715 yen, a 723 yen (36.3%) increase from our forecast at period-start. The value of our assets has also increased, as our NAV per share at period-end was 106,287 yen, a record high.
For the upcoming April 2026 period, Ichigo Office has already announced the sale of the Ichigo Mirai Shinkin Building and the acquisition of the Ichigo Tachikawa Koen Dori Building, which are measures to maximize shareholder value. We will continue to deploy various value-add measures to our assets to drive rent growth and increase the NOI.
Ichigo Office commits to build a robust mid-size office portfolio and promote its ESG activities with the aim to drive sustainable growth and maximize shareholder value.
Thank you so much for your prolonged support.
Takafumi Kagiyama, Executive Director Ichigo Office REIT Investment Corporation
Asset Management Overview
36th Fiscal Period 37th Fiscal Period 38th Fiscal Period 39th Fiscal Period 40th Fiscal Period From May 1, 2023 From November 1, From May 1, 2024 From November 1, From May 1, 2025
to October 31, 2023 to April 30,
2023 2024
to October 31,
2024
2024 to April 30, to October 31,
2025
2025
Historical Investment Performance
Operating Revenue
million yen
7,914
8,068
9,223
10,235
9,271
(Real Estate Rental Income)
Operating Expenses (Real Estate Rental Expenses)
Operating Profit Recurring Profit Net Income Total Assets
(Period-on-Period Change)
Net Assets
(Period-on-Period Change) Shareholders' Equity
Number of Shares Outstanding
Net Assets per Share Total Dividends Dividend per Share
(Profit Distributions per Share)
(Distributions in Excess of Earnings per Share)
Ratio of Recurring Profit to (Note 1) Total Assets
Return on Equity (Note 1) Shareholder Equity Ratio (Note 1) (Period-on-Period Change)
Dividend Payout Ratio (Note 2) Other Reference Information
Number of Assets
Number of Tenants at End of Period
Total Leasable Area Occupancy at End of Period Depreciation
Capital Expenditure
NOI (Net Operating Income) (Note 1)
FFO (Funds from (Note 1) Operations) per Share
Number of Days in the Period
million yen
(7,807)
(7,761)
(8,171)
(8,222)
(8,177)
million yen
4,000
3,973
4,231
4,140
4,201
million yen
(3,131)
(3,160)
(3,373)
(3,366)
(3,369)
million yen
3,914
4,094
4,991
6,094
5,070
million yen
3,096
3,323
4,082
5,174
4,172
million yen
3,095
3,323
4,081
5,173
4,171
million yen
231,001
231,225
244,755
246,076
244,360
%
(-2.1)
(0.1)
(5.9)
(0.5)
(-0.7)
million yen
101,999
102,122
106,375
107,363
104,777
%
(-3.1)
(0.1)
(4.2)
(0.9)
(-2.4)
million yen
67,675
67,675
71,175
71,175
71,175
shares
1,513,367
1,513,367
1,554,934
1,554,934
1,537,965
yen
67,399
67,479
68,411
69,046
68,127
million yen
3,200
3,327
4,185
5,177
4,175
yen
2,115
2,199
2,692
3,330
2,715
yen
(2,115)
(2,199)
(2,692)
(3,330)
(2,715)
yen
(-)
(-)
(-)
(-)
(-)
%
1.3(2.6)
1.4(2.9)
1.7(3.4)
2.1(4.3)
1.7(3.4)
%
3.0(5.9)
3.3(6.5)
3.9(7.8)
4.8(9.8)
3.9(7.8)
%
44.2
44.2
43.5
43.6
42.9
%
(-0.5)
(0.0)
(-0.7)
(0.2)
(-0.8)
%
103.4
100.1
102.5
100.0
100.0
assets
88
87
92
87
86
tenants
1,008
1,006
1,071
1,025
1,026
m2
269,114.17
266,944.42
278,292.10
265,842.94
257,311.24
%
96.8
96.6
95.7
96.2
97.5
million yen
971
982
980
993
981
thousand yen
775,081
1,039,299
948,289
1,395,841
1,428,105
million yen
5,648
5,583
5,778
5,849
5,789
yen
2,617
2,643
2,579
2,671
2,639
days
184
182
184
181
184
(Note 1) The indicators stated are calculated using the formulas below. Figures in parentheses are annualized values.
Ratio of Recurring Profit to
Total Assets
Recurring Profit / (Total Assets at Beginning of Period + Total Assets at End of Period) ÷ 2
Return on Equity
Net Income / (Net Assets at Beginning of Period + Net Assets at End of Period) ÷ 2
Shareholder Equity Ratio
Net Assets at End of Period / Total Assets at End of Period
NOI
Real Estate Rental Income - Real Estate Rental Expenses + Depreciation
FFO per Share
(Net Income + Depreciation + Loss on Retirement of Non-Current Assets + Expenses for Asset Retirement
Obligations ± Losses (Gains) on Sales of Assets ± Extraordinary Losses (Profits)) / Number of Shares Outstanding
(Note 2) Dividend Payout Ratio is calculated using the formula below and rounded down to the nearest unit: Dividend per Share (excluding distributions in excess of earnings per share) / Net Income per Share
However, as new shares were issued during the 38th fiscal period, and a share buyback and cancellation was conducted during the 40th fiscal period, the calculation for these periods are based on the following method.
Total dividends (excluding distributions in excess of earnings per share) / Net income
Summary of Operating Results for the Fiscal Period Ended October 31, 2025
Overview
In the fiscal period ended October 31, 2025, Ichigo Office's 40th fiscal period, Ichigo Office executed a share buyback in June 2025 using proceeds from asset sales conducted in the April 2025 fiscal period. As a result, Ichigo Office bought back a total of 16,969 shares during the October 2025 fiscal period (equivalent to 1.1% of the shares outstanding prior to cancellation) and subsequently completed the cancellation of these shares.
In October 2025, Ichigo Office sold an office building located in Toyama City, Toyama Prefecture, at 2.0x its book value and 1.5x its appraisal value. Ichigo Office had been exploring options to sell this asset because value-add potential was limited, despite its high earnings stability from the residential sections comprising c. 56% of the building's leasable area leased via a master lease agreement. Ichigo Office decided to sell the asset, for the purchase offer was extremely attractive despite the property being located in a regional city.
In addition to the share buyback and distribution of gains on asset sales, Ichigo Office decided to acquire a mid-size office building located in Tachikawa City, Tokyo, and entered into a purchase agreement in October 2025. The transaction was completed in December 2025.
Furthermore, in October 2025, Ichigo Office drew down funds from a committed JPY 1 billion loan agreement, executed in November 2024 (a first among J-REITs). The proceeds are used exclusively for value-add capex. By maximizing the use of these funds, Ichigo Office will continue to actively and flexibly invest in its assets via value-add capex, further accelerating value creation through such initiatives.
Going forward, Ichigo Office will continue to build a portfolio focused on mid-size offices, which offers both stable income and earnings growth.
(Note) "Value-add capex" is capital expenditure that enhances the competitiveness and profitability of Ichigo Office assets.
Market Environment and Investment Performance
Market Environment
In the commercial real estate investment market, while the Bank of Japan's moves toward normalizing its monetary policy is raising concern over transaction yields, these concerns are being offset by expectations for higher rental income due to inflation. As a result, there has been no significant increase in transaction yields, with transaction prices remaining at high levels and transaction volume continuing to be strong. In the mid-size office building market, expectations for rental income growth and supply constraints caused by rising construction costs are supporting the market. Yields continue to remain low, and transaction prices are staying firm. Furthermore, while investment opportunities in central Tokyo have become increasingly limited due to soaring prices, interest in investment in regional cities is also rising, driven by diversifying work styles. As a result, real estate prices in major regional cities remain high. Additionally, with global attention on environmental and social issues on the rise, ESG considerations are accelerating in the real estate sector and are becoming key factors in investment decisions. Against this backdrop of ongoing changes in the market environment, Ichigo Office will continue to strategically select and consider investments in mid-size office buildings that are expected to generate stable earnings over the long term.
Investment Performance
During the October 2025 fiscal period, Ichigo Office focused on improving its portfolio NOI, and continued to implement value-add capex to enhance the profitability of individual assets while taking factors such as rent levels and occupancy into account. Furthermore, Ichigo Office continued to provide various services tailored to tenant needs. As a result, occupancy was stable, closing the October 2025 fiscal period at 97.5%, a rate that significantly exceeded the occupancy at the end of the April 2025 fiscal period. Notably, Ichigo Office achieved high investment returns from its value-add capex. This was achieved by fully utilizing funds raised through investment corporation bonds allocated to its sponsor Ichigo Inc. in November 2023, as well as funds secured through its committed term loan agreement with Sumitomo Mitsui Banking Corporation in November 2024.
Ichigo Office sold the Ichigo Toyamaeki Nishi Building at a price of 2x its book value and 1.5x its appraisal value and distributed the resulting gains on sale to shareholders. Using the proceeds from this asset sale, Ichigo Office decided to acquire the Ichigo Tachikawa Koen Dori Building and entered into a purchase agreement in October 2025. The transaction was completed in December 2025 during the April 2026 fiscal period. As a result, the number of assets owned at period-end was 86 assets (total acquisition price: 218,106 million yen).