Semiannual Report
Forty-rst Fiscal Period
From December 1, 2023 to May 31, 2024
41st
Profile
United Urban Investment Corporation ("United Urban") was incorporated on November 4, 2003, under the Act on Investment Trusts and Investment Corporations of Japan. On December 22, 2003, United Urban was listed on the real estate investment trust ("J-REIT") section of the Tokyo Stock Exchange (Securities Code: 8960), and United Urban has been growing steadily since listing. In addition, through the merger with Nippon Commercial Investment Corporation ("NCI") in December 2010, United Urban considerably expanded the size of assets.
In order to obtain stable earnings over the medium to long term, United Urban intends to form an optimal portfolio that is diversified both in terms of the types of use and areas of location, which is thought to cope with economic and real estate market fluctuations. And United Urban will conduct asset management aiming to both improve revenues and mitigate risk through property management and enhancement of property values based on a bottom- up approach.
Growth of Assets (Note 1)
Retail Properties | Office Buildings | Hotels | Residential Properties | Others | ||||||||||||||||||||||||||||||
(Billions of yen) | 590.4 | |||||||||||||||||||||||||||||||||
600 | 575.5 | |||||||||||||||||||||||||||||||||
548.7 | ||||||||||||||||||||||||||||||||||
Merger with NCI | 10th anniversary of | |||||||||||||||||||||||||||||||||
500 | Split of investment units | listing (Dec. 2013) | 493.1 | 520.0 520.1 | ||||||||||||||||||||||||||||||
(first case for J-REIT) (Dec. 2010) | 471.2 474.9 | |||||||||||||||||||||||||||||||||
Issuance of corporate bonds for retail investors | ||||||||||||||||||||||||||||||||||
400 | Establishment | 416.7 | 422.6 | 429.0 |
(Nov. 2003) | 387.2 | |||
The tenth | ||||
J-REIT listed |
300 on TSE (Dec. 2003)
220.0 | ||||||||||||||
200 | ||||||||||||||
100 | 64.7 | |||||||||||||
0 | 1st FP | 14 th FP | 15 th FP | 16 th FP | 17th FP | 18th FP | 19 th FP | 20th FP | 21st FP | 22nd FP | 23rd FP | 24th FP | 25th FP | 26th FP |
(May/2004) | (Nov/2010) (May/2011) (Nov/2011) (May/2012) (Nov/2012) (May/2013) (Nov/2013) (May/2014) (Nov/2014) (May/2015) (Nov/2015) (May/2016) (Nov/2016) | |||||||||||||
No. of | 14 | 50 | 86 | 90 | 91 | 94 | 97 | 97 | 103 | 108 | 108 | 117 | 118 | 119 |
Properties |
Notes: 1. The total acquisition prices of properties owned by United Urban at the end of each fiscal period are shown above, and figures are rounded to the units stated.
- Unless otherwise indicated, in principle, all figures in this report are rounded down to the nearest unit.
- In this document, J-REIT refers to a real-estate investment trust listed on a Japanese stock exchange.
Contents
- Key Figures
- Financial Highlights
- To Our Unitholders
- Distinctive Features of United Urban
- Acquisitions and Sales of Properties
The shareholder of Marubeni REIT Advisors Co., Ltd. ("MRA") (Note), the asset management company that United Urban entrusts with asset management services, is the general trading company Marubeni Corporation ("Marubeni"). United Urban takes full advantage of the functions and the wide-ranging information network and support provided by Marubeni and its affiliated companies to execute property acquisition and sales, tenant leasing, and to reduce costs, etc. Furthermore, United Urban aims to develop and manage a stable portfolio of properties over the medium to long term.
Note: Japan REIT Advisors Co., Ltd., the asset management company that United Urban entrusts with asset management services, changed its corporate name to Marubeni REIT Advisors Co., Ltd. on December 1, 2023.
20th anniversary of listing (Dec. 2023)
Debt financing through green finance with the first joint | 671.4 | 675.1 | 676.8 | 682.3 | 688.9 | 691.8 | 698.2 | ||||
management specified money trust in Japan (Sep. 2018) | 661.5 | 656.4 | |||||||||
643.8 | |||||||||||
621.6 | 626.1 | ||||||||||
610.9 | 608.6 | 613.9 |
27th FP | 28th FP | 29th FP | 30th FP | 31st FP | 32nd FP | 33rd FP | 34th FP | 35th FP | 36 th FP | 37 th FP | 38 th FP | 39 th FP | 40 th FP | 41 st FP |
(May/2017) (Nov/2017) (May/2018) (Nov/2018) (May/2019) (Nov/2019) (May/2020) (Nov/2020) (May/2021) (Nov/2021) (May/2022) (Nov/2022) (May/2023) (Nov/2023) (May/2024) | ||||||||||||||
123 | 116 | 116 | 119 | 120 | 122 | 129 | 130 | 133 | 136 | 136 | 137 | 140 | 141 | 140 |
10 | Investment Unit Information | 26 | Profile of Asset Management Company |
11 | Portfolio Properties | 27 | Performance Report |
21 | Financial Status | 57 | Financial Section |
- ESG Initiatives
- Corporate Profile
United Urban Investment Corporation 1
Key Figures | (As of May 31, | 2024) |
Cash Distribution per Unit for the 41st Fiscal Period
¥3,629
Total Acquisition Price
- 698billion
Occupancy Rate
98.9%
Ratings (As of July 31, 2024)
Long-term issuer rating
JCRAA
Rating outlook: Stable
Number of Properties
140
Loan-to-Value Ratio (LTV) (total assets basis) (Note)
44.7%
Note | LTV (total assets basis) = |
Interest-bearing liabilities (including corporate bonds) / Total assets | |
Total Amount of Retained Earnings (Note)
- 9,750million
Note | Reserve for temporary difference adjustments and |
reserve retained for distribution | |
2 United Urban Investment Corporation
Financial Highlights
Financial Indicators
(Millions of yen, except per unit information)
39th Fiscal Period | 40th Fiscal Period | 41st Fiscal Period | 42nd Fiscal Period | 43rd Fiscal Period | ||||||
December 1, 2022 - | June 1, 2023- | December 1, 2023- | June 1, 2024 - | December 1, 2024- | ||||||
May 31, 2023 | November 30, 2023 | May 31, 2024 | November 30, 2024 | May 31, 2025 | ||||||
(forecast) | (forecast) | |||||||||
Operating revenues | ¥ | 25,052 | ¥ | 25,356 | ¥ | 25,981 | ¥ | 27,980 | ¥ | 26,607 |
Operating income | 10,903 | 11,408 | 12,215 | 13,613 | 12,372 | |||||
Ordinary income | 9,930 | 10,370 | 11,170 | 12,418 | 11,012 | |||||
Net income | 9,929 | 10,369 | 11,169 | 12,417 | 11,012 | |||||
Total cash distribution | 10,005 | 10,445 | 11,244 | 11,867 | 11,402 | |||||
Cash distribution per unit (Yen) | 3,229 | 3,371 | 3,629 | 3,830 | 3,680 | |||||
Total assets | 723,202 | 727,227 | 734,420 | - | - | |||||
Total net assets | 360,480 | 360,800 | 361,801 | - | - | |||||
Net assets per unit (Yen) | 116,336 | 116,440 | 116,763 | - | - | |||||
Cash distribution per unit (Yen)
3,629 | 3,830 | 3,680 | ||||||
3,371 | ||||||||
3,182 | 3,100 | 3,112 | 3,144 | 3,229 | ||||
35th FP | 36th FP | 37th FP | 38th FP | 39th FP | 40th FP | 41st FP | 42nd FP | 43rd FP |
(May/2021) | (Nov/2021) | (May/2022) | (Nov/2022) | (May/2023) | (Nov/2023) | (May/2024) | (Nov/2024) | (May/2025) |
(forecast) | (forecast) |
Cash distribution per unit forecast for the | ¥ | 3,830 |
42nd Fiscal Period: | ||
(From June 1, 2024 to November 30, 2024)
Cash distribution per unit forecast for the | ¥ | 3,680 |
43rd Fiscal Period: | ||
(From December 1, 2024 to May 31, 2025)
Note: Cash distribution per unit forecast is our current expectations produced as of July 19, 2024, based on certain assumptions. Accordingly, the actual cash distributions per unit may differ from forecasts because of future acquisitions and sales of properties, real estate market trends and changes in other circumstances around United Urban. In addition, the forecasts are not guarantees of payment of any cash distributions by United Urban. For the latest information of forecasts, please refer to United Urban's website.
United Urban Investment Corporation 3
To Our Unitholders
We would like to express our sincere gratitude for your support and patronage of United Urban Investment Corporation ("United Urban").
On July 19, 2024, United Urban announced the financial results for the 41st fiscal period ended May 31, 2024.
Under our investment policy as a diversified J-REIT, in this fiscal period, United Urban acquired two office buildings (total acquisition price: ¥11,072 million). In addition, we sold two properties (total sale price: ¥4,150 million): one retail property and one other property (infrastructure facility) by comprehensively assessing the real estate sales market and the potential of our properties, etc. As a result, we improved the profitability of our property portfolio and achieved further qualitative improvement, such as refreshing some older properties.
For the real estate market, uncertainty over the future continued, caused by concerns over the surge in energy and raw material prices due to the unstable global situation and the depreciation of yen. However, demand in the real estate leasing market in Japan remained strong due to factors such as an increase in corporate capital expenditures and an uptick in employment and wage environments as well as an increase in the number of overseas visitors coming to Japan. United Urban took advantage of these opportunities and implemented measures to improve profitability in each type of use and field, then posted operating revenues of ¥25,981 million (an increase of ¥625 million over the previous fiscal period) and net income of ¥11,169 million (an increase of ¥799 million over the previous fiscal period). As a result, the cash distribution per unit for the 41st fiscal period reached ¥3,629 (an increase of ¥258 over the previous fiscal period).
In the currently ongoing 42nd fiscal period ending November 30, 2024, United Urban has decided to acquire three properties, comprising two office buildings and one hotel (total acquisition price: ¥24,059 million) and sell one office building (sale price: ¥19,000 million), in order to
achieve sustainable growth and improve unitholder value.
Your continuing support and kind attention are highly appreciated.
Kenmin Asatani (left)
Executive Officer
United Urban Investment Corporation
Junichi Batai (right)
President and Chief Executive Officer
Marubeni REIT Advisors Co., Ltd.
4 United Urban Investment Corporation
Distinctive Features of United Urban
A J-REIT Pursuing Sustainable Growth by Identifying Real Estate with Intrinsic Value
Real Estate with Intrinsic Value
Real Estate Securing Stable Profitability
over the Medium to Long Term, Regardless of Asset Type/Area
Diversified
Investment
Selective Investment in a Wide Variety of Real Estate
Stabilize profitability through diversified investment
Expand acquisition opportunities by diversifying target assets/ approaches
Analyze external environment including macro economy and market trends, etc.
Investment Criteria
Location
Building | Tenants | Contract Terms | ||
Specifications | ||||
Asset Type | Area | |
Greater Tokyo, major cities | ||
and surrounding areas in | ||
Japan, including government | ||
Retail | Office Buildings | designated cities |
Properties |
Hotels Residential
Properties
Others
Hands-on
Management
Enhance Property Value
through
Bottom-up Approach
Growth strategy based on a medium- to long-term perspective
Flexible approach for addressing change
Asset management conducted jointly with partner companies
Sustainable Growth
Pursue Sustainable Growth of Investment Corporation
Maximization of Unitholder Value Engagement with Stakeholders Coexistence with the Environment and Society
Diversified Investment
Regardless of specific asset types and locations, United Urban pursues various real estate investment opportunities with superior potential and acquires properties with intrinsic value.
United Urban makes investments in properties deemed to be the most advantageous by carefully eyeing the market conditions for asset types and locations. This enables us to focus on reasonable acquisitions amid fierce investment competition and to continue acquiring properties at the target yield.
Hands-on Management
United Urban takes a bottom-up approach and prioritizes communications with tenants and strategic business partners to maximize the potential of every property. Through strategic investments, including large renewal/ expansion to capitalize on anticipated change in customer needs and market trends, United Urban keeps and raises the value of every property.
By proactive leasing and reducing operating costs, United Urban also aims to increase the profitability of every property.
United Urban Investment Corporation 5
Acquisitions and Sales of Properties
New Acquisition during the 41st Fiscal Period
B51 | Toranomon Hills Business Tower (Note) | OFFICE BUILDINGS |
- The building is located in an area with highly convenient transportation options including five stations and nine subway lines, and is directly connected to Toranomon Hills Station on Tokyo Metro Hibiya Line and Toranomon Station on Tokyo Metro Ginza Line.
- The Toranomon area is currently undergoing redevelopment including the creation of an environmental infrastructure for global business with the aim of attracting financial and foreign companies.
Location | Minato-ku, Tokyo |
Structure and Scale | S/SRC B3/37F |
Completed | January 2020 |
. | |||||||
Sta | . | Hibiya | Sta | ||||
-gijidomae | Hibiya Park | ||||||
Sta. | Kasumigaseki | ||||||
Kokkai | kyo Metro Maruno | ||||||
To | |
Ministry of Finance | uchi |
Line |
Acquisition Date | February 1, 2024 |
Acquisition Price | ¥8,435 million |
Ministry of Education, | Ministry of Economy, | To | k | |||||||||||
Culture, Sports, | Trade and Industry | |||||||||||||
Science and Technology | ||||||||||||||
Tokyo | Toranomon | |||||||||||||
Metro | Ginza | Line | Sta. | |||||||||||
1 | Toranomon Hills | |||||||||||||
Sta | ||||||||||||||
Business Tower | ||||||||||||||
. | ||||||||||||||
Toranomon | Hills | |||||||||||||
Line | ||||||||||||||
Hibiya | dori | Toranomon Hills | ||||||||||||
Metro | Sakurada | - | Mori Tower | |||||||||||
Tokyo | PF Building | |||||||||||||
Toranomon | dori | |||||||||||||
. | ||||||||||||||
Kamiyacho | Sta | Hibiya | - | |||||||||||
301 |
in | Line | |||||||||||||||
e | Main | |||||||||||||||
hiy | L | |||||||||||||||
a | ||||||||||||||||
yo | Me troC | od | Tokaido | |||||||||||||
. | Line | / | ||||||||||||||
Uchisaiwaicho | Sta | Yamanote | ||||||||||||||
JR | ||||||||||||||||
Sotobori- | ||||||||||||||||
dori | ||||||||||||||||
Line | . | Shimbashi | ||||||||||||||
Mita | Sta | Sta. | ||||||||||||||
Subway | Shimbashi | |||||||||||||||
Toei | ||||||||||||||||
Keihin | Shinkansen | |||||||||||||||
Ring | Route | 2 | ||||||||||||||
Dai | - Ichi | Tokaido | ||||||||||||||
15 |
Note: United Urban holds the trust beneficial interest of the compartmentalized ownership of the eighth floor of the property (3.05% co-ownership of the site).
Additional Acquisition during the 41st and the 42nd Fiscal Period
B50 | OSAKA BAY TOWER (Acquisition of 90% (10% + 80%) quasi co-ownership of the trust beneficiary interest) (Note) OFFICE BUILDINGS |
- Within 10 minutes by train to the Umeda area and Honmachi area in the center of Osaka. The property is connected to Bentencho Station, a transport hub between the Osaka Bay area and the center of Osaka.
- The location potential is expected to be further improved as the property is close to Yumeshima where the upcoming 2025 Japan International Exposition ("the Osaka Expo") and the integrated resorts are planned.
Location | Osaka, Osaka | |
Structure and Scale | SRC/S/RC B3/50F | |
Completed | September 1993 | |
(Scheduled) | (1) | March 28, 2024 |
Acquisition Date | (2) | September 2, 2024 |
(Scheduled) | ¥23,733 million | |
(1) | ¥2,637 million | |
Acquisition Price | ||
(2) | ¥21,096 million | |
Line | |
Maishima Sta. | Yumesaki |
(tentative) | JR |
Shinsakurajima Sta. (tentative)
Universal Studios Japan
Yumeshima Sta. | Osakako Sta. | |
(tentative) | Line | |
extended) | ||
Chuo | ||
Cosmosquare Sta. | Metrobe | |
Osaka | to | |
(scheduled |
Line
Loop
Osaka
JR
Bentencho Sta.
Note: United Urban acquired 10% quasi co-ownership of the trust beneficial interest of a part of compartmentalized ownership in the property on March 20, 2023 (the 39th fiscal period).
6 United Urban Investment Corporation
Acquisitions and Sales of Properties
Additional Acquisition during the 42nd Fiscal Period
B49 | IIDABASHI PLANO (Note) | OFFICE BUILDINGS |
- A complex consisting of an office building with 17 floors above ground, a residential building with 38 floors above ground, and three retail buildings.
- Located a 2- to 3-minute walk from Iidabashi Station (JR Line, the Tokyo Metro Line, and the Toei Subway Line), and 10 minutes from Iidabashi Station to Tokyo Station and 12 minutes to Shinjuku Station by train.
Location | Chiyoda-ku, Tokyo |
Structure and Scale | RC B3/38F |
Completed | February 2009 |
Acquisition Date | June 26, 2024 |
Acquisition Price | ¥383 million |
Iidabashi IC | Metropolitan | Korakuen | ||
Entrance | Route | Subway | Line | Garden |
5 | Koishikawa |
Tooky | Ikebukuro | Oedo | ||||
Yurakucho | ExpresswaLine y | Toei | ||||
JCHO | ||||||
Metro | ||||||
Tokyo Shinjuku | ||||||
Medical Center | Line | Tokyo Metro | ||||
Iidabashi IC | ||||||
Namboku Line | ||||||
Toei | Exit | |||||
Sotobori-dori | ||||||
Oedo Subway | ||||||
Line | ||||||
Iidabashi Sta. | n | o | ||||
Chuo Li | e/S bu Line | |||||
JR |
Tokyo University
of Science
Metro | Yurakucho | |
Tokyo | Tokyo | Metro |
Note: United Urban acquired the compartmentalized ownership of the 11th to 15th floors of the office building of the property (10.06% co-ownership of the site) on March 31, 2022, and additionally acquired the compartmentalized ownership of a part of the 17th floor of the office building and a part of the second floor of the retail building B connected to the foot of the office building (total of 1.02% co-ownership of the site) on May 12, 2022. Moreover, United Urban acquired the compartmentalized ownership of a part of the fourth floor of the office building and a part of the second floor of the retail building B (total of 0.76% co-ownership of the site) on June 26, 2024.
Line
Namboku
Line
The Nippon
Dental
University
Hospital
IIDABASHI PLANO
Mejiro
-
Tokyodori
Tozai
LineMetro
New Acquisition during the 42nd Fiscal Period
C23 Randor Hotel Hiroshima Prestige
HOTELS
- An apartment hotel (a hotel for a long stay with furniture, kitchen, household appliances, etc.) located a 5-minute walk from Hiroshima Station.
- Forty-threeguest rooms in total, equipped with furniture and household appliances, and designed for a mid- to long-term stay of groups including foreign tourists and families.
Location | Hiroshima, Hiroshima |
Structure and Scale | RC 10F |
Completed | March 2023 |
Acquisition Date | June 3, 2024 |
Acquisition Price | ¥2,580 million |
Sanyo
Shinkansen
Hiroshimai
Castlele
Aioi- | ||||
Atomic | dori | |||
Hiroshima | ||||
Bomb Dome | ||||
Railway | Electric | |||
Hiroshima Peace | Main | Line | ||
Memorial Park |
JR | Line | |
Hiroshima Sta. | ||
Randor Hotel
Hiroshima
Prestige
Matoba-cho Tram Stop
Toyoko Inn
Hiroshima Heiwa-odori
Heiwa- | odori | Electric | Line | |
Hiroshima | Minami | Hiroshima City | ||
Contemporary Art | ||||
Railway | Museum of | |||
United Urban Investment Corporation 7
Acquisitions and Sales of Properties
Sale of Property in the 41st Fiscal Period
A33 Plussing Wave Enoshima
RETAIL PROPERTIES
- The property has been operated as a clinic mall since its acquisition.
- Recently, the issue had been the recovery of occupancy rates and profitability. Decided to sell the property, considering prospective capital expenditure and conditions of the real estate leasing market.
- Reused proceeds from the sale for the additional acquisition of OSAKA BAY TOWER on March 28, 2024.
Location | Fujisawa, Kanagawa |
Completed | December 2007 |
Acquisition Date | August 29, 2014 |
Appraisal Value (Note 1) | ¥1,600 million |
Date of Sale | March 29, 2024 |
Sale Price | ¥2,150 million |
Book Value (Note 2) | ¥1,867 million |
Gain or loss on Sale of Property | +¥194 million |
Notes: 1. As of November 30, 2023. 2. As of the date of sale.
E2 | Fuchu Building (Land) (Note 1) | OTHERS |
- The tenant who had rented the entire building moved out in December 2019.
- Decided to sell the property, considering prospective capital expenditure, the difficulty of finding tenants, and conditions of the real estate investment market.
- Reused proceeds from the sale for the acquisition of Toranomon Hills Business Tower.
Location | Fuchu, Tokyo |
Completed | December 1999 |
Acquisition Date | May 16, 2013 |
Appraisal Value (Note 1&2) | ¥1,910 million |
Date of Sale | January 31, 2024 |
Sale Price | ¥2,000 million |
Book Value (Note 3) | ¥1,938 million |
Gain or loss on Sale of Property | -¥5 million |
Notes: 1. Only the value of the land is described, since the building on the land was sold on March 31, 2022.
- As of November 30, 2023.
- As of the date of sale.
Sale of Property in the 42nd Fiscal Period
B7 Kawasaki Toshiba Building
OFFICE BUILDINGS
- The tenant who had rented the entire building moved out in June 2024.
- Decided to sell the property, considering factors including declining revenue due to tenant departures, the difficulty of finding tenants, and increased costs associated with continuing to own the property, as well as conditions of the real estate investment market.
- Reused proceeds from the sale for the additional acquisition of OSAKA BAY TOWER.
Location | Kawasaki, Kanagawa | |
Completed | April 1987 | |
Acquisition Date | December 20, 2004 | |
Appraisal Value (Note 1) | ¥18,500 million | |
Notes: 1. | As of May 31, 2024. | |
2. | Estimated amount. |
Date of Sale | June 28, 2024 |
Sale Price | ¥19,000 million |
Book Value (Note 2) | ¥17,693 million |
Gain or loss on Sale of Property (Note 2) | +¥941 million |
8 United Urban Investment Corporation