MIRAI Corporation
Semi Annual Report
For the Fiscal Period ended October 31, 2021 (The 11th Period)
1
Primary Data
- Distributions
The 11th Period | The 12th Period | The 13th Period |
Actual distributions per unit | Forecast distributions per unit (Note) | Forecast distributions per unit (Note) |
(Start of cash distribution payment on | (The Fiscal Period ending April 30, 2022) | (The Fiscal Period ending October 31, |
January 14, 2022) | 2022) | |
1,289 yen | 1,260 yen | 1,285 yen |
(Forecast: 1,260 yen) | ||
(Note) These forecasts are calculated based on certain assumptions as of December 13, 2021 and subject to change due to conditions such as change in rent income thorough tenant turnovers, acquisition and disposition of assets, and additional unit issuance. The forecasts should not be construed as guarantee of DPU.
◼ | Financial Results | |||||||
(billion yen) | Operating revenue | Net profit | DPU | (yen) | ||||
6 | 4.9 | 5.3 | 5.4 | 5.3 | 4.9 | 5.1 | 1,800 | |
4.4 | 1,563 | 1,561 | ||||||
1,600 | ||||||||
4 | 1,436 | 1,429 | ||||||
1,417 | ||||||||
1,247 | 1,289 | 1,400 | ||||||
2 | 1,200 | |||||||
1.9 | 2.2 | 2.4 | 2.5 | 2.3 | 2.0 | 2.1 | ||
0 | 1,000 | |||||||
5th FP | 6th FP | 7th FP | 8th FP | 9th FP | 10th FP | 11th FP |
(Note) MIRAI implemented a four-for-one investment unit split with April 30, 2019 as record date. For the purpose of comparison, the figures before 6th FP are post-split figures.
- Portfolio (as of the End of October 2021)
Improved stability by progress in MIRAI Revitalization Plan. | ||
Number of properties | : 34 | |
AUM | : 153.9 billion yen | |
Appraisal value | : 165.3 billion yen | |
Occupancy rate | : 97.8% | |
NOI yield (11th FP result) | : 4.5% *based on book value | |
Portfolio PML | : 2.9% | |
Ratio by Tenant | Ratio by Asset Type | |
(based on rent) | (based on acquisiton price) | |
Others | ||
9.2% | ||
Hotel | ||
17.2% | ||
Top 10 | Core Assets | |
36.6% | 87.6% | |
Others | Office | |
63.4% | ||
Retail | 54.5% | |
19.1% |
Ratio by Area
(based on acquisiton price) Others
Nagoya 13.5% area
8.9% Three Metropolitan
Osaka | Areas | |
area | 86.5% | Tokyo |
16.9% | ||
area | ||
60.7%
(Note) Ratio by tenant is based on lease contract in place with end tenants as of the end of October 2021. BizMiiX Yodoyabashi (former Hotel WBF Yodoyabashi-Minami) is classified as office by adding the additional investment related to conversion on the acquisition price.
- Finance (as of the End of October 2021)
Stable financial base maintained on the back of Mitsui & Co.'s credit.
LTV (based on total assets) | : 48.8% |
Long-term fixed interest debt ratio : 100.0% | |
Average interest rate | : 0.55% |
Average remaining maturity | : 3.3 years |
Rating | : Japan Credit Rating Agency, Ltd. (JCR) / A+ (Stable) |
Rating and Investment Information, Inc. (R&I) / A (Stable)
2
- ESG
➢ GRESB Real Estate Assessment (ESG benchmark for real estate)
MIRAI has been participating in the GRESB Real Estate Assessment, an annual benchmark assessment to measure ESG consideration in real estate sector, since FY2021.
This year's assessment: "2 Star" and "Green Star"
*"Green Star" is a rating that achieves high performance both in "Management Component" and "Performance Component".
- Green finance
In November 2021, MIRAI implemented the first green finance (green loan and green bond).
Upper limit of green finance | : 23,858 million yen |
Total amount of green finance | : 5,200 million yen |
*Green eligibility criteria |
i) Assets that have achieved or will achieve any following certification (Five, four, three stars in DBJ Green Building Certification, etc.)
ii) Renovation work for environmental improvements
(expected to reduce consumption or emissions by 30 % or more compared to previous levels)
- Ongoing contributions to the local community
MIRAI provides Smile Hotel Naha City Resort to Okinawa Prefecture as a recovery accommodation facility for patients with minor illnesses of COVID-19.
3
1 Overview of Asset Management
(1) Operating Results of MIRAI Corporation (hereinafter "MIRAI")
The 7th Period | The 8th Period | The 9th Period | The 10th Period | The 11th Period | ||||
Period | From May 1, 2019 | From Nov. 1, 2019 | From May 1, 2020 | From Nov. 1, 2020 | From May 1, 2021 | |||
to Oct. 31, 2019 | to Apr. 30, 2020 | to Oct. 31, 2020 | to Apr. 30, 2021 | to Oct. 31, 2021 | ||||
Operating revenue | (Million yen) | 5,340 | 5,448 | 5,367 | 4,973 | 5,113 | ||
Operating expenses | (Million yen) | 2,623 | 2,583 | 2,744 | 2,652 | 2,716 | ||
Operating income | (Million yen) | 2,716 | 2,865 | 2,622 | 2,321 | 2,397 | ||
Ordinary income | (Million yen) | 2,474 | 2,595 | 2,378 | 2,073 | 2,144 | ||
Net income | (Million yen) | 2,472 | 2,594 | 2,376 | 2,072 | 2,143 | ||
Total assets | (Million yen) | 153,052 | 161,027 | 159,222 | 161,815 | 161,226 | ||
[Changes from the previous period] | (%) | [0.4] | [5.2] | [(1.1)] | [1.6] | [(0.4)] | ||
Net assets | (Million yen) | 70,925 | 75,572 | 75,428 | 75,110 | 75,308 | ||
[Changes from the previous period] | (%) | [0.1] | [6.6] | [0.2] | [(0.4)] | [0.3] | ||
Interest-bearing debt | (Million yen) | 74,700 | 77,700 | 75,700 | 78,700 | 78,700 | ||
Unitholders' capital (Note 3) | (Million yen) | 69,074 | 73,516 | 73,516 | 73,516 | 73,516 | ||
Total number of outstanding investment units | (Units) | 1,581,640 | 1,662,240 | 1,662,240 | 1,662,240 | 1,662,240 | ||
Net assets per unit (Note 4) | (Yen) | 44,843 | 45,464 | 45,377 | 45,186 | 45,305 | ||
Total distributions | (Million yen) | 2,472 | 2,594 | 2,375 | 2,072 | 2,142 | ||
Distributions per unit | (Yen) | 1,563 | 1,561 | 1,429 | 1,247 | 1,289 | ||
Of which, profit distribution per unit | (Yen) | 1,481 | 1,561 | 1,429 | 1,238 | 1,289 | ||
Of which, distributions in excess of earnings per unit | (Yen) | 82 | - | - | 9 | - | ||
Ordinary income to total assets (Note 5) | (%) | 1.6 | 1.7 | 1.5 | 1.3 | 1.3 | ||
Net income to net assets (Note 5) | (%) | 3.5 | 3.5 | 3.1 | 2.8 | 2.8 | ||
Net assets to total assets at end of period (Note 5) | (%) | 46.3 | 46.9 | 47.4 | 46.4 | 46.7 | ||
[Changes from the previous period] | (%) | [(0.1)] | [0.6] | [0.4] | [(1.0)] | [0.3] | ||
Payout ratio (Note 5) | (%) | 94.7 | 100.0 | 99.9 | 99.3 | 100.0 | ||
(Note 1) The fiscal period of MIRAI is six months from May 1 to October 31 and from November 1 to April 30 of the following year.
(Note 2) | Unless otherwise stated, all figures are rounded down to the nearest million yen, and percentages are rounded to the first decimal place. | |
(Note 3) | Unitholders' capital does not take into account changes in unitholders' capital due to the implementation of distributions in excess of earnings related to the reserve for adjustment of temporary differences, etc. | |
(Note 4) | Calculated based on the following formula. | |
Ordinary income to total assets | Ordinary income / {(Total assets at beginning of period + Total assets at end of period) / 2} * 100 | |
Net income to net assets | Net income / {(Net assets at beginning of period + Net assets at end of period) / 2} * 100 | |
Net assets to total assets at end of period (%) | Net assets at end of period / Total assets at end of period * 100 | |
Payout ratio | Total distributions (excluding distributions in excess of earnings) / Net income * 100 |
- Summary of Operating Results for the Fiscal Period under Review
(i) Main History of MIRAI
MIRAI is diversified J-REIT. Based on the Act on Investment Trusts and Investment Corporations of Japan (Act No. 198 of 1951; including revisions enforced thereafter) (hereinafter "AITIC"), MIRAI was founded on December 4, 2015 with a capital contribution of 150 million yen (750 units), by Mitsui Bussan & IDERA Partners Co., Ltd. (hereinafter the "Asset manager") as the founding planner and was listed on the REIT section of the Tokyo Stock Exchange on December 16, 2016 (securities code: 3476). As of October 31, 2021, the total number of outstanding investment units are 1,662,240 and MIRAI owns 34 properties (total acquisition price of 153,904 million yen).
MIRAI positions assets located in the three major metropolitan areas of Japan with high population concentrations as its main investment targets and aims to obtain mid-to-long term stable cash flows and sustained growth in unitholders' value by building a portfolio centered on its "Core Assets" (Note).
(Note) "Core Assets" means the assets that constitute the core of MIRAI's portfolio. Specifically, among traditional investment properties such as offices, retail properties, hotels, residential and logistics properties. Occupancy rates of 80% or more must be secured in principle (including cases where such occupancy rates are expected) with MIRAI to determine a stable rental income to be expected.
(ii) Operating Environment and Business Performance
During the fiscal period under review, the Japanese economy continued to be affected by COVID-19, and the hotel sector of MIRAI was also greatly affected by the re-issuance and subsequent extension of the state of emergency declaration, mainly in major metropolitan areas, after April 25, 2021. In October 2021, when the number of newly infected people decreased significantly and the state of emergency declaration was lifted, the occupancy rate of most hotels is on an improving trend, but MIRAI needs to continue to monitor the trend of hotel occupancy rates. In the retail facility sector, the impact of COVID-19 has been limited, and Mi-Nara, a retail complex in Nara Prefecture, has begun to show the effects of the renewal, including the replacement of core tenants, which was undertaken with the aim of improving visitor number. In the office leasing market, the impact of COVID-19 continues to be apparent in some properties, while progress is being made in backfilling cancelled space.
4
Under such circumstances, MIRAI did not acquire or dispose of any assets during the fiscal period under review. As a result, as of the end of the 11th fiscal period, MIRAI had 34 properties under management, with a total acquisition price of 153,904 million yen, a total leasable area of 347,824.02 sqm, and occupancy rate of 97.8%.
(iii) Overview of Fund Procurement
During this fiscal period under review, MIRAI repaid short-term borrowings of 1,000 million yen based on the commitment line on September 28, 2021 and 2,000 million yen on September 30, 2021 through #3rd Investment Corporation Bond of 2,000 million yen and #4th Investment Corporation Bond of 1,000 million yen issued on September 28, 2021. In addition, MIRAI borrowed long-term borrowings of 1,500 million yen on September 30, 2021 to repay borrowings of 1,500 million yen maturing on the same day. The balance of borrowings and investment corporation bonds as of the end of the 11th fiscal period was 78,700 million yen (of which 10,000 million yen was current portion of long-term borrowings, 63,700 million yen was long-term borrowings, and 5,000 million yen was investment corporation bonds).
For the purpose of securing flexible and stable fund procurement and structuring an even stronger financial base, MIRAI has established a commitment line with a maximum borrowing amount of 3,000 million yen (the balance of unexercised credit line as of the date of this document is 3,000 million yen).
(iv) Operating Results and Distributions
As a result of the above operation, MIRAI recorded operating revenue of 5,113 million yen, operating income of 2,397 million yen, ordinary income of 2,144 million yen, and net income of 2,143 million yen for the 11th fiscal period.
Profit distributions for the current fiscal period (excluding distributions in excess of earnings) shall be made in accordance with the distribution policy set forth in the Articles of MIRAI and in accordance with Article 67.15 of the Act on Special Measures Concerning Taxation (Law No. 26 of 1957, including subsequent amendments. hereinafter the "Act on Special Measures Concerning Taxation"), MIRAI decided to distribute 2,142,627,360 yen, which is the entire amount after deducting the reversal of the provision for adjustment of temporary differences, etc. (as defined in Article 2, Paragraph 2, Item 30 of the Rules of Account Settlement of Investment Corporations) from the income as defined in Article 136, Paragraph 1 of the AITIC, except for fractions of less than one yen, in an attempt to make profit distributions tax-deductible. As a result of the above, the distributions per investment units for the fiscal period under review (excluding distributions in excess of earnings) was 1,289 yen.
(3) Status of Capital Increase, etc.
Changes in the total number of outstanding investment units and unitholders' capital over the past five years are as follows.
Total number of outstanding investment units | Unitholders' capital (Thousand yen) (Note 1) | |||||||||||||||||||||
Date | Summary | (units) | Remarks | |||||||||||||||||||
Changes | Balance | Changes | Balance | |||||||||||||||||||
December 15, | Capital increase through public offering | 293,000 | 293,750 | 51,742,335 | 51,892,335 | (Note 2) | ||||||||||||||||
2016 | ||||||||||||||||||||||
May 23, 2018 | Capital increase through public offering | 43,300 | 337,050 | 7,395,250 | 59,287,585 | (Note 3) | ||||||||||||||||
June 12, 2018 | Capital increase through third-party allotment | 2,160 | 339,210 | 368,908 | 59,656,493 | (Note 4) | ||||||||||||||||
November 1, 2018 | Capital increase through public offering | 53,500 | 392,710 | 8,965,583 | 68,622,077 | (Note 5) | ||||||||||||||||
November 27, | Capital increase through third-party allotment | 2,700 | 395,410 | 452,468 | 69,074,546 | (Note 6) | ||||||||||||||||
2018 | ||||||||||||||||||||||
May 1, 2019 | Split of investment units | 1,186,230 | 1,581,640 | - | 69,074,546 | (Note 7) | ||||||||||||||||
December 24, | Capital increase through public offering | 76,500 | 1,658,140 | 4,215,609 | 73,290,155 | (Note 8) | ||||||||||||||||
2019 | ||||||||||||||||||||||
January 21, 2020 | Capital increase through third-party allotment | 4,100 | 1,662,240 | 225,934 | 73,516,089 | (Note 9) | ||||||||||||||||
(Note 1) Changes in unitholders' capital due to the implementation of distributions in excess of earnings related to the reserve for adjustment of temporary differences, etc. have not been taken into account.
(Note 2) New investment units were issued at the price of 183,000 yen per unit (paid-in amount: 176,595 yen) through a public offering for the acquisition of new properties, etc.
(Note 3) New investment units were issued at the price of 176,962 yen per unit (paid-in amount: 170,791 yen) through a public offering for the acquisition of new properties, etc.
(Note 4) New investment units were issued at the price of 170,791 yen per unit through third-party allotment in connection with a public offering for the acquisition of new properties, etc.
(Note 5) New investment units were issued at the price of 173,452 yen per unit (paid-in amount: 167,581 yen) through a public offering for the acquisition of new properties, etc.
(Note 6) New investment units were issued at the price of 167,581 yen per unit through third-party allotment in connection with a public offering for the acquisition of new properties, etc.
(Note 7) MIRAI conducted a four-for-one unit split with April 30, 2019 as the record date and May 1, 2019 as the effective date.
(Note 8) New investment units were issued at the price of 57,037 yen per unit (paid-in amount of 55,106 yen) through a public offering for the acquisition of new properties, etc.
(Note 9) New investment units were issued at the price of 55,106 yen per unit through third-party allotment in connection with a public offering for the acquisition of new properties, etc.
5
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Mirai Corporation published this content on 02 February 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 02 February 2022 07:48:07 UTC.