ORIX JREIT INC. NEWS RELEASE
R&I Affirms A+, Stable: Orix JREIT Inc.
Dec 02, 2014
Rating and Investment Information, Inc. (R&I) has announced the following:
Orix JREIT Inc. (OJR) is a real estate investment trust (J-REIT) that was listed in June 2002. As a diversified REIT, it invests in a wide variety of properties centered on office buildings. Other properties include retail facilities, logistics facilities and residential properties. ORIX Corp. serves as the sponsor of OJR.
OJR, which aims to be a diversified REIT with stability and growth potential, has created a quality portfolio consisting primarily of properties in the Greater Tokyo area. The average property age is
relatively low at 11 years (as of October 2014), as OJR aggressively acquires properties developed by the sponsor group. The breakdown of the current portfolio by property type is 54% in office buildings, 22% in retail facilities, 13% in residential properties, 8% in logistics facilities, and others.
With the completion of a property acquisition scheduled for December 2014, OJR's asset size will grow to over 500 billion yen, one of the largest among J-REITs. Portfolio diversification will also progress
further.
The occupancy rate of office buildings stays very high at 98-99%, which is increasing the stability of earnings. Other types of properties continue to show solid performance as well. Although its portfolio is diversified by geography and property type, OJR reduces accompanying investment risk by capitalizing on the sponsor's expertise and network.
Because its investment has been focused on improving portfolio profitability and stability in recent years, office buildings and properties in central Tokyo account for a declining portion of the portfolio. The overall portfolio quality is maintained, however, thanks to selective investment in highly competitive properties from a rich pipeline.
In the favorable capital raising environment, OJR conducted public offerings in the past four consecutive terms. As a result, its LTV has fallen to around 46% despite a large amount of property acquisitions. As the appraisal value of existing properties keeps rising, unrealized gains are increasing.
OJR continues to raise funds stably, mainly from mega-banks and trust banks. The average remaining term to maturity is long at 3.9 years (as of October 2014). Maturities are staggered over the years through
2024, and funding costs are falling further. With a total of 33.5 billion yen in committed lines of credit,
liquidity is ample.
The Rating Outlook is Stable. In tandem with an increase in assets, earnings from existing properties are gaining stability. On the financial front, OJR is striving to lower leverage and strengthen its funding base. While aggressive investment will likely continue, OJR plans to remain focused on profitability and leverage.
The primary rating methodologies applied to this rating are provided at "Basic Methodologies for R&I's Credit Rating" and "Rating Methodology for J-REIT". The methodologies are available at the web site listed below, together with other rating methodologies that are taken into consideration when assigning the rating.
http://www.r-i.co.jp/eng/cfp/about/methodology/index.html
■Contact : Investors Service Division TEL.+81-(0)3-3276-3511 E-mail. infodept@r-i.co.jp
■Media Contact : Corporate Planning Division (Public Relations) TEL.+81-(0)3-3276-3438
Rating and Investment Information, Inc. Nihonbashi 1-chome Mitsui Bldg., 1-4-1, Nihonbashi, Chuo-ku, Tokyo 103-0027, http://www.r-i.co.jpCredit ratings are R&I's opinions on an issuer's general capacity to fulfill its financial obligations and the certainty of the fulfillment of its individual obligations as promised (creditworthiness) and are not statements of fact. Further, R&I does not state its opinions about any risks other than credit risk, give advice regarding investment decisions or financial matters, or endorse the merits of any investment.
R&I does not undertake any independent verification of the accuracy or other aspects of the related information when issuing a credit rating and makes no related representations or warranties. R&I is not liable in any way for any damage arising in relation to credit ratings (including amendment or withdrawal thereof). As a general rule, R&I issues a credit rating for a fee paid by the issuer. For details, please refer to http://www.r-i.co.jp/eng/policy/policy.html. © Rating and Investment Information, Inc.
NEWS RELEASE
ISSUER: Orix JREIT Inc. (Sec. Code: 8954) Issuer Rating RATING: A+, Affirmed RATING OUTLOOK: StableUnsec. Str. Bonds No.3 | Issue Date Nov 18, 2010 | Maturity Date Nov 18, 2015 | Issue Amount (mn) JPY 5,000 |
RATING: | A+, Affirmed | ||
Unsec. Str. Bonds No.5 | Issue Date | Maturity Date | Issue Amount (mn) |
RATING: | Feb 08, 2013 A+, Affirmed | Feb 08, 2018 | JPY 5,000 |
Unsec. Str. Bonds No.6 | Issue Date | Maturity Date | Issue Amount (mn) |
RATING: | Jan 20, 2014 A+, Affirmed | Jul 20, 2018 | JPY 5,000 |
Unsec. Str. Bonds No.7 | Issue Date | Maturity Date | Issue Amount (mn) |
RATING: | Jan 20, 2014 A+, Affirmed | Jan 19, 2024 | JPY 2,500 |
■Contact : Investors Service Division TEL.+81-(0)3-3276-3511 E-mail. infodept@r-i.co.jp
■Media Contact : Corporate Planning Division (Public Relations) TEL.+81-(0)3-3276-3438
Rating and Investment Information, Inc. Nihonbashi 1-chome Mitsui Bldg., 1-4-1, Nihonbashi, Chuo-ku, Tokyo 103-0027, http://www.r-i.co.jpCredit ratings are R&I's opinions on an issuer's general capacity to fulfill its financial obligations and the certainty of the fulfillment of its individual obligations as promised (creditworthiness) and are not statements of fact. Further, R&I does not state its opinions about any risks other than credit risk, give advice regarding investment decisions or financial matters, or endorse the merits of any investment.
R&I does not undertake any independent verification of the accuracy or other aspects of the related information when issuing a credit rating and makes no related representations or warranties. R&I is not liable in any way for any damage arising in relation to credit ratings (including amendment or withdrawal thereof). As a general rule, R&I issues a credit rating for a fee paid by the issuer. For details, please refer to http://www.r-i.co.jp/eng/policy/policy.html. © Rating and Investment Information, Inc.
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