Notice Concerning Forecasts of the Financial Results for the Fiscal Periods Ending November 2016, May 2017 and November 2017

Transcription

1 To all concerned parties: [Translation for reference purposes only] July 29, 2016 Real Estate Investment Trust Securities Issuer: Ooedo Onsen Reit Investment Corporation Representative: Fuminori Imanishi, Executive Director (Securities Code: 3472) Asset Managemer: Ooedo Onsen Asset Management Co., Ltd. Representative: Fuminori Imanishi, Chief Executive Officer Inquiries: Tomohiro Honda, Chief Financial Officer (TEL: ) Notice Concerning Forecasts of the Financial Results for the Fiscal Periods Ending November 2016, May 2017 and November 2017 Ooedo Onsen Reit Investment Corporation (the Investment Corporation ) announces its forecasts for the financial results for the fiscal period ending November 2016 (1st fiscal period: from March 29, 2016, to November 30, 2016), the fiscal period (2nd fiscal period: from December 1, 2016, to May 31, 2017) and the fiscal period ending November 2017 (3rd fiscal period: from June 1, 2017, to November 30, 2017). The details are as follows: ending November 2016 ending May 2017 ending November 2017 Operating revenues (millions of yen) Operating income (millions of yen) Ordinary income (millions of yen) Net income (millions of yen) Distributions per unit (yen) (excluding optimal payable distribution) Optimal payable distribution per unit (yen) , ,401-1, ,245 - Note: This press release was prepared to make a public announcement concerning the Investment Corporation s forecasts of the financial results for the fiscal periods ending November 2016, May 2017, and November 2017, and it has not been prepared for the purpose of solicititation for investment. We advise investors to undertake investments under their own 1

2 Reference: Fiscal Period ending November 2016: Expected number of investment units outstanding at the end of the period: 184,910; Expected net income per unit: 299 yen : Expected number of investment units outstanding at the end of the period: 184,910; Expected net income per unit: 2,401 yen ending November 2017: Expected number of investment units outstanding at the end of the period: 184,910; Expected net income per unit: 2,245 yen Notes: 1. The fiscal periods of the Investment Corporation are from June 1 to November 30 of each year (6 months) and from December 1 to May 31 of the following year (6 months). However, the 1st fiscal period commenced from the date the Investment Corporation was established (March 29, 2016) and continues until November 30, Moreover, the 1st fiscal period actually commenced from the scheduled asset acquisition date (September 1, 2016) and continues until November 30, In calculating the forecasts above, the issue price of new investment units was assumed to be 100,000 yen per unit. 3. The forecasts for the financial results for the fiscal periods ending November 2016, May 2017 and November 2017 are the current forecasts calculated based on the assumptions written in the Schedule Assumptions Underlying Forecasts of the Financial Results for the Fiscal Periods Ending November 2016, May 2017 and November Therefore, actual operating revenues, operating income, ordinary income, net income, distributions per unit (excluding optimal payable distribution), and optimal payable distribution per unit may change as a result of a difference from an assumption caused by a factor such as the acquisition or sale of real estate properties; changes in rent revenues attributable to tenant movement; changes in the property management environment due to a factor such as unexpected repair; changes in interest rates; the actual number, or the issue price, of new investment units issued; or the issuance of additional investment units. Thus, the forecast information does not guarantee the amount of distributions. 4. This forecast information may be revised if it is anticipated that it will differ by a particular degree from current forecast information. 5. The investment units of the Investment Corporation are scheduled to be listed on the Real Estate Investment Trust Section of Tokyo Stock Exchange, Inc. ( TSE ) on August 31, The values are rounded down to the nearest specified unit. 2

3 [Attachment] Assumptions Underlying Forecasts of the Financial Results for the Fiscal Periods Ending November 2016, May 2017 and November 2017 Item Calculation Period Assumption ending November 2016 (1st fiscal period: from March 29, 2016, to November 30, 2016) (247 days) (2nd fiscal period: from December 1, 2016, to May 31, 2017) (182 days) ending November 2017 (3rd fiscal period: from June 1, 2017, to November 30, 2017) (183 days) The 1st fiscal period actually commenced from the scheduled asset acquisition date (September 1, 2016) and continues until November 30, 2016 (91 days). Managed Assets It is assumed that the Investment Corporation will acquire on September 1, 2016, the real estate (nine properties in total) scheduled to be newly acquired after the issuance of new investment units, which was resolved at the Investment Corporation s board of directors meeting held today, (these nine properties, the Assets To Be Acquired ) and that the managed assets will not change (any acquisition of new assets or any sale of existing properties, etc.) until the end of the fiscal period ending November The managed assets may actually change due to an acquisition of assets other than the Assets To Be Acquired, the sale of assets under management, etc. Lease operations revenue from the Assets To Be Acquired is calculated based on information on performance provided by the current owner of each asset and other information as well as the lease conditions provided for in building lease agreements and building management service agreements that are effective on the scheduled acquisition date and by taking into consideration market trends and other factors. Rent is calculated based on the following assumptions: Operating Revenue [Ooedo-Onsen Monogatari Reoma Resort] Fixed rent: 62,456,896 yen monthly (however, 67,479,294 yen monthly until November 2016) Variable rent: This is 0 yen until November 2016 and is 5,181,730 yen monthly from (1) Adjusted GOP (Note 1) for the most recent one-year period 5.0% (yearly; the (2) If 64.0% of the adjusted GOP exceeds one year s fixed rent, variable rent will 3

4 Primary rent (Note 2) Fixed rent (Note 3) Variable rent (Note 4) Secondary rent (Note 5) Total Note 1: Note 2: Note 3: Note 4: Note 5: GOP means gross operating profit, which is the amount remaining after deducting expenses arising directly from managing each facility, such as labor expenses and general and administrative expenses, from each facility s sales. Adjusted GOP is the amount remaining after deducting expenses related to real estate to be borne by the tenant (including, but not limited to, taxes and public charges, non-life insurance premiums and land and house rent, but excluding an amount equivalent to Secondary rent (defined below in Note 5)) from the GOP of each facility for the Adjusted GOP Calculation Period (defined below in Note 4). The same applies hereinafter. Primary rent means the sum of the fixed rent and the variable rent. The same applies hereinafter. Fixed rent means the monthly amount provided for in each facility s lease agreement. The same applies hereinafter. Variable rent will not accrue for the 1st fiscal period, and the variable rent for the 2nd fiscal period will be the fixed amount provided for in each facility s lease agreement. Further, the variable rent from the 3rd fiscal period onward will be the amount obtained by multiplying each facility s adjusted GOP for the most recent one-year period (for the six months starting from December of each year, this means the one-year period from March of that year to February of the following year; for the six months starting from June of each year, this means the one-year period from September of the previous year to August of that year) (these one-year periods are referred to as Adjusted GOP Calculation Periods ) regarding each facility by the specific rate provided for in each lease agreement (yearly; the. The same applies hereinafter. Secondary rent means an amount equivalent to the total amount of taxes, public charges, nonlife insurance premiums, and other expenses (real estate operational expenses) to be borne by the Investment Corporation for each facility owned by the Investment Corporation. The same applies hereinafter. With regard to Ooedo-Onsen Monogatari Reoma Resort, a fixed-term land lease agreement has been executed with the tenant, and it is assumed that the Investment Corporation will receive a separate rent based on that fixed-term land lease agreement. 4

5 [Ooedo-Onsen Monogatari Ise-shima] Fixed rent: 18,009,399 yen monthly (however, 18,948,490 yen monthly until November 2016) Variable rent: This is 0 yen until November 2016 and is 962,993 yen monthly from (1) Adjusted GOP for the most recent one-year period 4.0% (yearly; the (2) If 77.0% of the adjusted GOP exceeds one year s fixed rent, variable rent will Primary rent Fixed rent Variable rent Secondary rent Total [Ito Onsen Hotel New Okabe] Fixed rent: 12,296,799 yen monthly (however, 13,644,591 yen monthly until November 2016) Variable rent: This is 0 yen until November 2016 and is 1,471,251 yen monthly from (1) Adjusted GOP for the most recent one-year period 5.0% (yearly; the (2) If 52.0% of the adjusted GOP exceeds one year s fixed rent, variable rent will Primary rent Fixed rent Variable rent Secondary rent Total

6 [Ooedo-Onsen Monogatari Atami] Fixed rent: 15,619,380 yen monthly (however, 16,432,681 yen monthly until November 2016) Variable rent: This is 0 yen until November 2016 and is 939,716 yen monthly from (1) Adjusted GOP for the most recent one-year period 4.0% (yearly; the (2) If 74.0% of the adjusted GOP exceeds one year s fixed rent, variable rent will Primary rent Fixed rent Variable rent Secondary rent Total [Ooedo-Onsen Monogatari Toi Marine Hotel] Fixed rent: 9,098,235 yen monthly (however, 10,090,632 yen monthly until November 2016) Variable rent: This is 0 yen until November 2016 and is 1,016,579 yen monthly from (1) Adjusted GOP for the most recent one-year period 7.0% (yearly; the (2) If 72.0% of the adjusted GOP exceeds one year s fixed rent, variable rent will Primary rent Fixed rent Variable rent Secondary rent Total

7 [Ooedo-Onsen Monogatari Awara] Fixed rent: 10,963,033 yen monthly (however, 11,531,263 yen monthly until November 2016) Variable rent: This is 0 yen until November 2016 and is 608,360 yen monthly from (1) Adjusted GOP for the most recent one-year period 3.0% (yearly; the (2) If 62.0% of the adjusted GOP exceeds one year s fixed rent, variable rent will Primary rent Fixed rent Variable rent Secondary rent Total [Ooedo-Onsen Monogatari Kamoshika-so] Fixed rent: 5,953,916 yen monthly (however, 6,596,944 yen monthly until November 2016) Variable rent: This is 0 yen until November 2016 and is 655,836 yen monthly from (1) Adjusted GOP for the most recent one-year period 6.0% (yearly; the (2) If 62.0% of the adjusted GOP exceeds one year s fixed rent, variable rent will Primary rent Fixed rent Variable rent Secondary rent Total

8 [Ooedo-Onsen Monogatari Ikaho] Fixed rent: 6,126,558 yen monthly (however, 6,788,768 yen monthly until November 2016) Variable rent: This is 0 yen until November 2016 and is 708,097 yen monthly from (1) Adjusted GOP for the most recent one-year period 7.0% (yearly; the (2) If 67.0% of the adjusted GOP exceeds one year s fixed rent, variable rent will Primary rent Fixed rent Variable rent Secondary rent Total [Ooedo-Onsen Monogatari Kimitsu-no-mori] Fixed rent: 4,098,412 yen monthly (however, 4,535,272 yen monthly until November 2016) Variable rent: This is 0 yen until November 2016 and is 436,860 yen monthly from (1) Adjusted GOP for the most recent one-year period 5.0% (yearly; the (2) If 52.0% of the adjusted GOP exceeds one year s fixed rent, variable rent will Primary rent Fixed rent Variable rent Secondary rent Total

9 Operating revenue is based on the assumption that no tenant will delay its payment of rent or not pay its rent. Operating Expenses Non-operating Expenses Borrowings Of the expenses related to leasing activities, which are a major component of operating expenses, the expenses other than the depreciation of the Assets To Be Acquired are calculated based on information provided by the current owner of each asset as well as past actual figures and by reflecting factors that cause expenses to fluctuate. Generally, fixed asset taxes, city planning taxes, and other taxes for the sale and purchase of real estate and the like are calculated on a pro rata basis and settled at the acquisition date. However, at the Investment Corporation, for the fiscal period ending November 2016, an amount equivalent to the settlement money for the Assets To Be Acquired will not be expensed, as it is included in the acquisition cost to the Investment Corporation, and for the fiscal period, the amount for only a certain period will be expensed. Given the above, fixed asset taxes, city planning taxes, and other taxes for fiscal 2017 will be expensed from the fiscal period. The total amount of fixed asset taxes, city planning taxes, and other taxes included in the acquisition cost of the Assets To Be Acquired is expected to be 51 million yen (an amount equivalent to taxes for 122 days). If the fixed assets taxes, city planning taxes, and other taxes are expensed, the amount that would have been affected due for those is expected to be 38 million yen (an amount equivalent to taxes for 91 days) for the fiscal period ending November 2016 and 38 million for the fiscal period. The fiscal period ending November 2017 will not be affected in this case. Building repair expenses are not expected to arise, as these expenses will, in principle, be borne by the tenant based on the lease agreement effective on the scheduled acquisition date of the Assets To Be Acquired. Depreciation, which is calculated using the straight-line method inclusive of incidental expenses, is expected to be 129 million yen for the fiscal period ending November 2016, 259 million yen for the fiscal period, and 260 million yen for the fiscal period ending November As one-time expenses in the fiscal period ending November 2016, it is expected that the Investment Corporation s initial expenses will be 55 million yen and its expenses for the issuance, listing, and offering of new investment units, which was resolved at the Investment Corporation s board of directors meeting held today, will be 126 million yen; and both of these expenses will be fully amortized in the fiscal period ending November The total amount of interest expenses and other borrowing-related expenses is expected to be 54 million yen for the fiscal period ending November 2016, 103 million yen for the fiscal period, and 98 million yen for the fiscal period ending November It is assumed that a total amount of 12,380 million yen will be borrowed on August 31, 2016, from the qualified institutional investors set out in Article 2.3(1) of the Financial Instruments and Exchange Act and that part of the loan will be repaid in the fiscal period ending November 2016 with the proceeds from the issuance of new investment units by third-party allotment (up to 8,710 units) stated below in Outstanding Investment Units. 9

10 As consumption tax is expected to be refunded during the fiscal period ending May 2017, it is assumed that 1,401 million yen of loans will be repaid at the end of May In order to increase revenue by reducing LTV and interest payments, the Investment Corporation will apply part of the amount recorded as depreciation for each fiscal period to amortization (dispersed repayment of loans). Therefore, it is assumed that scheduled repayments of 111 million yen, 111 million yen, and 111 million yen will be conducted in the fiscal periods ending November 2016, May 2017 and November 2017, respectively. It is assumed that the total amount of interest-bearing debt at the end of the fiscal periods ending November 2016, May 2017 and November 2017 will be 11,397 million yen, 9,884 million yen and 9,773 million yen, respectively. The LTV at the end of the fiscal periods ending November 2016, May 2017 and November 2017 is expected to be approximately 37.8%, 34.1% and 33.8%, respectively. The following formula is used to calculate LTV: LTV = total interest-bearing debt total assets 100 The LTV may change depending on the number, or issue price, of new investment units to be issued this time. Outstanding Investment Units Distribution Per Unit (Excluding Optimal Payable Distribution) Optimal Payable Distribution Per Unit Other It is assumed that, in addition to the 2,000 units outstanding as of today, the total maximum number of 182,910 investment units to be newly issued by the issuance of new investment units through public offering (174,200 units) and the issuance of new investment units by third-party allotment (up to 8,710 units), which was resolved at the Investment Corporation s board of directors meeting held today, will all be issued. It is assumed that, excluding the above, the number of investment units will not change due to any issuance of new investment units or another reason before the end of the fiscal period ending November Distribution per unit (excluding optimal payable distribution) is calculated based on the expected number of investment units outstanding for the fiscal periods ending November 2016, May 2017, and November 2017 (184,910 units for each of these periods), and this number of units includes the total maximum number of 182,910 investment units scheduled to be newly issued as stated above. Distribution per unit (excluding optimal payable distribution) is calculated based on the policy for cash distributions provided for in the Investment Corporation s articles of incorporation. Distribution per unit (excluding optimal payable distribution) may change due to various factors, including changes of portfolio, changes in rent revenue due to a relocation of tenant or a similar reason, the occurrence of unexpected repairs, and other reasons. There is no plan at this time to distributing cash in excess of earnings (optimal payable distribution per unit). It is assumed that a revision that affects the above forecast figures will not be made to laws or ordinances, tax systems, accounting standards, Securities Listing Regulations 10

11 or the like set by TSE, or rules or the like set by The Investment Trusts Association, Japan. It is assumed that unforeseen material changes in general economic trends, in real estate market conditions, or in any other factors will not occur. 11