Steadily Growing Dividends While Strengthening the Earnings Structure
Frontier Real Estate Investment Corporation ("FRI") is a REIT specializing in retail facilities and was listed on the Real Estate Investment Trust Market (the J-REIT market) of the Tokyo Stock Exchange in August 2004. Mitsui Fudosan has served as the sponsor of FRI since March 2008, when it replaced the previous sponsor, Japan Tobacco. FRI invests in diverse retail facilities in cities throughout Japan. Since FRI's listing, we have steadily built a solid management track record, aiming to secure stable earnings over the medium to long term.
Contents
2
Highlights
22
Financial Section
4
6
8
To Our Stakeholders / Topics Asset Size and Distributions Portfolio
23 38 57
Management's Discussion and Analysis
Audited Financial Statements
Independent Auditor's Report
10
12
Sustainability Initiatives Corporate Governance
60 61
FRI and the Asset Management Company Investor Information
15
FRI's Investment Policy / Distribution Policy
Disclaimer
All content presented in this semi-annual report is provided solely for informational purposes with regard to Frontier Real Estate Investment Corporation (FRI) and is not intended to serve as an inducement or solicitation to trade in any product offered by FRI. Investment units issued by FRI are subject to price fluctuations due to various factors, including: (1) volatile conditions in the J-REIT market, interest rates and the real estate market; (2) fluctuations in rental revenues from properties; and (3) the occurrence of unexpected losses due to natural disasters. Accordingly, investment in FRI entails the risk of incurring a loss. Investment decisions are made at the investors' discretion and are their responsibility as well as at their own risk. FRI disclaims any responsibility or liability for the consequences of investing in FRI.
Forward-Looking Statements
Except for historical information, matters discussed in this report are forward-looking statements and are based on management's estimates, assumptions, and projections. Forward-looking statements, such as business forecasts, should not be construed as commitments to or guarantees of future performance. They are based on judgments made using information obtained at the time of publication, and thus contain risks and uncertainties.
Please be advised that forward-looking statements provided herein may be subject to change without prior notice. Furthermore, FRI assumes no obligation to update any forward-looking statements in this semi-annual report as a result of new information or future events.
Highlights
37th Period (July 1 to December 31, 2022) Financial Highlights
The distribution per unit for the 37th fiscal period was ¥11,122. During the 37th fiscal period, we promoted initiatives aimed at reinforcing our portfolio of existing properties. To ensure financial soundness, we maintained prudent financial operations through careful LTV control and continued to receive high ratings.
We forecast distributions per unit of ¥10,990 and ¥10,500, respectively, for the 38th and 39th fiscal periods.
Loan-to-value (LTV) ratio
Appraisal-based LTV
44.0%
35.3%
Average interest rate on borrowings
Average remaining maturity of borrowings
0.44%
4.66years
Net asset value per unit
¥468,555
Ratings
AA- /Stable
Rating and Investment Information, Inc.
Issuer rating
AA /StableA+ /Stable ;A-1 /Stable
Japan Credit Rating Agency, Ltd.
Long-term issuer rating
S&P Global Ratings Japan Inc. Long-term corporate credit; Short-term corporate credit
For the six month periods ended | June 30, 2022 (36th Period) | December 31, 2022 (37th Period) | June 30, 2023 (38th Period) Forecast* | December 31, 2023 (39th Period) Forecast* |
Operating revenue | ¥11,523million | ¥11,432million | ¥11,581million | ¥10,953million |
Net income | ¥6,022million | ¥6,049million | ¥6,046million | ¥5,542million |
Distribution per unit | ¥11,117 | ¥11,122 | ¥10,990** | ¥10,500*** |
* Forecasts for the 38th and 39th periods (ending June 30, 2023, and December 31, 2023, respectively) given here are as announced in "Summary of Financial Results for the 37th Fiscal Period," published on February 15, 2023.
**The forecast distribution per unit for the 38th fiscal period (ending June 30, 2023) is calculated based on the assumption that the Investment Corporation will distribute net income less ¥101 million (the difference between the reversal of reserve for reduction entry and the reserve for reduction entry recorded).
***
The forecast distribution per unit for the 39th fiscal period (ending December 31, 2023) is calculated based on the assumption that the Investment Corporation will distribute the sum of net income and an additional ¥142 million arising from the reversal of reserve for reduction entry.
37th Period Portfolio Highlights
Asset size
¥357.6billion
(Total acquisition price)
Number of properties
39properties
Appraisal value
¥390.1billion
Unrealized gain
¥78.9billion
Occupancy rate
99.9%
Green Building certified
83.4%
(Floor area basis)
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Disclaimer
Frontier Real Estate Investment Corporation published this content on 31 March 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 31 March 2023 07:23:10 UTC.