Global One Real Estate Investment : Summary of Financial Results for the Six-Month Period Ended March 2023

Global One Real Estate Investment Corp.

Summary of Financial Results for the Six-Month Period Ended March 2023

18 May 2023

REIT Issuer:	Global One Real Estate Investment Corp.
Stock Exchange Listing:	Tokyo Stock Exchange
Securities code:	8958
Website:	https://www.go-reit.co.jp/en/
Representative:	Akio Uchida, Executive Director
Asset Manager:	Global Alliance Realty Co., Ltd.
Representative:	Kazunori Yamauchi, President
Contact:	Gen Yamazaki, General Manager
	REIT Finance Department
	Tel: [phone]
Scheduled date for filing of securities report:	27 June 2023
Scheduled date for dividends payments:	15 June 2023
Explanatory material to be prepared:	Yes
Analyst meeting to be convened:	Yes

• Amounts of less than one million yen are rounded down.

1. Financial summary for the six-month period ended March 2023 (1 October 2022 - 31 March 2023)

(1) Earning Position

			(Percentages indicate rate of change from previous six-month period)
	Operating revenue	Operating profit	Ordinary profit		Net income
	Million yen	%	Million yen	%	Million yen	%	Million yen	%
Six-month period	6,664	17.1	3,341	24.7	2,924	27.5	2,923	27.5
ended March 2023
Six-month period	5,691	0.6	2,679	1.3	2,293	1.7	2,292	1.7
ended Sept 2022
	Net income	Ratio of net income	Ordinary profit		Ordinary profit
	per unit		to net assets		to total assets		to operating revenue
		Yen		%		%		%
Six-month period		2,935		2.9		1.4		43.9
ended March 2023
Six-month period		2,415		2.4		1.2		40.3
ended Sept 2022

(Note) Net income per unit is calculated by dividing net income by the weighted average number of investment units based on the number of days (948,996 units for the six-month period ended September 2022 and 996,131 units for the six- month period ended March 2023).

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1. Dividend distributions

	Dividend per unit	Total dividends	Dividend in excess of	Total dividends in
	(excluding dividends	(excluding dividends
	profit per unit	excess of profit
	in excess of profit)	in excess of profit)
	Yen	Million yen	Yen	Million yen
Six-month period	2,860	2,925	－	－
ended March 2023
Six-month period	2,426	2,302	－	－
ended Sept 2022
	Payout ratio	Dividend ratio
	to net assets
	%	%
Six-month period	100.0	2.8
ended March 2023
Six-month period	100.4	2.4
ended Sept 2022

(*1) Payout ratio is calculated using the following formula:

Payout ratio = Total dividends (excluding dividends in excess of profit) / Net income × 100

(*2) Dividend for the six-month period ended September 2022 is calculated by adding reversal of reserve for reduction entry (9 million yen) to unappropriated retained earnings, and dividing the amount by the number of investment units issued .

(*3) Dividend for the six-month period ended March 2023 is calculated by adding reversal of reserve for reduction entry (1 million yen) to unappropriated retained earnings, and dividing the amount by the number of investment units issued .

(3) Financial position
		Total assets	Net assets	Net assets	Net assets per unit
		to total assets
		Million yen	Million yen	%	Yen
	Six-month period	209,923	103,449	49.3	101,141
	ended March 2023
	Six-month period	198,847	95,212	47.9	100,330
	ended Sept 2022

(4) Cash flows

	CF from	CF from	CF from	Cash and cash
	equivalents at the end
	operating activities	investing activities	financing activities
	of period
	Million yen	Million yen	Million yen	Million yen
Six-month period	9,342	-17,893	7,687	9,409
ended March 2023
Six-month period	3,163	-307	-2,309	10,272
ended Sept 2022

2. Earnings forecasts for the six-month period ending September 2023 (1 April 2023 - 30 September 2023) and earnings forecasts for the six-month period ending March 2024 (1 October 2023 - 31 March 2024)

			(Percentages indicate rate of change from previous six-month period)
	Operating revenue	Operating profit	Ordinary profit	Net income
	Million yen	%	Million yen	%	Million yen	%	Million yen	%
Six-month period	7,252	8.8	3,740	11.9	3,311	13.2	3,310	13.2
ending Sept 2023
Six-month period	7,216	-0.5	3,796	1.5	3,361	1.5	3,360	1.5
ending March 2024

Dividend per unit	Dividend in excess of profit per unit
(excluding dividends in excess of profit）

Six-month period ending Sept 2023

Six-month period ending March 2024

Yen	Yen
3,038	－
2,959	－

(Reference)	Six-month period	Six-month period
	ending Sept 2023	ending March 2024
Projected net income per unit	3,236 yen	3,285 yen

1. Dividend per unit is calculated on the premise that the amount remaining after deducting the reserve for reduction entry (203 million yen for the six-month period ending September 2023 and 334 million yen for the six-month period ending March 2024) from net income will be distributed.

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*Others

1. Changes in accounting policies, changes in accounting estimates and restatements of revisions

(a) Changes in accounting policies due to amended Accounting Standards	None
(b) Changes in accounting policies due to other factors	None
(c) Changes in accounting estimates	None
(d) Restatements of revisions	None

1. Number of units issued and outstanding
2. 1. Number of units issued and outstanding at the end of the period (including own units):

For the six-month period ended March 2023	1,022,826
For the six-month period ended September 2022	948,996
(b) Number of own units at the end of the period:
For the six-month period ended March 2023	0
For the six-month period ended September 2022	0

*This Summary of Financial Results is not subject to audit procedures by a certified public accountant or an audit firm.

* Special notes (Forward-looking Statements)

Forward-looking statements in this presentation (i.e., earnings forecasts) are based on information currently available and certain assumptions GOR believes reasonable. Actual results may differ materially from the forward-looking statements in this presentation due to various factors. The forecasts contained in this document are "current" as of the date of this release, based on the assumptions on page 10 ("Assumptions underlying earnings forecasts for the six-month period ending September 2023 (the 40th Period) and the six-month period ending March 2024 (the 41st Period)"). Actual results (i.e., operating revenue, operating profit, ordinary profit, net income, dividend per unit) may differ depending on various factors. The forecasts do not guarantee the amounts of future dividends.

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1. Operation results

1. Operation results
   I. Overview of the six-month period ended March 2023 (the "39th Period")

A. Historical background

16 April 2003: Global One Real Estate Investment Corp. ("GOR") was established by Global Alliance Realty Co., Ltd. ("GAR") as a J-REIT under the Act on Investment Trusts and Investment Corporations of Japan (the "Investment Trusts Act"). The total investment amount was 200 million yen, or 400 units, at the time of incorporation.

28 May 2003: Corporate registration was completed with the Kanto Local Finance Bureau (Registration No. 20, granted by the Director-General of the Kanto Local Finance Bureau).

25 September 2003: GOR achieved an IPO on the Real Estate Investment Trust Section of the Tokyo Stock Exchange (Securities Code: 8958) where an additional 48,000 units were issued and 23,623 million yen in funds were raised.

GOR has completed its accounting closing for the 39th Period.

1. Investment environment and operation results
   In the 39th Period, the Japanese economy gradually recovered although some weaknesses were seen.
   In Tokyo's office building rental market, vacancies that were eliminated due to relocations for upgrading and locational improvement and relocations for the purpose of office expansion exceeded the vacancies that newly occurred as a result of floor reduction and integration, resulting in a decline in vacancy rates for the first time in approximately three years. However, the small volume of new supply had a significant impact, and office demand is yet to recover. More companies intend to improve their office environment in order to promote work attendance and prevent turnover, but the area used per single tenant is decreasing. Such decrease has caused the stagnation of the elimination of vacancies.
   In the office building transaction market, even in a phase of global interest rate hikes, the investment appetite of investors remains robust. Since information on Class A office buildings for sale is limited, the environment of property acquisitions is still severe and transaction prices remain high.
   Going forward, GOR will pay utmost attention to rental market conditions, the trend of the real estate transaction market, and changes in the financial environment .

(a) Acquisitions and transfers in portfolio

GOR transferred part of Otemachi First Square (25% of co-ownership in trust beneficial interests in real estate, transfer price: 6,750 million yen) on 6 December 2022 and acquired THE PEAK SAPPORO (acquisition price: 17,000 million yen) on 7 December 2022 as outlined in the next page.

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<Summary of the transfer>

Name of building	Otemachi First Square
Location	(Residence	1-5-1, Otemachi, Chiyoda-ku, Tokyo
indication)
Land area (*1)	Total land area: 10,998.97 sqm
Of which, the area of the subject parcel of land: 1,088.61 sqm
Floor area (*1)	Total floor area of the entire building: 141,228.06 sqm
Floor area of subject section: 9,235.43 sqm
		Trust beneficial interests
		Land : Ownership (3 of the 7 parcels of the total land area)
		Building: Sectional ownership and co-ownership of sectional
		ownership
Transferred asset	1st transfer	25	%
2nd transfer	30	%
		3rd transfer	30	%
		4th transfer	10	%
		5th transfer	5	%
Contract date	24 October 2022
		1st transfer	6 December 2022
		2nd transfer	25 September 2023 (scheduled)
Dates of transfer	3rd transfer	25 March 2024 (scheduled)
		4th transfer	25 September 2024 (scheduled)
		5th transfer	23 October 2024 (scheduled)
		Total 27,000 million yen
		1st transfer	6,750 million yen
Transfer price (*2)	2nd transfer	8,100 million yen (scheduled)
3rd transfer	8,100 million yen (scheduled)
		4th transfer	2,700 million yen (scheduled)
		5th transfer	1,350 million yen (scheduled)
		888 million yen of gain on sale of real estate was recorded as operating
Material	impact on	revenue during the six-month period ended March 2023.
earnings		1,108 million yen of gain on sale of real estate will be recorded as operating
		revenue during the six-month period ending September 2023.
Transferee		DAIBIRU CORPORATION

(*1) "Land area" and "floor area" are shown based on the registration, unless otherwise stated.

(*2) The transfer price represents the prices described in the purchase agreement, excluding related expenses, settlement amount of property tax and city planning tax, consumption tax and local consumption tax.

<Summary of the asset acquired>

Name of building	THE PEAK SAPPORO
Type of specified assets	Trust beneficial interests in real estate
Location	(Indication of	3-23-1,Kita-Jujo-Nishi,Kita-ku, Sapporo City, Hokkaido
registered building)
Land	Ownership	Ownership (Trust beneficial interests)
(*1)	Land area	2,549.13 sqm
	Ownership	Ownership (Trust beneficial interests)
Building	Use	Office and retail
Floor area	12,823.15 sqm
(*1)
Year built	June 2021
	Structure	9-story plus 1 basement level S with flat roof
Contract date	24 October 2022
Acquisition price (*2)	17,000 million yen
Seller		Fuyo General Lease Co., Ltd.

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