Global One Real Estate Investment : Summary of Financial Results for the Six-Month Period Ended September 2022

Global One Real Estate Investment Corp.

Summary of Financial Results for the Six-Month Period Ended September 2022

17 November 2022

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:	22 December 2022
Scheduled date for dividends payments:	15 December 2022
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 September 2022 (1 April 2022 - 30 September 2022)

(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	5,691	0.6	2,679	1.3	2,293	1.7	2,292	1.7
ended Sept 2022
Six-month period	5,655	-1.8	2,644	-3.5	2,255	-4.2	2,254	-4.2
ended March 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		2,415		2.4		1.2		40.3
ended Sept 2022
Six-month period		2,358		2.3		1.1		39.9
ended March 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 (955,998 units for the six-month period ended March 2022 and 948,996 units for the six-month period ended September 2022).

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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	2,426	2,302	－	－
ended Sept 2022
Six-month period	2,411	2,288	－	－
ended March 2022
	Payout ratio	Dividend ratio
	to net assets
	%	%
Six-month period	100.4	2.4
ended Sept 2022
Six-month period	101.5	2.4
ended March 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 March 2022 is calculated by adding reversal of reserve for reduction entry (33 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 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) Financial position
		Total assets	Net assets	Net assets	Net assets per unit
		to total assets
		Million yen	Million yen	%	Yen
	Six-month period	198,847	95,212	47.9	100,330
	ended Sept 2022
	Six-month period	198,819	95,208	47.9	100,325
	ended March 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	3,163	-307	-2,309	10,272
ended Sept 2022
Six-month period	3,084	525	-4,177	9,726
ended March 2022

2. Earnings forecasts for the six-month period ending March 2023 (1 October 2022 - 31 March 2023) and earnings forecasts for the six-month period ending September 2023 (1 April 2023 - 30 September 2023)

			(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	6,641	16.7	3,418	27.6	2,994	25.1	2,993	30.6
ending March 2023
Six-month period	7,211	8.6	3,887	13.7	3,452	15.3	3,451	15.3
ending Sept 2023

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

Six-month period ending March 2023

Six-month period ending Sept 2023

Yen	Yen
2,860	－
3,038	－

(Reference)	Six-month period	Six-month period
	ending March 2023	ending Sept 2023
Projected net income per unit	2,926 yen	3,374 yen

1. Dividend per unit is calculated on the premise that the amount remaining after deducting the reserve for reduction entry (68 million yen for the six-month period ending March 2023 and 343 million yen for the six-month period ending September 2023) 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 September 2022	948,996
For the six-month period ended March 2022	948,996
(b) Number of own units at the end of the period:
For the six-month period ended September 2022	0
For the six-month period ended March 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 12 ("Assumptions underlying earnings forecasts for the six-month period ending March 2023 (the 39th Period) and the six-month period ending September 2023 (the 40th 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 September 2022 (the "38th 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 38th Period.

1. Investment environment and operation results
   In the 38th Period, the Japanese economy gradually recovered.
   In Tokyo's office building rental market, while there were signs of the rising vacancy rate leveling off, asking rents continued to decline, albeit modestly. Although tenant activity steadily increased, contracts for large spaces seemed to come to a standstill.
   In the office building transaction market, amid the ongoing favourable funding environment, the investment appetite of domestic as well as foreign investors remains robust. Since information on Class A office buildings for sale is still limited, competition over property acquisitions is 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 .

1. 1. Acquisitions and sales in portfolio
      No acquisition or sale was performed in the six-month period ended September 2022.
   2. Portfolio performance
      As of 30 September 2022, the GOR portfolio includes 11 office buildings. The total acquisition price accounts for 191,194 million yen with a total leasable area of 131,843.76 sqm. The overall occupancy rate of the GOR portfolio stands at 96.7% as of the end of the 38th Period.
2. Financing activities
   In order to procure funds, GOR may borrow funds and issue investment corporation bonds, as well as issue investment units. With regard to interest-bearing liabilities, GOR makes it a principle to borrow long-term loans with fixed interest rates from the perspective of managing assets over the long term and reducing the risk of fluctuation in interest rates in the future.

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During the period under review, GOR decided on 9 September 2022 to issue fresh bonds, as described below, in order to repay the Series No. 10 unsecured bonds (3,000 million yen) that expired 28 September 2022. The payment was completed on 27 September 2022.

Name of bond	Series No. 16 unsecured bonds (with pari passu clause) (Green
	Bonds)
Issue amount	3,000 million yen
Issuance price	100 yen per 100 yen face value
Interest rate	0.50% per annum
Date of issuance	27 September 2022
Collateral/guarantee	The bonds were issued on an unsecured and unguaranteed
	basis with no specific assets reserved.
Redemption date and method	The total amount to be redeemed on 27 September 2027. The
	investment corporation bonds may be repurchased and
	cancelled at any time after the date of payment unless otherwise
	specified by the transfer agent.
Ratings	AA- (Japan Credit Rating Agency, Ltd.)

In addition, GOR borrowed 5,000 million yen on 30 September 2022 to execute repayment of existing loans of 5,000 million yen due for repayment on 30 September 2022.

As of 30 September 2022, unitholders' capital (net amount) is 92,401 million yen, the total number of units issued and outstanding is 948,996, the unpaid loan balance is 75,500 million yen, and the total balance of investment corporation bonds issued and outstanding is 18,700 million yen.

GOR's credit rating status as of 30 September 2022 is as follows:

Rating agencies		Rating descriptions
Japan Credit Rating Agency, Ltd.	Long-term Issuer Rating:	AA-
	Outlook:		Stable
	Bond:		AA-

1. 1. Financial results and dividend distributions
      GOR recorded operating revenue of 5,691 million yen, operating profit of 2,679 million yen, ordinary profit of 2,293 million yen, and net income of 2,292 million yen for the 38th Period. Regarding dividends, while anticipating the application of tax exemption (under Article 67 -15 of the Act on Special Measures Concerning Taxation) that will allow profit distributions t o become tax deductible, GOR decided to distribute 2,302 million yen, which is the amount of unappropriated retained earnings after adding 9 million yen of reversal of reserve for reduction entry. As a result, dividend per unit is 2,426 yen.
2. Outlook of the next six-month period ending March 2023
3. 1. Basic policies
      GOR manages and operates its portfolio properties consisting primarily of real estate and other assets (real estate, leasehold rights to real estate or surface rights or beneficial interests of trusts in which only these assets are entrusted among the assets as set forth in Article 105 paragraph 1 of the Ordinance for Enforcement of the Act on Investment Trusts and Investment Corporations of Japan) for investment purposes in accordance with Articles 2 and 20 of "the

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