Nippon Building Fund (8951) H1 2025 earnings summary

Executive summary

• Achieved high occupancy rate of 98.9% for 1H 2025, with rental revenues from base properties up 1.4% period-over-period and 4.1% year-over-year.

• Total operating revenues for the six months ended June 30, 2025, were ¥51,218 million, up 0.8% year-over-year.

• Net income rose 3.9% year-over-year to ¥23,545 million, with net income per unit at ¥2,768.

• Distribution per unit increased to ¥2,495, a 1.3% rise from the previous period.

• Strategic property acquisitions and dispositions contributed to internal and external growth, including new assets in Yokohama and Toyama.

Financial highlights

• Operating income increased by 4.2% to ¥25,073 million, and net income rose 4.3% to ¥18,698 million period-over-period.

• Ordinary income was ¥23,546 million, a 3.9% increase year-over-year.

• NOI from property leasing activities grew 2.9% to ¥30,172 million.

• NAV per unit reached ¥123,167, and LTV stood at 42.6%.

• Cash flow from operating activities was ¥56,138 million; cash and cash equivalents at period end were ¥12,932 million.

Outlook and guidance

• Forecasts for 2H 2025 and 1H 2026 expect real estate rental revenues to rise 4.5% and 0.5% respectively, with average occupancy rates maintained above 98%.

• Operating income is projected to decrease by 16.4% in 2H 2025 due to lower profits from dispositions, but stabilize in 1H 2026.

• EPU and DPU growth targeted at 3% annually, driven by internal and external growth.

• For the period ending December 31, 2025, operating revenues are forecast at ¥48,470 million, with net income of ¥19,030 million and distribution per unit of ¥2,420.

• For the period ending June 30, 2026, operating revenues are forecast at ¥48,315 million, net income at ¥19,247 million, and distribution per unit at ¥2,448.