代表取締役執行役員社長 柏﨑 和義





Kazuyoshi Kashiwazaki
Executive Director
TOKYU REIT, Inc.

 On behalf of TOKYU REIT, I would like to express my sincere appreciation to all of you, our unitholders, for your continued support and patronage to us.
 I hereby report our operating environment and results for the fiscal period ended July 2020.
 First, concerning the impact of COVID-19, most of the retail tenants of our portfolio properties have reopened since the Japanese government’s declaration of a state of emergency was lifted for Tokyo, but some tenants have requested reductions in the amount, exemption, or postponement of rent payments. While offering postponement as the basic response to such requests, we are engaged in individual talks for reduction/exemption with tenants whose current rent exceeds the market rent or other tenants for which there is a certain degree of rationality from the perspective of maximizing cash flow over the medium to long term. In light of the status of talks with tenants, we have projected revenue decreasing by ¥23 million for the fiscal period ended July 2020 (actual), ¥114 million for the fiscal period ending January 2021 (forecast), and ¥24 million for the fiscal period ending July 2021 (forecast).
 In the fiscal period ended July 2020, an increase in revenue due to rent revisions, which included those at Tokyu Toranomon Building and QFRONT, led to revenue from property leasing increasing by ¥40 million from the previous fiscal period. With a decrease in utilities expenses and repairs and maintenance expenses as well, NOI from property leasing increased by ¥241 million from the previous fiscal period. In addition, we acquired KN Jiyugaoka Plaza (51% quasi-co-ownership interest) and sold TOKYU REIT Akasaka Hinokicho Building (51% quasi-co-ownership interest) through the property replacement with ORIX JREIT Inc. that had been agreed upon in the previous fiscal period. As a result, gain on sale of real estate of ¥703 million and provision of reserve for reduction entry of ¥384 million were posted in the fiscal period ended July 2020.
 The above resulted in operating income of ¥4,325 million (increase of 275 million from the previous fiscal period), net income of ¥3,855 million (increase of ¥275 million from the previous fiscal period) and net income per unit of ¥3,944 (increase of ¥282 from the previous fiscal period). After retaining a portion as provision of reserve for reduction entry, distribution per unit will be ¥3,551 (increase of ¥253 from the previous fiscal period).
 As for subsequent fiscal periods, in September 2020, we entered into an agreement for disposition of OKI System Center (land with leasehold interest) in Warabi City, Saitama, and acquisition of OKI Business Center No.5 in Minato Ward, Tokyo. The asset for acquisition was acquired all at once in September 2020. In the case of the asset for disposition, 40% interest was disposed in September 2020, and 30% interest is scheduled to be disposed in each of December 2021 and February 2022.
 In the fiscal period ending January 2021 and the fiscal period ending July 2021, despite the impact of COVID-19 being a factor decreasing revenue, the new acquisition, rent revisions at properties, and other factors increasing revenue are expected to lead to increase in NOI from property leasing. In addition, gain on sale of real estate of ¥760 million and provision of reserve for reduction entry of ¥382 million, which are the amounts for the 40% interest in OKI System Center (land with leasehold interest), are expected to be posted in the fiscal period ending January 2021. Gain on sale of real estate is forecast to decrease in the fiscal period ending July 2021 as we have no property dispositions planned. The forecast is distribution per unit of ¥3,520 (decrease of ¥31 from the previous fiscal period) for the fiscal period ending January 2021 and ¥3,210 (decrease of ¥310 from the previous fiscal period) for the fiscal period ending July 2021.
 TOKYU REIT will continue to strive to maximize unitholder value through “investment in highly competitive properties in areas with strong growth potential.”
 TOKYU REIT greatly appreciates your continued support.

September 2020