NTT UD REIT’s latest half-year shows why a REIT’s top line is only the first pass. Operating revenue in the six months to April 30 slipped 1.8% to ¥13.0bn, yet net income climbed 31.7% to ¥5.1bn and the distribution per unit held at ¥3,140. The filing says profit was helped by a ¥1.24bn gain on the partial sale of a Shinbashi office property. That payout was still lower than per-unit earnings of ¥3,484 because the REIT transferred ¥505mn into a compressed reserve rather than distributing it.
| Item | Detail |
|---|---|
| Six months to April 30 revenue | ¥13.0bn, down 1.8% |
| Six months to April 30 net income | ¥5.1bn, up 31.7% |
| Current distribution per unit | ¥3,140 |
| Next two distribution guides | ¥3,100 for the period ending October 2026, and ¥3,100 for the period ending April 2027 |
| New Osaka asset | Mirage Palace Namba Curva, ¥1.05bn purchase price, handover due July 31 |
| Refinancing loan | ¥2.0bn from Mizuho Bank, maturity June 30, 2027, one-month JPY TIBOR + 0.14% |
| Buyback plan | Up to 22,000 units, or 1.50%, and up to ¥2.0bn, from June 18 to October 23, with cancellation of all acquired units |
That reserve is also doing work in the outlook. NTT UD REIT forecasts DPU of ¥3,100 for both the period ending October 2026 and the one ending April 2027, even as it guides operating revenue down to ¥12.1bn and then ¥11.9bn, with net income at ¥4.4bn and ¥4.3bn. The company says those payout forecasts assume reserve reversals of ¥102mn and ¥264mn respectively, and are not guarantees.
Operationally, the portfolio still looks full rather than flashy. The REIT ended April with 62 assets carrying a total acquisition price of ¥295.3bn. Office occupancy rose 0.8 percentage point from the previous period to 99.8%, residential occupancy slipped 0.3 point to 96.6%, and overall occupancy excluding the preferred security improved to 98.6%. After the balance-sheet date, it agreed to buy Mirage Palace Namba Curva, a 54-unit residential building in Osaka’s Naniwa Ward, for ¥1.05bn, versus a ¥1.1bn appraisal, with handover due July 31 and payment from cash on hand. Management says the deal is part of a portfolio-quality push, including lowering portfolio age.
The same-day capital notices matter because they show how management wants to use that cash. A new ¥2.0bn one-year loan from Mizuho Bank, priced at one-month JPY TIBOR plus 0.14%, simply refinances debt due on June 30 and leaves total interest-bearing debt unchanged at ¥147.25bn. More consequential is the buyback: NTT UD REIT plans to repurchase up to 22,000 units, or 1.50% of units outstanding, for as much as ¥2.0bn between June 18 and October 23, then cancel all acquired units within the current period ending October 2026. One important caveat for unitholders: the published forecasts explicitly assume no change in units outstanding and do not yet reflect that repurchase or cancellation.