We express our deep appreciation for the ongoing concern that our unitholders have for ORIX JREIT Inc., and ORIX Asset Management Corporation.
We offer our deepest sympathies to all those who have been affected by the Great East Japan Earthquake (“the Earthquake”), and we hope for the earliest possible recovery and reconstruction.
We are pleased to report the business performance of OJR for the 19th period to our unitholders, as follows:
The Japanese economy has been stagnant during the 19th period due to the continuing deterioration of the European debt crisis since this summer as well as sluggish domestic production as a result of the Earthquake and Fukushima nuclear power plant crisis. Nevertheless, we recently began to see some signs of recovery.
In the office leasing market, the vacancy rate for Tokyo business districts remained high at 8% range (research by Miki Shoji Co., Ltd.), while the average rent continued to slide moderately. It will still take some more time for business sentiment to return to pre-earthquake levels, and recruiting activities remain flat. Accordingly, we expect the office leasing market will remain stagnant for the time being. Meanwhile, the real estate sales market began to recover from a temporary lull following the Earthquake. The major market players, including J-REITs, are now actively engaging in real estate transactions.
Against such backdrop, OJR raised approximately 13 billion yen through a public offering of additional investment units for the first time in about four years and acquired a total of six properties (an office building and five residential properties that can expect stable revenue for the medium to long term) during the 19th period. We are acquiring properties on a continuous basis after the public offering of investment units, driving steady expansion of assets and improvement in the quality of our asset portfolio.
As a result of these efforts, we generated 11,533 million yen in operating revenues, 4,963 million yen in operating income, and 3,309 million yen in net income. The distribution per unit was 12,571 yen. As of October 21, 2011, the announcement date of the 19th period financial results, OJR holds a portfolio of 63 properties with a total acquisition price of 342,271 million yen.
Although minor damage to some of the properties that OJR owns was discovered as a result of the Earthquake, it has been confirmed that there were no casualties or physical damage that will have a major impact on OJR’s business operations. OJR recorded a 109 million yen extraordinary loss as a restoration expense related to the Earthquake for this period.
OJR intends to achieve further growth by flexibly and promptly responding to changes in the business environment, and aims to achieve stable distributions and an increase in the asset value of our portfolio over the medium to long term.
We thank all our unitholders and look forward to your continued support and encouragement.
(As of October 21, 2011)
