February 7, 2022
For Immediate Release
Real Estate Investment Trust Securities Issuer
1-6-5 Marunouchi, Chiyoda-ku, Tokyo
Mitsubishi Estate Logistics REIT Investment Corporation
Representative: | Ken Takanashi, Executive Director |
(Securities Code: 3481) | |
Asset Management Company | |
Mitsubishi Jisho Investment Advisors, Inc. | |
Representative: | Haruhiko Araki, President & CEO |
Contact: | Ken Takanashi, Director, General Manager, |
Logistics REIT Management Department |
TEL: +81-3-3218-0030
Notice Concerning Revisions to Forecast for the Fiscal Period Ending August 31, 2022, and
Forecast for the Fiscal Period Ending February 28, 2023
Mitsubishi Estate Logistics REIT Investment Corporation ("MEL") announces today revisions to its forecast for the fiscal period ending August 31, 2022 (March 1, 2022 to August 31, 2022) as noted in "Summary of Financial Results for the Fiscal Period Ended August 31, 2021 (REIT)" announced on October 15, 2021. In addition, MEL announces today its new forecast for the fiscal period ending February 28, 2023 (September 1, 2022 to February 28, 2023). The revisions and calculations are described below. For the avoidance of doubt, there is no change in the forecast for the fiscal period ending February 28, 2022 (September 1, 2021 to February 28, 2022) as noted in "Summary of Financial Results for the Fiscal Period Ended August 31, 2021 (REIT)" announced on October 15, 2021.
1. Reasons for Revision and Announcement
A resolution was passed at MEL's board of directors meeting held today concerning the issuance of new investment units to appropriate the portion of funds for acquiring the Two New Properties (as defined in "Assets Under Management" in Attachment 1, "Forecast Assumptions for the Fiscal Periods Ending August 31, 2022 and February 28, 2023."). The forecast of operating results for the fiscal period ending August 31, 2022, announced on October 15, 2021, has been revised due to the changes in the assumptions underlying the calculation of estimated operating revenues, which are expected to change by 10% or more, estimated operating income, which are expected to change by 30% or more, and estimated distributions per unit, which are expected to change by 5% or more.
In addition, MEL announces today a new forecast of operating results for the fiscal period ending February 28, 2023, based on the assumptions described below.
2. Revised Forecast for the Fiscal Period Ending August 31, 2022, and Announcement of Forecast for the Fiscal Period Ending February 28, 2023
- Details of the Revised Forecast for the Fiscal Period Ending August 31, 2022 (12th fiscal period) (March 1, 2022 to August 31, 2022)
Operating | Operating | Ordinary | Net | Distributions | |||
Distributions | SCD | ||||||
Revenues | Income | Income | Income | per Unit | per Unit | per Unit | |
(Millions of | (Millions of | (Millions of | (Millions | (including SCD) | |||
(excluding | (Yen) | ||||||
yen) | yen) | yen) | of yen) | (Yen) | |||
SCD) (Yen) | |||||||
Previously | |||||||
Announced | 5,059 | 2,551 | 2,430 | 2,429 | 6,910 | 6,210 | 700 |
Forecast (A) | |||||||
Revised | 6,198 | 3,332 | 2,958 | 2,957 | 7,307 | 6,574 | 733 |
Forecast (B) | |||||||
Net Change | |||||||
(C) | 1,139 | 780 | 528 | 528 | 397 | 364 | 33 |
((B)-(A)) | |||||||
Note:This press release has been prepared for the purpose of announcing to the public certain matters relating to the revisions to the forecast for the fiscal period ending August 31, 2022, and forecast for the fiscal period ending February 28, 2023, and has not been prepared for the purpose of soliciting investment. Investors are asked to ensure that they read the prospectus for the issuance of new investment units, as well as any amendments thereto, prepared by MEL before they invest and that they make decisions on investment at their own discretion.
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Rate of | |||||||
Change | 22.5% | 30.6% | 21.8% | 21.8% | 5.7% | 5.9% | 4.7% |
(C)/(A) | |||||||
Note: SCD stands for the "surplus cash distributions". The same shall apply hereinafter.
- Details of the Forecast for the Fiscal Period Ending February 28, 2023 (13th fiscal period) (September 1, 2022 to February 28, 2023)
Operating | Operating | Ordinary | Net | Distributions | |||
Distributions | SCD | ||||||
Revenues | Income | Income | Income | per Unit | per Unit | per Unit | |
(Millions of | (Millions of | (Millions of | (Millions | (including | |||
(excluding | (Yen) | ||||||
yen) | yen) | yen) | of yen) | SCD) (Yen) | |||
SCD) (Yen) | |||||||
Forecast for | |||||||
the Fiscal | |||||||
Period | |||||||
Ending | 6,224 | 3,279 | 3,101 | 3,100 | 7,628 | 6,890 | 738 |
February 28, | |||||||
2023 | |||||||
(13th fiscal | |||||||
period) | |||||||
(Reference)
Fiscal period ending August 31, 2022 : Expected number of investment units outstanding at the end of the period : 449,935 units;
Expected Net income per unit: 6,574 yen
Fiscal period ending February 28, 2023 : Expected number of investment units outstanding at the end of the period
-
449,935 units;
Expected Net income per unit: 6,890 yen
Notes:
- The forecast information is calculated based on the assumptions described in Attachment 1, "Forecast Assumptions for the Fiscal Periods Ending August 31, 2022 and February 28, 2023". Actual operating revenues, operating income, ordinary income, net income, distributions per unit (including surplus cash distributions), distributions per unit (excluding surplus cash distributions) and surplus cash distributions per unit may vary due to acquisitions or dispositions of properties etc., changes in rent revenues attributable to tenant replacements etc., changes in the property management environment due to unexpected repairs etc., changes in interest rates, the actual number of new units issued and the issue price of such units, or the issuance of additional investment units etc. These forecasts should not be deemed a commitment or guarantee of the amount of cash distributions and surplus cash distributions.
- These forecasts may be revised if a substantial variation from the current forecast information is anticipated.
- The figures are rounded down to the nearest million yen or yen, and ratios are rounded to the nearest tenth.
For more information about Mitsubishi Estate Logistics REIT Investment Corporation, please visit: https://mel-reit.co.jp/en/
Note:This press release has been prepared for the purpose of announcing to the public certain matters relating to the revisions to the forecast for the fiscal period ending August 31, 2022, and forecast for the fiscal period ending February 28, 2023, and has not been prepared for the purpose of soliciting investment. Investors are asked to ensure that they read the prospectus for the issuance of new investment units, as well as any amendments thereto, prepared by MEL before they invest and that they make decisions on investment at their own discretion.
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Forecast Assumptions for the Fiscal Periods Ending August 31, 2022 and February 28, 2023
Items | Assumptions | |||||
Fiscal period ending August 31, 2022 (12th fiscal period): From March 1, 2022 to | ||||||
Accounting Period | August 31, 2022 (184 days) | |||||
Fiscal period ending February 28, 2023 (13th fiscal period): From September 1, 2022 | ||||||
to February 28, 2023 (181 days) | ||||||
It is assumed that MEL will acquire the real estate trust beneficiary interests in two | ||||||
new properties (the "Two New Properties") on March 1, 2022, in addition to its 22 | ||||||
properties (the "Current Properties") it holds as of today. | ||||||
For details about the Two New Properties, please refer to the press release "Notice | ||||||
Concerning Acquisition of Domestic Real Estate Trust Beneficiary Interests and Lease | ||||||
Contracts with New Tenants," dated today. It is also assumed that there will be no | ||||||
Assets Under | change in the operational status of the properties | held | after the scheduled | |||
Management | acquisitions on March 1, 2022 up until February 28, 2023. Changes include acquisitions | |||||
of new properties and dispositions of existing properties. | ||||||
LOGIPORT Kawasaki Bay (45% trust beneficiary co-ownership interest) and Logicross | ||||||
Atsugi II | ||||||
The actual results may change due to the acquisition of new properties in addition to | ||||||
the Two New Properties or the disposition of existing properties, etc. | ||||||
Operating rental revenues take into account factors such as market trends and the | ||||||
competitiveness, etc. of each property based on information provided by the current | ||||||
owner or the current beneficial owner etc. (the "Current Beneficiary, Etc.") of the Two | ||||||
Operating Revenues | New Properties and information about the Current Properties held by Mitsubishi Jisho | |||||
Investment Advisors, Inc. (the "Asset Management Company") | ||||||
It is assumed that tenants will not be delinquent on or withhold rental payments. | ||||||
It is assumed that there is no gain or loss on sale of real estate. | ||||||
Main items regarding operating expenses are as follows: | ||||||
(Millions of yen) | ||||||
Fiscal Period | Fiscal Period | |||||
Ending August 31, | Ending February | |||||
2022 | 28, 2023 | |||||
Total Operating Rental Expenses | 2,140 | 2,168 | ||||
Operational Management Fee | 286 | 285 | ||||
Utilities Cost | 146 | 163 | ||||
Repair and Maintenance | 93 | 96 | ||||
Property Taxes | 474 | 475 | ||||
Depreciation | 1,100 | 1,108 | ||||
Total General and Administrative Expenses | 725 | 777 | ||||
Operating Expenses | Asset Management Fee | 525 | 591 | |||
Sponsor Support Fee | 109 | 107 | ||||
Of operating rental expenses, which is the main operating expense, expenses except | ||||||
depreciation are calculated by taking into account various factors based on historical | ||||||
data provided by the Current Beneficiary, Etc., in the case of the Two New Properties, | ||||||
and historical data after acquisition in the case of the Current Properties. | ||||||
In general, property taxes and city planning taxes are calculated on a pro-rata basis of | ||||||
the calendar year, and settled at the time of acquisition. However, in the case of the | ||||||
transactions conducted by MEL, the amounts equivalent to the relevant settlement | ||||||
amounts are included in the purchase price, and accordingly, with respect to the Two | ||||||
New Properties, the property taxes and city planning taxes for the fiscal year 2022 will | ||||||
not be expensed during the fiscal periods ending August 31, 2022 and February 28, | ||||||
2023 in the case of settlement at time of property acquisition. Property taxes and city |
Note:This press release has been prepared for the purpose of announcing to the public certain matters relating to the revisions to the forecast for the fiscal period ending August 31, 2022, and forecast for the fiscal period ending February 28, 2023, and has not been prepared for the purpose of soliciting investment. Investors are asked to ensure that they read the prospectus for the issuance of new investment units, as well as any amendments thereto, prepared by MEL before they invest and that they make decisions on investment at their own discretion.
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planning taxes for the Two New Properties will be expensed starting from the fiscal | |
period ending August 31, 2023. | |
For building repair expenses, the amount assumed to be necessary for each property | |
is based on the mid-to-long term repair and maintenance plans prepared by the Asset | |
Management Company. However, due to the possibility that emergency repair | |
expenses may be incurred as a result of unexpected damage to the building, the fact | |
that the amount of the repair expenses generally varies greatly from year to year, and | |
the fact that repair expenses are not regularly incurred, it is possible that the amount | |
of the repair expenses for each fiscal period may differ substantially from the | |
anticipated amount. | |
For the fiscal period ending August 31, 2022, it is assumed that 374 million yen will be | |
incurred as non-operating expenses, which includes 179 million yen for interest | |
Non-operating | expenses and other debt-related costs and 195 million yen in relation to the offerings |
of the new investment units. | |
Expenses | |
For the fiscal period ending February 28, 2023, it is assumed that 178 million yen will | |
be incurred as non-operating expenses, which will be used for interest expenses and | |
other debt-related costs. | |
The balance of MEL's interest-bearing debt on an accounting basis as of today is | |
58,374 million yen. | |
It is assumed that, on March 1, 2022, MEL will obtain a loan of up to 24,100 million | |
yen for the purpose of allocating a portion of such funds to acquire the Two New | |
Properties described in "Assets Under Management" above. In addition, it is assumed | |
that MEL will obtain a third-party allotment loan of 1,100 million yen on March 1, 2022 | |
for the purpose of allocating a portion of such funds to acquire the Two New | |
Properties, which it plans to repay in full using the proceeds from the third-party | |
allotment or cash reserves. | |
It is assumed that 3,310 million yen in long-term borrowings due on September 14, | |
2022 will be refinanced in full. | |
It is assumed that MEL will receive a consumption tax refund for the fiscal period | |
Interest-bearing Debt | ending August 31, 2022 during the fiscal period ending February 28, 2023, which will |
be used to repay in full 2,000 million yen in consumption borrowings to be obtained | |
on March 1, 2022 during the fiscal period ending February 28, 2023. | |
As a result, the total expected amount of interest-bearing debt at the end of the fiscal | |
periods ending August 31, 2022 and February 28, 2023 is estimated to be 81,374 | |
million yen and 79,374 million yen, respectively. | |
LTV at the end of the fiscal periods ending August 31, 2022 and February 28, 2023 is | |
estimated to be 35.6% and 35.0%, respectively. For LTV calculation, please refer to the | |
following formula. The ratios are rounded to the nearest tenth: | |
LTV (%) = interest-bearing debt/total assets ×100 (%) | |
However, the total expected amount of interest-bearing debt and the actual LTV may | |
differ considerably from this assumption, depending on the final number of | |
investment units to be issued and the final issue amount. | |
It is assumed that, in addition to the 391,135 investment units that are issued and | |
outstanding as of today, all of the 58,800 investment units to be newly issued, which | |
will comprise 56,000 investment units to be issued through a primary offering based | |
on a resolution at MEL's board of directors meeting held today and 2,800 investment | |
units (maximum) through a third-party allotment, will be issued. | |
Investment Units | In addition to the above, it is assumed that there will be no change to the number of |
investment units through new issuance of investment units by the end of the fiscal | |
period ending February 28, 2023 or by other means. | |
Distributions per unit (excluding surplus cash distributions) and surplus cash | |
distributions per unit for the fiscal periods ending August 31, 2022 and February 28, | |
2023 are calculated based on 449,935 investment units, which is the total number of | |
investment units expected to be issued and outstanding at the end of the fiscal |
Note:This press release has been prepared for the purpose of announcing to the public certain matters relating to the revisions to the forecast for the fiscal period ending August 31, 2022, and forecast for the fiscal period ending February 28, 2023, and has not been prepared for the purpose of soliciting investment. Investors are asked to ensure that they read the prospectus for the issuance of new investment units, as well as any amendments thereto, prepared by MEL before they invest and that they make decisions on investment at their own discretion.
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periods ending August 31, 2022 and February 28, 2023, including 58,800 investment | |
units, which is the maximum number of the investment units to be newly issued | |
according to the above. | |
Distributions per unit (excluding surplus cash distributions) are calculated based on | |
the assumption that the distributions will be distributed in accordance with the | |
Distributions Per Unit | distribution policy of the Articles of Incorporation of MEL. |
(excluding surplus | Distributions per unit (excluding surplus cash distributions) may change due to various |
cash distributions) | factors including any additional acquisitions or dispositions of properties, changes in |
rent revenues attributable to tenant replacements, changes in the property | |
management environment including unexpected repair etc. | |
Surplus cash distributions per unit are calculated based on the assumption that the | |
cash distributions will be distributed in accordance with the fund distribution policy of | |
the Articles of Incorporation of MEL. It is therefore assumed that, for the fiscal period | |
ending August 31, 2022, 329 million yen as ongoing surplus cash distributions (an | |
amount equivalent to 30% of depreciation of the period) will be distributed. It is also | |
assumed that, for the fiscal period ending February 28, 2023, 332 million yen as | |
ongoing surplus cash distributions (an amount equivalent to 30% of depreciation of | |
the period) will be distributed. These are investment refunds categorized as a | |
distribution from unitholders' capital for tax purposes and there are no refunds from | |
the distribution of the allowance for temporary difference adjustments. | |
The amount of depreciation expenses may change depending on the amount of total | |
assets under management, ancillary costs, capital expenditure, the allocation method | |
of purchase price for each asset and depreciable life, etc. Surplus cash distributions, | |
which will be based on the amount of depreciation expenses, may change accordingly. | |
MEL may implement cash distributions in excess of the distributable amount to | |
unitholders based on the financial statements related to cash distribution approved | |
under the Act on Investment Trusts and Investment Corporations (Act No. 198 of June | |
4, 1951, as amended) if the board of directors of MEL deems such distribution to be | |
appropriate (1) in light of the economic environment, real estate market, leasing | |
market or other trends; (2) when the amount of income fails to meet the amount | |
Surplus Cash | equivalent to 90% of distributable income; (3) when the distribution amount fails to |
meet the requirements for the Special Provisions for Taxation on Investment | |
Distributions Per Unit | |
Corporations; or (4) in other ways to maximize the interests of unitholders. When MEL | |
implements cash distributions in excess of the distributable amount, the distribution | |
is limited to the total amount of income for the relevant operating period and the | |
amount set forth under laws and ordinances (including the rules of the Investment | |
Trusts Association, Japan, etc.) | |
Currently, MEL intends to target a level of surplus cash distributions on an ongoing | |
basis at an amount equivalent to approximately 30% of the depreciation expense for | |
the relevant fiscal period. | |
Furthermore, to maintain the stability of MEL's distributions per unit in the event that | |
the amount of distributions per unit temporarily decreases due to a series of financing | |
activities such as an issuance of new investment units or large-scale repair and | |
maintenance, which may result in a temporary dilution of investment units or | |
incurrence of large expenses, MEL may make distributions as one-time surplus cash | |
distributions. However, MEL may decide not to make any surplus cash distributions in | |
a fiscal period based on a consideration of factors such as the economic environment | |
or trends in the real estate market and the leasing market, the status of the held | |
properties, and MEL's financial condition. | |
In addition, in the event that MEL needs to allocate its cash to emergency capital | |
expenditures for unexpected damages on MEL's assets, etc., surplus cash distributions | |
per unit may be reduced. In order to continue stable financial management, MEL does | |
not plan to pay surplus cash distributions where such payment would cause the | |
Appraisal LTV (Note), as defined below, to exceed 60%. |
Note:This press release has been prepared for the purpose of announcing to the public certain matters relating to the revisions to the forecast for the fiscal period ending August 31, 2022, and forecast for the fiscal period ending February 28, 2023, and has not been prepared for the purpose of soliciting investment. Investors are asked to ensure that they read the prospectus for the issuance of new investment units, as well as any amendments thereto, prepared by MEL before they invest and that they make decisions on investment at their own discretion.
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Mitsubishi Estate Logistics REIT Investment Corporation published this content on 07 February 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 07 February 2022 06:47:10 UTC.