About NBF

To Our Unitholders

Nippon Building Fund Inc. Executive Director KOICHI NISHIYAMA

In September 2001 NBF became the first Japanese real estate investment corporation to be listed on the J-REIT section of the Tokyo Stock Exchange, and since then its portfolio assets have steadily grown.

NBF's management results for the period ended December 2019 (the 37th period) consisted of operating revenues of ¥39,134 million, operating income of ¥16,916 million, net income of ¥15,547 million and a cash distribution per unit of ¥11,011.

As of the end of this period, NBF’s portfolio included 71 properties, representing an investment of ¥1,132.7 billion (aggregate acquisition price), total rentable area of 1,080,595 m² and a total of 1,472 tenants, with an average occupancy rate during the period of 99.4%.

As to the office building rental market of Tokyo’s CBDs, demand for expansion of floor space inside buildings and expansionary relocations continued to be strong against the backdrop of favorable corporate performance, and the vacancy rate continued on a downward trend with steady progress in the elimination of vacancies for both new and existing buildings. In response to such solid demand, asking rent continued on a slight upward trend.

In the office building trading market, the appetite of overseas investors, domestic real estate companies, general corporations, private funds and J-REITs for acquiring properties continues to be strong amidst an ongoing favorable financing environment backed by monetary easing measures. On the other hand, with information on prime properties for sale being limited, the competition for acquiring properties continues to intensify, resulting in a low expected yield and trading prices remaining high.

Under such an environment, NBF is conducting asset management in accordance with its basic policy of “aim to achieve steady growth of assets under management and secure stable profits on a mid- to long-term basis.”

During the fiscal period under review, NBF additionally acquired ownership interest in three properties it already owns (total acquisition price: ¥3.3 billion). It acquired ownership interest in "Nishi-Shinjuku Mitsui Bldg.” (real estate, acquisition price: ¥57 million) in July 2019, “Kowa Nishi-Shinbashi Bldg. B” (trust beneficiary right, acquisition price: ¥0.17 billion) in August 2019, and “Osaki Bright Core - Bright Plaza” (real estate, acquisition price: ¥3.1 billion) in October 2019.

NBF has endeavored to expand stable revenues from its rental business with respect to its existing portfolio by reinforcing measures for maintaining occupancy rates and increasing rents upon renewal of contracts through appropriate and flexible leasing activities with a good understanding of market trends and strengthened relationships with tenants. In addition, NBF has also put forth efforts to reduce costs by properly allocating the timing and cost of renovation/construction while striving to enhance competitiveness of properties by carrying out strategic and rightly-focused additional investment.

NBF also promotes ESG (environment, social and governance) initiatives and received “Green Star,” the highest rating in the GRESB (Global Real Estate Sustainability Benchmark) Real Estate Assessment, and “5-Star,” the top rating in the GRESB Score ranking conducted in 2019. In addition, it also received “A,” the top rating in the GRESB Public Disclosure Level evaluation scheme.

NBF’s forecasted business results include an expected distribution of ¥10,720 per unit for the period ending June 2020 (the 38th period) and an expected distribution of ¥10,750 per unit (reference) for the period ending December 2020 (the 39th period).

As the first and largest J-REIT in Japan, NBF aims to continuously achieve sustainable growth in its portfolio value and secure stable distributions on a mid-term and long-term basis by maximizing the know-how of its sponsor, the Mitsui Fudosan Group.

We are grateful to our unitholders for your continued guidance and support.

  • Financial Highlights
  • Distributions
Distribution Per Unit
Actual37th Period (2H/2019) 11,011yen
Forecast38th Period (1H/2020) 10,720yen
39th Period (2H/2020) 10,750yen
Portfolio Data
Number of
Properties
71
Asset Size(Total Acquisition Price) 1,135.5billion yen
As of Mar. 4, 2020
Occupancy Rate 99.5%
As of Feb. 29, 2020
Financial Data
37th Period(Second-Half 2019)

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