Message from Executive Director

Yoshitaka Kimura
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.
　My name is Yoshitaka Kimura, and I was appointed Executive Director of TOKYU REIT on May 1, 2023. We appreciate your continued guidance and encouragement, as we will make utmost efforts for the development of TOKYU REIT.
　I hereby report our operating environment and results for the fiscal period ended July 2023.
　During the fiscal period ended July 2023, we disposed of our 30% quasi-co-ownership in Tokyo Nissan Taito Building, posting a gain on the sale of ¥1,282 million and provision of reserve for reduction entry of replaced property of ¥652 million. In addition, there were move-ins into the new section of Tokyu Toranomon Building, at which the extension work was completed in June 2022, with the occupancy rate rising by 1.9 percentage points from the end of the previous fiscal period to 98.5%. Furthermore, due to factors such as profit contributions throughout the fiscal period from Futako Tamagawa Rise, which we acquired in January 2023, leasing NOI was ¥5,226 million (increase of ¥634 million period on period), but compared with the previous fiscal period, gains on sale of real estate decreased by ¥3,303 million while operating income stood at ¥4,682 million (decrease of ¥2,648 million period on period), net income at ¥4,260 million (decrease of ¥2,625 million period on period), and net income per unit at ¥4,357 (decrease of ¥2,685 period on period). The distribution per unit will be ¥3,750 (decrease of ¥290 period on period), with provision and partial reversal of reserve for reduction entry of replaced property.
　With regard to the next fiscal period onward, we are planning to dispose of our 30% quasi-co-ownership in Tokyo Nissan Taito Building in January 2024 and 40% quasi-co-ownership in February 2024 and therefore expect to post gains on these sales in the fiscal period ending January 2024 and fiscal period ending July 2024. As a result, net income per unit is forecast to be ¥4,401 (increase of ¥44 period on period) in the fiscal period ending January 2024, while net income per unit for the fiscal period ending July 2024 is forecast to be ¥4,567 (increase of ¥166 period on period).
　Distribution per unit is planned to be ¥3,750 (same amount as the previous fiscal period) for the fiscal period ending January 2024 and ¥3,750 (same amount as the previous fiscal period) for the fiscal period ending July 2024 as well, with provision and partial reversal of reserve for reduction entry of replaced property.
　Positioning ESG and the SDGs as important management issues, TOKYU REIT and Tokyu REIM have promoted identification of material issues (materiality) and ESG initiatives in various fields based on the Sustainability Policy. In addition, we expressed our support for the Task Force on Climate-related Financial Disclosures (TCFD) recommendations in August 2022 and conducted a qualitative scenario analysis based on “governance,” “strategies,” “risk management,” and “indicators and targets” regarding climate change-related risks and opportunities, which was disclosed on the TOKYU REIT website in March 2023.
　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 2023