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.
　I hereby provide this report on our operating environment and results for the fiscal period ended July 2024.
　During the fiscal period ended July 2024, we acquired ISM Tsunashima and additional trust beneficiary interest in the Tokyu Bancho Building while disposing of our 40% quasi-co-ownership interest in the Tokyo Nissan Taito Building and REVE Nakameguro (Land with leasehold interest). Based on the disposition of these two properties, we recorded a gain on the sale of real estate of ¥1,803 million and a provision of reserve for reduction entry of replaced property of ¥1,101 million. Operating income was ¥5,184 million (an increase of ¥341 million period over period), net income was ¥4,750 million (an increase of ¥340 million period over period), and net income per unit was ¥4,859 (an increase of ¥348 period over period) for the fiscal period ended July 2024. The distribution per unit will be ¥3,800 (an increase of ¥50 period over period), with provision and partial reversal of reserve for reduction entry of replaced property.
　With regard to the upcoming fiscal periods, in the fiscal period ending January 2025, we expect to record a gain on the sale of real estate, etc. due to the disposition of CONZE Ebisu in September 2024, and net income per unit is forecast to be ¥4,815 (a decrease of ¥44 period over period). In the fiscal period ending July 2025, we forecast that the net income per unit will be ¥2,980 (a decrease of ¥1,834 period over period).
　We are planning a distribution per unit of ¥3,800 (the same amount as the previous fiscal period) after provision and partial reversal of reserve for reduction entry of replaced property for the fiscal period ending January 2025, and ¥3,500 (a decrease of ¥300 period over period) after partial reversal of reserve for reduction entry and reserve for reduction entry of replaced property for the fiscal period ending July 2025. Going forward, we will define the amount obtained by deducting the gain on the sale of real estate, etc. per unit from EPS and adding the amount of reversal of reserve for reduction entry of replaced property per unit as the “Adjusted EPS” for which we will set a medium-term target of ¥3,500. We are aiming to further increase distribution by promoting property replacement through measures such as internal growth spurred by a robust rental market centered on the Shibuya area and the use of our sponsor pipeline.
　Our sponsor, Tokyu Corporation, decided to acquire additional TOKYU REIT investment units starting in September 2024. Due to this activity, the proportion of sponsor-owned investment units is expected to increase to as much as 10.00%. This enhances the sponsor’s commitment to TOKYU REIT and further clarifies its support stance, which we believe will lead to medium- and long-term growth for TOKYU REIT.
　In terms of sustainability initiatives, the percentage of owned properties that have acquired environmental certification reached 76.1%, achieving our initial target. We will continue to pursue initiatives in various ESG fields based on our Sustainability Policy.
　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 2024