We would like to express our sincere gratitude for your support and patronage of United Urban Investment Corporation (“United Urban”).
Under our diversified investment policy, in the 36th fiscal period ended November 30, 2021, United Urban acquired LEVEN Otakanomori, a retail facility in Nagareyama, Chiba (acquisition price: 3.8 billion yen), as well as Kazo Logistics Center I・II in Kazo, Saitama (acquisition price: 3.2 billion yen) and Kobe Seishin Logistics Center in Kobe, Hyogo (acquisition price: 1.9 billion yen), both are logistics facilities. At the same time, after comprehensively evaluating the real estate investment market and the potential of existing properties, we sold Quartz Tower, a clinic building in Shibuya-ku, Tokyo (sale price: 5.8 billion yen). As a result, we have improved the quality and the profitability of our portfolio by replacing properties.
For the 36th fiscal period, rental revenues increased compared with the previous fiscal period. This increase was due to avoiding a projected fall in revenues from the social response to tenants affected by the spread of COVID-19, as well as an earnings recovery from existing properties and revenues from newly acquired properties. However, operating revenues decreased from the previous period due to a reduction in the gain on sale of the property sold in the 35th fiscal period, and United Urban posted operating revenues of 22,772 million yen. Moreover, net income also decreased from the previous period after recording impairment losses (1,139 million yen) for Fuchu Building totaling 7,350 million yen. The cash distribution per unit for the 36th fiscal period remained 3,100 yen by using retained earnings based on the Asset Management Policy under the COVID-19 (Note) announced in the 34th fiscal period. Though the state of infections in Japan has been gradually recovering at the end of 2021, owing to the full-fledged rollout of COVID-19 vaccinations for wide range of ages, we believe the global recovery will need more time. Consequently, the forecasts for the 37th and 38th fiscal period are based on certain assumptions.
Amid global concern over the spread of infections from the new variant of COVID-19, it is still difficult to foresee when the socioeconomic impact of COVID-19 will come to an end. Some countries and companies have started new initiatives to coexist with COVID-19, and changes in the social structure might go ahead. Under these circumstances, United Urban will accurately identify newly emerging needs in the time of COVID-19 and focus on medium- to long-term stable operations.
Your continuing support and kind attention are highly appreciated.
(Note) Asset Management Policy Under the COVID-19
United Urban will focus on stable management in accordance with the following basic policies for sustainable growth of unitholder value.
・Property replacements that will serve to enhance the quality and profitability of the portfolio
・Balance social responses with stable management of the portfolio
・Flexible financial management in accordance with change
・Stable distribution through reversal of retained earnings