ESCON JAPAN REIT Investment Corporation
Supplementary Explanation Materials on Asset Replacement
Disposal of four leasehold land properties scheduled for transfer (JPY 2.4 billion) and acquisition of two hotels (Nine Hours Woman Shinjuku for JPY 2.7 billion and Compass Hotel Nagoya for JPY 4.4 billion). Asset size expands from JPY 71.5 billion to JPY 76.3 billion, achieving improved profitability.
Key Figures
- Total Scheduled Disposal Price: JPY 2.4 billion
- Total Scheduled Acquisition Price: JPY 7.1 billion + Consumption Tax JPY 166 million
- Asset Size Expansion: JPY 71.5 billion → JPY 76.3 billion
- Unrealized Gains Expansion: JPY 8.1 billion → JPY 8.7 billion
- Depreciation-Adjusted NOI Improvement: JPY 3.8 billion → JPY 4.0 billion
- Assumed LTV: 47.1%
AI要約
Overview of Asset Replacement
This asset replacement is part of the Phase III roadmap strategy, aiming to improve portfolio quality by disposing of four mature leasehold land properties and acquiring two high-profitability hotels. The scheduled disposal price is JPY 2.4 billion, and the scheduled acquisition price is JPY 7.1 billion (including consumption tax of JPY 166 million). Funding will utilize borrowings of JPY 5.0 billion and equity capital of JPY 304 million. The hotels involved are Nine Hours Woman Shinjuku (already acquired) and Compass Hotel Nagoya (scheduled acquisition), marking the first inclusion of hotels in the portfolio to diversify holdings and enhance inflation resilience.
Portfolio Fortification and Changes in Financial Indicators
The asset size will expand from JPY 71.5 billion to JPY 76.3 billion through asset replacement, with unrealized gains increasing from JPY 8.1 billion to JPY 8.7 billion. Depreciation-adjusted NOI is also expected to rise from JPY 3.8 billion to JPY 4.0 billion. The rent structure shifts from predominately fixed rent to a higher variable rent ratio, increasing from 2.2% to 9.5%, thereby strengthening inflation resilience. The assumed LTV remains at a healthy level of 47.1%, ensuring financial stability.
