January 2026 Term Financial Summary (REIT)

Performance Overview

In the January 2026 term, Star Asia Investment Corporation recorded operating revenue of JPY 10,269 million (2.8% YoY increase), operating income of JPY 5,788 million (0.5% YoY increase), ordinary income of JPY 4,754 million (1.7% YoY decrease), and net income attributable to owners of parent of JPY 4,753 million (1.7% YoY decrease). Distribution per unit was JPY 1,769, down 3.3% YoY. Asset size was approximately JPY 293.8 billion, almost flat YoY, with a stable equity ratio of 49.3%.

Asset Management and Medium-Term Plan

A new medium-term plan targeting 2030 was established, aiming for distribution per unit of JPY 1,913 or higher (annual growth rate of 3% or more) and asset size of JPY 500 billion. The portfolio allocation to hotels was expanded from 37.6% to 40.2% through asset replacement to strengthen inflation resilience. Hotel operations are managed by Polaris, achieving revenue above initial expectations. Office, commercial facilities, residential, and logistics properties maintain high occupancy rates with efforts to increase rental income.

Financial Strategy and Fundraising

Interest-bearing debt stood at JPY 138,880 million with an LTV of 47.3%. Efforts were made to enhance financial stability by diversifying repayment maturities and controlling funding costs. Equity financing is also being considered to fund acquisitions and operating expenses while minimizing dilution to existing investors’ ownership. Interest rate swap hedges are utilized to manage floating interest rate risks.

Outlook and Risks

Operating revenue for the July 2026 and January 2027 terms is projected at JPY 9,476 million and JPY 9,615 million respectively, with distribution per unit expected at JPY 1,650 and JPY 1,660. Although a moderate expansion of the Japanese economy is anticipated, geopolitical risks in the Middle East and policy interest rate trends require close monitoring. The investment corporation is conducting multiple scenario analyses to maintain flexible responses.

ESG Initiatives

Environmental targets include reductions in greenhouse gas emissions and energy consumption. In the 2025 fiscal year GRESB Real Estate Assessment, the corporation earned '2 Star' and 'Green Star' ratings. Additionally, it received a 'B' score for climate change and water security in the CDP evaluation. The corporation will continue to strengthen ESG initiatives aiming to maximize investor returns while fulfilling social responsibility.