Internal Growth

Portfolio Management Strategy

Our portfolio management strategy focuses on obtaining stabile profitability, as well as maintaining and improving our medium- to long-term competency.

 

1.  

 

Stabilize Revenues

With support from our sponsor companies, we have built up a network of agents who have competencies in the logistics facilities market or in information on the needs of potential customers. In contrast to other asset classes, leasing activities for logistics properties should be managed by an asset management company, since this is a niche market with few companies that can provide services dedicated to logistics properties.

As for rollovers of existing contracts, we negotiate the terms and conditions in accordance with the credit status of the tenant and/or their fit with our medium- and long-term portfolio management.

 

 

Appropriate maintenance

In order to ensure tenant satisfaction with the physical and functional value of our properties, we continuously manage their repair, renovation and renewal, while stabilizing costs to maintain portfolio profitability.

 

[Daito Renovation Project]

Several properties located on the west side of the Daito Logistics Center (T-1) were converted into logistics usage from a factory, as their efficiency as a logistics center was inferior to other competitive facilities and they were aging. In this sense, we studied the feasibility of the renovation project of the Daito Logistics Center in order to improve its efficiency as a logistics center as well as to expand its rentable area. The properties after renovation appear to be contributing to the property's medium- to long-term revenue through a rollover to a longer-term contract.

This case is the first project among J-REITs where the Investment Trust itself could be nominated as the ordering entity, and it represents an important project in that it provides us with internal growth, despite the fact that investment in logistics properties does not usually lead to upward movement in rents.

 

	Total Rentable Area	Revenue (million yen)
Before	76,208.70m2	915
After	91,371.83m2	1,187
Change	15,163.13m2 (+19.9%)	272 (+29.7%)