25th Jun 2015 07:00
25 June 2015
Japan Residential Investment Company Limited
(the "Company")
Investment Property Valuation
Japan Residential Investment Company Limited (AIM: JRIC) is a closed-ended Guernsey incorporated company established to make and hold investments in residential property in Japan. The Company, its subsidiaries and entities in which it has a beneficial interest are referred to collectively as "the Fund".
The Fund portfolio was externally valued at ¥46,833 million (£246.7 million) as at 31 May 2015. This represents an increase of ¥981 million (£5.2 million) or 2.1% over the portfolio valuation one year prior. This portfolio value reflects the previously announced disposal of Branche Kanamecho IV in Toshima Ward, Tokyo in September 2014. The sale was made at a 34.1% premium over its valuation of ¥410 million (£2.2 million) as at 31 May 2014. The unleveraged net yield of the portfolio (appraised net operating income over value) ended at 5.2% as at 31 May 2015, down from 5.3% six months prior.
On a like-for-like basis, investment property value increased 3.1% during the year ended 31 May 2015. The largest gains in percentage terms were in Tokyo (+3.5%), where the majority of the Fund's assets are located. This was followed by gains in Other (+2.6%), Osaka (+2.5%) and Nagoya (+2.4%).
Fund investment property values have made steady gains over the past three years, while values remain substantially below pre credit crisis levels. Properties purchased before the financial crisis - which represent 70% of the portfolio by value - remain down 12% on average from initial purchase price. The portfolio of investment property as a whole, including recent acquisitions, is valued at 7% below initial purchase price.
Alec Menikoff, Managing Director, Halifax Asset Management said, "The outlook for the market and the Fund portfolio remains encouraging. We continue to see upward pressure on pricing as more investors become active in the market."
Portfolio valuation trend by region for year ending May:
| % Change in Value YoY (like-for-like basis) |
| Property Yield (%) | ||
| 2013 | 2014 | 2015 |
| May-2015 |
Tokyo | 4.9 | 3.8 | 3.5 |
| 4.8 |
Osaka | 2.9 | 3.3 | 2.5 |
| 5.5 |
Nagoya | 2.9 | 4.0 | 2.4 |
| 5.7 |
Other | 3.5 | 2.3 | 2.6 |
| 6.1 |
Total | 3.9 | 3.5 | 3.1 |
| 5.2 |
Note: Sterling values are based on the exchange rate of ¥189.84/£1 as at 31 May 2015.
Enquiries:
KK Halifax Management Limited
Manager Edward Barrow +66 2656 0881
KK Halifax Asset Management
Investment Adviser Alec Menikoff +81 (0)3 5563 8771
Smith & Williamson Corporate Finance Limited
Nominated Adviser Azhic Basirov +44 (0)20 7131 4000
David Jones
Jefferies Hoare Govett
Joint Broker Sara Hale +44 (0)20 7029 8000
Max Jones
Liberum Capital Limited
Joint Broker Richard Bootle +44 (0)20 3100 2222
Related Shares:
JRIC.L