（執筆：フィスコ客員アナリスト 国重 希）Situation of investment unit prices
Heiwa Real Estate REIT Investment Corporation <8966> has generally been on an upward trend in its investment unit prices since 2017, but experienced a significant decline in March 2020 due to concerns about the overall economy and corporate performance in the wake of the coronavirus crisis. Since then, as measures to combat the coronavirus have progressed and expectations for economic recovery have increased, investment unit prices have significantly rebounded. However, due to the uncertainties in financial policies, economy, and real estate rental market, investment unit prices have been relatively stable and lagging behind domestic stocks. In the long term, however, since the announcement of a sponsor change in October 2009, while the Tokyo Stock Exchange REIT Index has remained flat or has slightly increased, the investment unit price of the same REIT has increased significantly.
As part of its key strategy, the same REIT has set investor return as a priority pillar towards achieving "NEXT VISION II", aiming for "abundant internal reserves redistribution," "utilization of free cash flow," "improvement of liquidity," and "realization of unrealized gains." In other words, it plans to use "abundant internal reserves" as a source of future dividend payments and improve the cruising level of dividends by using "free cash" to acquire properties or repay borrowings, as well as to purchase its own investment units when it deems it to be effective with sufficient surplus funds. It also aims to improve investment unit liquidity by achieving recognition through inclusion in the Global Index and improving its AA credit rating. Furthermore, as a "realization of unrealized gains," it aims to realize ample unrealized gains through asset replacement, utilize the realized gains to improve portfolio quality, and expand internal reserves and increase dividend payments. In the fiscal year ending May 2024, it plans to record gains on transfers for the 14th consecutive period and further strengthen investor returns through the realization of unrealized gains, and is working towards its target dividend of 3,800 yen. We believe that as our ambitious efforts and steady results towards achieving our target are understood by investors, their evaluation of the same REIT will continue to rise.
(Written by FISCO guest analyst Nozomi Kokushige).
