Nippon Prologis REIT, Inc. (NPONF) Q2 2026 Earnings Call Prepared Remarks Transcript

Nippon Prologis REIT, Inc. (NPONF) Q2 2026 Earnings Call July 15, 2026 8:00 PM EDTCompany ParticipantsPresentationUnknown ExecutiveWelcome to the earnings...

Company Participants Presentation Unknown Executive Welcome to the earnings presentation for Nippon Prologis REIT's fiscal period ended May 2026. Since our inception, we have strived to maximize unitholder value while demonstrating excellent operational and financial performances, including this fiscal period. The following highlights our performances and strategies for this fiscal period.

First, our portfolio operations remain strong, and we achieved the highest rent change in our history. We aim to further accelerate rent growth going forward. Second, the market environment supporting this rent growth has improved significantly.

The supply-demand balance in the Greater Tokyo and Greater Osaka areas has strengthened meaningfully. Third, we maintain a resilient financial position. This allows us to control debt costs more flexibly and more effectively than our peers in this rising interest rate environment.

Fourth, we continue to make steady progress toward our 3% annual stabilized DPU growth target. Let us start with the summary of this fiscal period. Our DPU exceeded our forecast by 40 basis points with continued internal growth driven by high occupancy rate and the strongest rent change since our inception.

Our portfolio appraisal value continued to appreciate, and our appraisal-based LTV remained conservative at below 29%. Our leasing activities continued to demonstrate strong performance during the period. The average occupancy for this fiscal period was 98.0%, largely in line with our forecast.

For the next 2 fiscal periods, we currently assume high average occupancy rates of 98.4% and 98.6%, respectively, reflecting increasing demand and the competitiveness of our portfolio. Our rents have continued to grow faster. We achieved a 7.0% average rent change for lease renewals and re-leasing for this fiscal period, marking the highest level since our inception.

We believe this fiscal period