Japan Real Estate Investment: FT3/26 Results: Rise in Market Rents Picking Up Pace

Research evidence excerpt

Japan Real Estate Investment: FT3/26 Results: Rise in Market Rents Picking Up Pace

Update

May 15, 2026 09:12 AM GMT

Morgan Stanley MUFG Securities Co., Ltd.+MJapan Real Estate Investment (8952) | Japan Takuya Sato

Equity Analyst

FT3/26 Results: Rise in Market Takuya.Sato@morganstanleymufg.comToshiyuki Anegawa +81 3 6836-8913

Toshiyuki.Anegawa@morganstanleymufg.com +81 3 6836-8914

Rents Picking Up Pace

Japan Real Estate Investment (8952.T, 8952 JT)

J-REIT | Japan

Reaction to earnings

Stock Rating Equal-weight

Unchanged Modest shortfall Largely unchanged Industry View Attractive

Impact to our thesis Financial results versus consensus Direction of next 12-month Price target ¥131,000

consensus EPS Shr price, close (May 15, 2026) ¥116,100

Mkt cap, curr, basic (bn) ¥826.0

Source: Company data, Morgan Stanley Research Avg daily trading value (bn) ¥2.3

Key Takeaways

Newly announced DPS plan continues to follow JRE's target of +2.0% annual

growth.

JRE projects 99% portfolio occupancy rate in FT3/27.

Results vs forecasts: FT3/26 DPS was below consensus but in line with our forecast

at ¥2,536 (+1% up on the previous period).

Surprises: The increase in rents for existing properties during FT3/26 compared to

the previous period was +1.0%. The company's targets for period-on-period growth

are +1.9% for FT9/26 and +1.8% for FT3/27. The avg rate of increase in market rents

across JRE's portfolio was +10.1% YoY as of end-March, and the rent gap was 9.5%

(market rent > contract rent), so it appears there is still room for rents to rise

further.

Recommended action: Somewhat positive share price implications. While results

held no major surprises, we think they confirm steady rent increases even as share

prices for office-related REITs have been lackluster.

Exhibit 1: Results Highlights