FT5/26 Results: Powerful Growth in Rents

Research evidence excerpt

FT5/26 Results: Powerful Growth in Rents

Update

July 17, 2026 09:00 AM GMT

Morgan Stanley MUFG Securities Co., Ltd.+MDaiwa Office Investment (8976) | Japan Takuya Sato

Equity Analyst

FT5/26 Results: Powerful Takuya.Sato@morganstanleymufg.comToshiyuki Anegawa +81 3 6836-8913

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

Growth in Rents

Reaction to earnings

Unchanged In-line Modest revision higher

Impact to our thesis Financial results versus consensus Direction of next 12-month

consensus EPS Daiwa Office Investment (8976.T, 8976 JT)

Source: Company data, Morgan Stanley Research J-REIT | Japan

Stock Rating Overweight

Industry View Attractive

Key Takeaways Price target ¥431,000

Shr price, close (Jul 17, 2026) ¥330,000

Property acquisitions and growth at existing properties fuel a small upward Mkt cap, curr, basic (bn) ¥308.5

revision in the firm's target for adjusted EPS in FT11/27. Avg daily trading value (bn) ¥0.6

Watch efforts in regard to rent gaps.

Results vs. forecasts: FT5/26 DPS beat our and consensus forecasts at ¥7,630 (-

4.9% vs the previous period).

Surprises: Rates of rent increases were +23.3% upon tenant replacement (FT11/25:

+14.2%) and +12.0% upon renewal (+8.3%). The rent gap of ~20% (FT11/25: mid-10%

level) supports continuing expectations of rent growth. The firm also announced

buybacks of up to ¥1.5bn or 7,000 investment units (0.75% of investment units in

issue).

Recommended action: Our impression for the share price is slightly positive, as the

outlook is for growth in adjusted EPS even in the current interest rate environment.

Going forward we will be watching the extent to which the firm can carry out

leasing at higher rents as large-scale lease cancellations are expected in FT5/27.

Exhibit 1: Results Highlights

Sales OP RP NP EPS DPS