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Japan REITs pay record high on greater occupancy

TOKYO -- Spurred by higher occupancy rates and rental incomes, Japanese real estate investment trusts performed briskly in their most recent fiscal periods, with the combined dividends of 27 selected REITs reaching 113.4 billion yen ($1.08 billion), the highest mark ever, a Nikkei tally showed.

The figure, which combines dividends paid out by the REITs for their fiscal half-year terms ending between December 2015 and May 2016, is up 2% from their previous terms. Twenty-four of the 27 REITs, or about 90%, raised payouts, according to the tally.

The key factor contributing to the REITs' brisk performance was a higher occupancy rate for office, logistics and hotel properties, which pushed up rental income 2% from their previous terms to 294.3 billion yen.

"Demand for offices was strong, and there were lots of upward revisions in rents" for Japan Real Estate Investment, a leading local REIT, according to a spokesperson for the REIT's asset manager.

Lower interest payments on bank loans and corporate bonds also contributed, with combined interest expenses declining to the six-year low of a combined 20 billion yen, down 3% from the previous periods.

The 27 REITs were selected on the basis that all comparable half-year term fiscal results since 2007 are available.

REITs invest unit holders' money in real estate properties and pay out dividends mainly derived from rental incomes.

(Nikkei)

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