Financial Strategy
Financial Structure Positioned for Long-Term Stability and Efficiency
NPR strives to maintain a stable and flexible financing strategy that enables us to produce stable profits and achieve steady growth.
- When issuing additional units, we consider capital market trends, the economic environment and the timing of acquisitions, as well as dilution to existing unit holders, to achieve stable growth in the long term.
- We will maintain a conservative loan-to-value ratio (LTV) of approximately 50 percent, with an upper limit of 60 percent, except under special circumstances.
- LTV ratio is the ratio of aggregate principal amount of interest-bearing debt, including borrowed amounts, outstanding balances of long-term and short-term investment corporation bonds to the total assets of our portfolio.
Surplus Cash Distributions
Logistics facilities typically have a greater amount of value allocated to buildings relative to other types of real estate; therefore, they have a higher depreciation expense. This is especially true of Class-A logistics facilities, which tend to have high value-added functional specifications. As a result, we expect that the depreciation expense for our properties will generally be higher than that for other asset classes or more conventional logistics facilities. Thus, in principle, we intend to regularly distribute cash in excess of the amount of retained earnings (“Regular Surplus Cash Distributions”) in each fiscal period, after considering alternative uses such as the execution of long-term repair plans and capital expenditures, the repayment of loans and acquisition opportunities. We intend to distribute Regular Surplus Cash Distributions with a limit of 40% of depreciation expense for an applicable fiscal period.
In addition, we may make additional distributions as one-time surplus cash distributions (“One-time Surplus Cash Distributions”) to maintain the stability of our distributions per unit in the event that distributions per unit are expected to decline to a certain degree as a result of particular events. In general, we intend to maintain the maximum amount of the sum of the Regular Surplus Cash Distributions and the One-time Surplus Cash Distributions within the limits prescribed by applicable laws and regulations (including the rules established by the Investment Trusts Association, Japan).
About Surplus Cash Distributions (return of capital)

Graphical Image of Surplus Cash Distributions on Profit/Loss Statement
