Japan Residential (JRIC), which as its name suggests invests in Japanese residential property, delivered a solid enough underlying performance last year, profiting from its new strategy of using the proceeds from non-core asset sales to invest in properties with greater prospects of capital growth.
Sales generated profits of £2.1m, and unrealised valuation gains of £6.6m helped to push net asset value (NAV) ahead by 7 per cent when calculated in yen terms. However, the yen declined by 27 per cent against sterling, and the company's currency exposure is unhedged. So, in sterling terms, NAV fell by 11p to 58.7p, which means that from a year earlier, the share price has moved from a 15.4 per cent discount to NAV to an 11.2 per cent premium.
On the trading front, average occupancy rates rose from 95.2 per cent to 95.6 per cent, but gross rental income in yen terms was only marginally ahead, translating into a 16 per cent decline in sterling terms. Together with the proceeds of non-core asset sales, the group also raised funds through new equity and a further debt facility, allowing new property acquisitions in the first quarter of £65.6m.
