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Page 12 and 13 explain management of Tokyo Office properties.
During the period ended May 2019, rent increased in 3,878 tsubo, or 78% of the area subjected to lease renewal, with an average increase rate of 9.1%, the highest figure ever, which accounts for ¥7.855 million per month.
For the period ending November 2019, operation has been going well and some tenants have already agreed to increase rents until the period ending May 2020. No sign of change in this uptrend has been observed and this has continued.
Next, I would like to explain tenant replacement status.
In our portfolio, the ratio of tenant departure is quite low and opportunities to increase rent along with tenant replacement are limited, but for the period ended May 2019, we have increased the rents by 17.1% in average, or ¥1.529 million per month.
Further, since the period ended November 2018, at the tenant replacements, we have all concluded fixed-term lease agreements to secure rent upside opportunities at next negotiation.
The bottom right 3 shows rent gap diversification by each period.
The rent gap for Tokyo Office properties as of the end of May 2019 has stood at negative 10%, widened by 1%.
For the periods ending May 2020 and November 2020, rent gaps are assumed at around negative 20%, which indicates further internal growth can be expected.
We aim to continuously achieve in internal growth through aggressive negotiation.
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