This is Scott Callon, Chairman of Ichigo. Thank you so much for joining us today for the FY 23/2, so the February 2023 full year corporate presentation. I am joined by Tetsuya Fujita, our Lead Independent Director, and by Dan Morisaku, who is Senior Member of Finance Team and our Head of Global IR. Let's jump into it. Starting on page 7. 14% dividend increase, earnings exceeded our revised up forecast. We had year-on-year revenue growth across all earnings metrics, specifically all-in operating profit is up 27% year-on-year. Cash net income up 18%, EPS up 48%, cash EPS up 20%. Dividend, of course, was supported by robust cash generation and recovery. Main earnings drivers and what's new and different, a very strong hotel market recovery, which we expect will continue. RevPAR was up 85% year-on-year.
We sold an asset, the Ichigo Office, an extraordinary, high valuation, spectacular. We received a currency on that asset sale. With the amount of cash coming in, we were able to fund three things, growth investments, about JPY 51 billion of asset acquisitions, that's +63% year-on-year. That is a forward indicator of where our earnings are gonna be going. We invest in assets. Particularly, this is majority of this is digital owners, which as you know, has a turnover of greater than 100% every year. An average holding period of less than a year. This could be very, very, very good for us. We did share buybacks, 3x them year-on-year, and we began Ichigo Office share acquisition, which is growing in confluence.
The Ichigo Office share acquisition is directly linked to our desire to be the best REIT operator in Japan. One of the things that we think is really important is to deliver alignment with the REIT shareholders. We do that in a number of ways, including owning the shares ourselves, so we can meet our own. Next page, the summary. Again, I'm gonna go pretty quickly. There was a Japanese session before this. There were lots of questions. Hopefully there'll be lots of questions in the English language version of this also, although one of the things that happens with the Japanese version is everyone is in the same time zone. There are more...
A lot of people watch the English version on tape or on video, as it were. Anyway, let's see if we have a couple questions. As you know, the earnings model is very durable. We are effectively structurally profitable. We have stock earnings that are about double operating expenses. Turning to the right side of the page. Stock earnings don't move around that much, unless there's a cataclysmic event. That's what they are. They're pretty structural. Small moves, +6% in sustainable real estate, SRE, -1% meaning flattish, in asset management. You went up 5% year-on-year. Next page. Points to, we try to be very clear on what we're doing.
We wanna be clear about the metrics that are important to understanding whether we're succeeding or failing. We use all-in disclosure. I don't want you to kind of read that or go, or go over the firm, try to give a better sense of, what are the drivers of the firm. Next page. On that point, the two major financial KPIs that you should be tracking us on are all-in OP and cash EPS. They were up 27% and 20% respectively year-on-year. It's a way of saying, you know, EPS was up 48%, and that looks like a much better number, but it's not nearly as relevant.
The real numbers you should be looking at are how we doing on our operating profitability and are we generating significant amounts of cash, because we are a firm that focuses on maximizing cash flows, which show over the long term. Good news is it was a good year. You should be looking at the numbers look more like 20% as opposed to like 40%. If you look at the cash EPS number, JPY 33 says close to 283. It tells you on this year's earnings, we're trading about 8.5x earnings. Given that earnings have been pushed down still, from COVID effects, we think the shares represent very good value.
That's why we bought a lot of them last year, and you should expect us to be continuing to be active in the market going forward in buying our own shares. Next page, please. The segment earnings details, a lot of stuff moving around. If you look at the all-in operating profit, big increase in asset management year-on-year. Big driver of that was the full earnings contribution from that spectacular, spectacularly profitable sale of an asset in Ichigo Office. Just to kind of address that directly, one of the things that characterizes us all as a firm is a real wariness of conflicts, and making sure the right thing happens for not only our shareholders, the shareholders of this company, Ichigo Inc. 2337, but the shareholders of the REITs that we manage.
This is kind of the daily businesses that drive the conflict. We have a majority independent board at Ichigo. We have fully independent boards, very unusual, in fact, perhaps unique, at the REITs. We do not do transactions with the REITs unless they sign off on it. In fact, we do transactions with the REITs typically at a discount to what the market price is because there are ongoing asset management fees that come from that. I mention this because the asset we sold, we actually put into the REIT as part of GE Capital's wind down of its global real estate business. We were preferred buyer on our part. They wanted to have kind of comfort that this transaction was gonna close.
We actually sold it to the REIT from the parent company at only a 2% gross margin in a market that would normally take 10%-15%-20%. It's a way of saying the REIT got this asset at a really good price. Then we managed it and were able to sell it at a much, much higher price, which was very good for the shareholders. Sustainable real estate, you can see was up 20% year-on-year in all-in operating profit. Big driver was existing owners in terms of the increase year-on-year. Multi-asset, of course, had a very good year, but the big increase came from owners. A slight increase in clean energy, weather moved around a little bit. It's not gonna move that much, but that's good to have some impact.
Next page. Turning to page 13. Just to go through some of the characteristics of the business. This is a stock plus flow earnings business. We have this kind of baked-in profitability, comes from our stock earnings, and then we try to do things on a daily basis to grow earnings for all of your shareholders. This is pretty durable. To be clear, you know, Walmart, Amazon, they have low earnings, and they're very durable because they deliver growth value, and we expect to do that ourselves. But there is a difference between the flow earnings, because they tend to be lumpier in our case, because they move around a little bit when someone can sell an asset.
It has both elements as part of core partnering business. Page 14. Shows a breakdown in the stock earnings. It's primarily SREs, sustainable real estate business, navy section, asset management growing relatively flat over time. Again, this is a stock, so that performance fee that we register on each office REIT is not included in this. It's that regard to this flow. You can see the clean energy business is growing nicely over time. Next page. Better forward earnings is another element of the business model. This is the unrealized gain on the balance sheet. We've got about JPY 100 billion of shareholder equity, third-party appraisers, not us.
third party CS is having about JPY 68 billion, plus 70% against shareholder equity in terms of unrealized gains. It's growing. That's what we do. We add value to our assets and they're very good over time. If you turn to the next page, you can see that not only do we have JPY 68 billion worth of unrealized gains. In fact, when we do exit, when we monetize those gains with asset sales, we come in spectacularly higher than what the third party appraiser looks like. They're very good. Looking something like 2x. On a 2x basis, the sum that we have, JPY 70 billion worth of unrealized gains on the balance sheet, we have JPY 140 billion.
It gives the firm extraordinary kind of value that is not recognized anywhere in the accounting in the financial statements. Next page. We also generate economic operating cash flow that exceeds the income. You can see it. This year is 1.1x, we got a little bit of say, "How is this possible since we're generating a lot more economic operating cash flow?" We didn't realize that we haven't updated this to show all-in operating profit or in this case, all-in operating cash flow. If you use effectively a more correct number, which I would say 2.4x for fiscal year 2022, and for this year it was 1.5x. We will make this adjustment going forward.
We'll be transparent about, and this is what we're doing. This significantly underestimates operating earnings because we're not using all the number here. We change everything next fiscal year. Next page, please. You can see what's happening with financing. There is a lot of turmoil in the world, and we're not experiencing any of it. You can see, our average financing is flat year-on-year at 89 basis points. In fact, the financing that we actually executed upon within the last year was done at 86 basis points. Despite all the turmoil that's going on, we are financially better off, more stable, financing kind of at extraordinary levels.
This is what is so powerful about investing in Japan. If you're deemed credit worthy by the gods of credit, you can effectively borrow kind of almost an infinite amount of money for nearly free. We understand the difference between cost of equity, cost of debt. We try to take advantage of this extraordinary, stable, durable, and cheap funding to grow value for all of you, our shareholders. Next page, please. We continue to do a lot of work on ESG because we believe in it. The good news is Japan also believes in it, and financial institutions are very committed. In Japan, there's this very strong societal-wide commitment to try to do the right thing.
Ichigo is recognized by financial institutions for our principles and for our actions on behalf of trying to create a more sustainable world. We are increasingly doing sustainable finance, positive impact finance, ESG finance. Well, the good news is not only is this utterly correct because we should all be working for a better world and a better planet, it also means in this case that the financial terms are more favorable to us as a borrower. They tend to have no covenants, no collateralization, zero to very little amortization, and actually even lower financing rates. We're delighted to be involved in this. Next page shows a summary of kind of the total of sustainable and ESG loans.
As you can see at this point, they're about 30% of our total loan book, and we expect to grow that. Next page, please. As you know, we are climate positive. We have a very substantial, and that's in the green bars, production of energy, solar and wind, and then massively, it's actually 4x our current consumption of generation of CO2. We will continue to work to expand both the green bar, push down on the blue to expand our current contribution to a better planet. Next page, please. This shows a slightly different metric, which is what % of our total consumption is done with renewable energy. Energy consumption is at 70%.
We expect to get to 80-85% this year with a target of getting to 100%, two years out. Turning to page 24 of what we did on acquisition and sale this year. Lots of acquisitions, I said earlier. That is bullish for core profitability. Multi-asset has been doing things interesting in office. As you know, we specialize in mid-sized office. It's proven to be very durable in COVID. It is a case that we primarily have SMEs as our tenants. They are using more attractive space to recruit talent in a country with a very low unemployment rate and a shrinking labor force. That is actually interesting. One of the hypotheses was that Japanese office was gonna be stressed by population decline.
It's turned out that population decline has been a driver of growth in offices because exactly as I said, companies are using better office space and larger office space in a country with very little space per worker as a way to attract talent. Owners continue to be very, very active. We bought JPY 36 billion in assets. It is expanding its sales channel. As you know, we did our first security token offerings. This is digital but real. I'm not gonna make a comment about the crypto assets that are out there. These are securitized versions of real estate with real NOI attached to them. It turns out there is a very different set of buyers for this.
We have, for example, our REIT owners tend to skew upwards in age. The folks who have been buying securitized real estate tend to be younger, in their thirties. It's a brand new market. Look, you know, inflation has come to Japan. Trying to give savers a better return is fundamentally very important to the society and to defend the lives and livelihoods of Japanese savers. We're delighted to be able to be involved in expanding the ability for Japanese people to own real estate backed by strong asset management. On the sales side, it's JPY 4.65 billion. It's about up to 20% year-on-year. New York was part of the profit margin sale price.
It's 21% against book value, which once said. These were very profitable transactions. They reflect the fact that, you know, generally the buyers are institutional investors, and they know the value we've added. This is not us leaning into the sales channel. This is us on being very good at adding value to Japanese real estate. Next page, please. See what's going on with Ichigo Owners. Continues to both acquire and to sell. I think our forecast this year, a little bit of each. I think we view our earnings forecast as promises, as commitments to be hit with a 100% certainty.
If you can take a look at it, you can see that Owners we've got an operating profit on the page. We sold JPY 20 billion worth of assets. We generated JPY 3.5 billion operating profit during this period we're talking about today that ended December. Our forecast for next year is we're gonna sell JPY 50 billion and earn something under JPY 4.2 billion. The growth margin for this year was 14% in Owners. Again, this is less than a one-year hold. We're generating ROEs that look like 50%-60%. For next year, we've penciled in a margin that's below 10%. Okay, fine. Super, super relevant to hitting our targets.
I think it's actually, it is our goal always, to beat our numbers and beat them substantially. I think there may be some room, and there to do that. You know, without trying to accuse, us of being kind of, unduly cautious, I mean, there's a lot of stuff going on in the world. Interest rates are really high. There's a war in Europe. There's uncertainty of what's going on geopolitically. I expect you to earn something better than this, during the next year. Next page shows Owners business model. It's really rooted in us being very, very good, at understanding tenant needs, and delivering assets, that respond to tenant needs.
Therefore, because, you know, we are very good at serving tenants. To be clear, sorry, I should've said this. Ichigo Owners specializes in residential assets in Tokyo, generally kind of prime, super prime locations. These are very good assets and they're designed and built well, and they target the needs of tenants well, and as a result, have durable returns for the new owners. What we do is we buy these assets. We do about 30 assets a year. We do about 1,500 leases a year, meaning 50 tenants per asset. We lease them up, and we sell them and then move on to our next to the next year.
It's a very powerful business model, meaning it adds real value. It adds real value for the tenants. It adds real value for developers who have us as their counterparty and as the ability to help them in their design and construction processes to do well, adds real value for investors to buy the assets from us and get a durable Japanese real estate return. This business we're gonna grow, and that's very positive, I think for all of 2024. Page 27. Next page. Continuing to work to support growth in our REITs and Ichigo Green. You can see, even despite everything that's gone wrong in the world of COVID, Ichigo Hotel continues to pay actually a pretty good dividend. And that's...
To be very clear, I mean, the REITs are yield assets in Japan. They're an opportunity for folks who can't get anything in the bank, haven't got anything in the bank for more than a decade, to earn a decent return. This is what we expect as well. Next page, please. Today we've done a lot on and focused on Ichigo Office. It's our biggest REIT. We think that, you know, look, there was lots to be done during COVID for Ichigo Hotel. I mean, it was such a chaotic period. Just trying to keep it up and running, serve the operators, try to figure out how we fill, help fill hotel room important. There was more activity on the office side.
Now that we've had a rebound in hotels, we should expect to see us more active again on that hotel side also. There's a lot of things we're doing. It comes down to what I said earlier. Japan continues to have a desperate shortage of yield. REITs have gone up everywhere else in the world in a skyrocketing way. That has not happened in Japan. As you know, BOJ has managed rates up a little bit. The 10-year JGB targeted month of sub zero from 0 to 25 basis points, 50 basis points. You know, as a hypothesis, we would suspect that it goes something like 75, 100 basis points. It's not clear that it's really gonna end up showing very much in terms of yield for retail and institutions in Japan.
Delivering kind of a robust yield without currency risk, without kind of geopolitical risk, Japan is extraordinarily stable economically, politically, and socially. It's something that we think is important for us, and we wanna work for Japan on that basis. Next page, please. To build up the clean energy business. We've had a little bit of a drop off this year because there's gonna be some large-scale maintenance, and then it begins to grow into next year. We have ambitions to do a lot more. We'll do some stuff on green biomass. It actually, because green biomass runs 24 hours a day and has much higher, as part of the FIT process, feed-in tariffs, it actually has very high returns to it. That's 6.8 megawatts. I don't know.
We'll put that something like five, I think, kind of a solar equivalent. We expect to see much more activity on non-FIT solar power, at a minimum, 15 MW and probably more than that going forward. Next page, please. Shows our share buyback activity. The shares have been cheap for a long time. This is something we're obviously very focused on, and we need to fix. It is however an opportunity for us to buy our shares if we think they're very, very good prices. We've bought back over 10% of the shares in the last couple years, and we would expect to continue to do so. Next page, please. We also moved on the dividend. Haven't done that for a while, focused on buying back shares.
At this point, it's like we kept the dividend at JPY 7 for four years. It's time to push it up. Obviously, firm is very cash generative. We're fully able to do so. We increased it by 40%. Next page, please. As you probably know, we are a top sponsor of the J.League, Japanese Soccer League. That was kind of tough during the COVID period since the stadiums were shut down. We're now back full on. Every time you go to a J.League match, there is Ichigo all over the stadium. It's on TV. Very powerful for us from a branding perspective.
We've made an unusual choice and we think an utterly right choice to take, so we get all these tickets from the J.League. Generally what companies do is like, "Great, we have tickets. Let's hand them out to, like, management or I don't know, customers, something like that, or employees." We think we work for shareholders, and these belong to the shareholders. The tickets go to our shareholders and to the REIT shareholders, 'cause again, we work for our REIT shareholders in the same way we work for shareholders of this company. We're the first company to offer shareholder and non-shareholder shareholders, to all of the shareholders of REITs and other solar power producers.
What's interesting, I think what you'll probably see us more involved at the club level. A lot of conversations going on that could involve us being kind of a, I don't know, a sponsor, front-of-the-shirt sponsor, not just of the J.League top level, but at the sub-level and have our name on jerseys and stuff like that. We look for that. Anyway, that's regarding the J.League. Turning to the forecast. We have all-in OCF 7% and cash EPS up 3%. It's probably very conservative. Look, you know, it is what it is. We expect to beat those numbers.
At this year's cash EPS forecast of JPY 34.1, not one, JPY 19, that puts us at 8.3x current year earnings. We think given the durability of the franchise, that makes the shares very, very good. Growth makes the shares very good value. Next page shows the segment breakdown. Big push down in asset management. Part of that's a drop off of performance fee. Part of that is we sold some assets. It does push down for asset under management. To be clear, those are our values. I mean, we're not gonna be at J-REIT because, like, we're not willing to sell assets 'cause it pushes down our fees. We manage J-REITs on behalf of J-REIT shareholders.
If that's the right thing to do, we can do asset sales, and AUM drops, or NOI participation drops, that's the way it is. Now having said that, we fully expect, we have commanded a premium valuation due to our H2 office and opportunities are going forward to grow, the asset management business. What's happening this year is some drop off in those fees, some decrease in NOI, and We're the only J-REITs in Japan hotel and H2 office that have 100% success, fee, performance fee basis, so NOI drops, that impacts us. It's also got some costs, increased costs embedded in that.
We've both been conservative about revenues and conservative about costs, so I suspect you'll be some of it by fair amount, but just so you know that's what's going in there. Civil real estate on the other hand goes up. I'm sorry. Kind of what showed on that page, by 29%. Clean energy comes off and that's linked to the large-scale infrastructure we have passed has increased the costs during this year, and then that will just come back the next year. Last page shows how cash earnings move. We're not back to pre-COVID levels for either stock or flow. Obviously, we've got to get there and more than get there.
To get back to FY 2022, not a goal of the firm to smash those numbers in a big way going forward is the goal of the team going forward. Thank you very much everyone for your patient listening, and we're now happy to take any and all questions or comments. Greg, thank you so much for joining. Go ahead.
Hi, Scott. Can you hear me?
Hi. Certainly. Thanks so much.
Okay, great. Thank you for the presentation. I have three questions. The first one is on hotels. Can you describe a little bit how the recovery was for RevPAR versus your expectations overall, especially second half of last year?
Yeah. You want me to take the questions one by one?
Up to you. Whatever you prefer.
You can tell me also, you know, hot topic. I'll add them. Let's go for it.
Okay, sure. The second question is, with regard to Ichigo Owners. As per your presentation, you're suggesting that gross profit margin is going to come down. Is that because of rising costs or kind of more digitization on pricing from the point of view of the buyer? Also, I noticed on the slide that you are forecasting more sales than buy this year. Is that reflecting a kind of slightly different environment? Would be my second question.
Yeah.
My third question would be if you are able to give us an update on the asset sales for JPY 15 billion, and would that be the reason behind the guidance? Thank you.
I'm sorry. The asset sales for... On which page you are?
For the JPY 15 billion hotel sale that was canceled by Ichigo REIT in March.
Right. Hotels. We disclosed the RevPAR movie, I think, Greg, maybe for all three very good questions on page seven.
Yep.
I mean, one of the things that's interesting, and we should address this, these are all very low RevPARs, right? I mean, it's JPY 6,000. At the current exchange rate, we're talking about, like, $50. One of the things that's clearly happened in the Japanese hotel market is that more expensive hotels have substantially outperformed.
It's both a function of high net worth, that means they're relatively better in Japan, as is the case across the world and going through kind of the economic shocks of COVID, them having more kind of disposable income and savings to be able to, when COVID reopens up, say, "I'm gonna go places and catch up for two years of lost life." And kind of cheaper, the yen getting weak and so having more inbound activity. One of the things we think we need to fix is that our RevPAR is still actually at this point, only running about 80% of pre-COVID levels. And when I say fix, we should need to be thoughtful about... This has been... We specialize in two kinds of hotel assets.
One is budget, and the second one is THE KNOT, which is a higher RevPAR boutique hotel one. THE KNOT is clearly the place we should be going. It just, you know, the ability to have kind of the ability and the willingness to pay on the part of Japanese and then the travelers is higher. Migrating a RevPAR up higher is positive. It's a way of saying these numbers are actually we think disappointing, that RevPAR should have grown more. We think that we have to do some work as a company to get there in terms of thinking about our hotel performance.
Less on the budget, more on kind of a mid-tier, you know, US dollar per night, $100, $150 a night is what we think is gonna be more grow-grow going forward. You'll see hotel sales RevPAR that kind of, and if you see a hotel activity on the purchasing side, although we're not super ambitious on that right now, given that we still have lower low NOIs and/or you have higher NOIs for these assets that are more expensive than it's. One wonders about whether more people like us who are seeing the market opportunity will add supply, and we'll take away that. We're not super inclined to kinda reach and start paying, you know, top value for our hotels.
Anyway, direct answer to your question is great RevPAR recovery. We think this year's numbers we've been very conservative on. We think we'll see more RevPAR recovery. We'll see outperformance in our hotels this year relative to what we penciled in for the forecast. We will be migrating more of our activity towards things more like THE KNOT as opposed to classic budget hotels. Does that answer your question?
Yes. Thank you.
Ichigo Owners, that would be page, for the Ichigo Owners page, 25. Let me be very direct. you know, you have asked, totally appropriately, you know, why is this weak, and what would the reasons for it to be weak? It's not clear to me that the reasons for it being weak are anything other than we've disclosed in the costs on the forecast.
I see.
You know, we wanna give numbers that we hit. There is, you know, this is a big enough activity here that impacts total earnings. We chose some numbers relatively conservative, but I don't see decreased demand. I don't see weakness in pricing. I mean, there's a little bit of wobbliness going on with global investors, but it's, you know, who are, who have problems with kind of the global PE funds and there's some shift of activity globally away from real estate. As you can imagine, towards bonds because real estate financing has gone up. I can see outlook looks weaker, and bonds are paying a lot more, but that hasn't happened in Japan.
you know, my hypothesis, and I speak in hypothesis because it's smarter to have a hypothesis and test it against evidence as it emerges as opposed to have a view, is that the little bit of wobbliness in global demand is gonna be met by continuing kind of voracious appetite for a decent return in Japan. As you know, there's some repatriation that's already occurring in Japanese portfolio allocations overseas, in part because you could finance... you could do hedges on global bonds, both in the US and Europe primarily, and outperform Japanese bond yields. You cannot do that anymore. It's gone deeply negative. Money comes to Japan, it needs a return.
You're not getting that return on bonds, so we see substantial domestic activity coming towards Japanese real estate. We're saying, my current hypothesis is that we actually hit this number, and we come in with something that looks like that we did last year, looks more like 14%.
Understood. Thank you.
On the hotel asset sales, we think we'll get that done. We're very unfortunately, and it's all on us, we were gonna do a hotel REIT offering. It was a miscalculation. Honestly, it does not appear to have been material. It was about historic financials. It was not very big. But, you know, when you're doing a public offering and trying to sell things to retail investors in Japan, you have to do an abundance of caution, et cetera, et cetera, et cetera. We canceled the deal.
Understood.
We think the assets go on. To be very clear, as I said earlier, we sell assets to our REITs at below market prices. If the alternative is we go into the market and sell the assets and sell them at a higher price, that's where we are now.
You are saying that your strategy was to focus more on THE KNOT. If I remember correctly, one of THE KNOT hotels was actually for sale as part of that batch of hotels. Would you like to take it back from the batch and keep it for yourself, so to speak, and maximize the value there?
We don't intend to sell THE KNOT, which is a Ichigo franchise, outside, at this point, outside of Ichigo itself. Actually, not in Sapporo.
Yeah.
Yokohama we're going to the hotel REIT. You know, if we could design that to sell to the hotel REIT, then we'll mix up our kind of our hotel asset kind of sales category. And I've talked about this before. I mean, generally what we do every year is we'll line up, you know, like there are 10 assets that we can sell to hit our numbers, and we're on a sell process on 20 assets, literally. You do not wanna kind of just gonna go for one corner shot on getting to your numbers. It is a way of saying that we also tend to have an abundant source of assets to sell because of the value-add activity that we do. Yeah, you're right.
If we don't sell to the hotel REIT, we will.
You keep it. I see.
We will keep it.
Am I inferring correctly that the guidance may look a bit conservative because of the uncertainty on the JPY 15 billion of sale of hotel to the REIT?
Yeah. Yeah. Yeah. I mean, there are a number. Having said that, it is also the case that, that, you know, we try to be thoughtful about showing, 'cause we show segment level guidance also, that we have numbers that kind of make sense at the segment level. In general, you know, we look for like 7- 8 ways to get to yes on hitting our numbers. That's, that's not the only element, but yes, there is a little bit of that in, in this year's forecast uncertainty.
Understood. Thank you very much.
Okay. There is a question, as to why we've increased the Ichigo Office stake to greater than 30%. You know, and to be clear, that's primarily by activity out of Ichigo Trust, so a major shareholder and not us, ourselves. We did begin a Ichigo Office buyback early in the year, and that's ongoing. That was directly linked to wanting to, and I mentioned this earlier, to create, you know, very high levels of alignment with, between ourselves and REIT shareholders. You know, we think the REIT asset class is really productive. Meaning that is, it is a great way for...
One of the few ways outside high yield equities, given the lack of yield in Japan for Japanese savers to earn a decent return. The J-REIT market has not grown nearly enough. It's been plagued by kind of concerns about sponsor conflicts. To try to do everything we can to demonstrate structurally our values, that we care, and that we're aligned with our REIT shareholders is we think is really important. Anyway, that's what's going on with the office repurchase executive. Thank you for your question. The next question is, can you disclose investors in Ichigo Trust? Well, Ichigo Trust invests primarily. Yes, I mean, not by name, of course.
Again, I'm here as chairman of Ichigo today as opposed to talking to Ichigo Trust, that's a fair enough question. Primarily, charity investment, endowments and foundations. Mostly in the U.S., also in Europe, also, you know, global. So very long-term in its approach. It's something, you know, that Ichigo feels proud about. The major owner of this firm is primarily endowments and foundations who are trying to make the world a better place. For all of us to contribute to them, and for all of us to take on those values and to work for the world is something that we find really meaningful. Okay. Thank you, everybody.
It was great for your time, and it's an honor and privilege to work for all of you. Take care. Have a good day.