Daiwa Office Investment Corporation (8976) AI Stock Analysis

• Market Cap: ¥348.66B
• Dividend Yield: 3.94%
• Average Volume (3M): 1.33K
• Price to Earnings (P/E): 24.2
• Beta (1Y): 0.17
• Revenue Growth: 19.18%
• EPS Growth: -23.37%
• Country: JP
• Employees: 124
• Sector: Real Estate
• Sector Strength: 53
• Industry: REIT - Office
• EPS (TTM): 7996.00
• Shares Outstanding: 934,745
• 10 Day Avg. Volume: 992
• 30 Day Avg. Volume: 1,334
• PEG Ratio: 2.69
• Price to Book (P/B): 1.45
• Price to Sales (P/S): 9.40
• P/FCF Ratio: 16.05
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 62 Neutral
• Price Target: ¥395,380 ▲(5.58% Upside)

The score is driven primarily by solid financial performance (strong profitability and a notable 2025 revenue rebound) tempered by leverage and inconsistent cash conversion. Technical indicators are subdued with the price below key short/intermediate moving averages and weak momentum readings. Valuation is mixed: a supportive ~4% yield is offset by a relatively high P/E.

Positive Factors

Profitability / Margins

Sustained high operating and net margins indicate the portfolio generates durable cash returns from rental operations. For an office J‑REIT this supports long‑term distribution capacity, funds routine capex, and provides cushioning against cyclical rent swings, reinforcing income stability.

2025 Revenue Rebound

A meaningful revenue pickup in 2025 suggests improving leasing momentum or successful asset management initiatives. Durable top‑line recovery improves net operating income, bolsters distributable cash flow, and enhances capacity to service debt or fund selective acquisitions over the medium term.

Managed Leverage Level

A stable debt-to-equity band near 0.8–0.9 reflects disciplined balance sheet management common in REITs. This steadiness supports predictable interest obligations and market access for refinancing, preserving strategic flexibility for portfolio maintenance and accretive deals under normal market conditions.

Negative Factors

Uneven Cash Conversion

Earnings are not consistently converting into operating cash flow, which undermines the reliability of cash available for distributions and reinvestment. Persistent weak cash conversion raises refinancing and liquidity risk, constraining capital allocation and long‑term payout sustainability.

Rising Leverage Trend

An upward drift in leverage reduces headroom for adverse scenarios and increases sensitivity to interest rate moves. Over a multi‑month horizon higher leverage can pressure credit metrics, limit acquisition optionality, and amplify downside in weaker office market cycles or rising capex demands.

Modest ROE & Margin Erosion

ROE near mid‑single digits and trending margin erosion constrain the REIT's ability to generate excess returns and grow net asset value. Over time this limits retained earnings for improvement projects and makes it harder to offset rising costs without higher leverage or asset sales.

Daiwa Office Investment Corporation Business Overview & Revenue Model

Company Description

Daiwa Office Investment Corporation is a REIT focused on investment and management of office buildings in the Central 5wards of Tokyo.

How the Company Makes Money

Daiwa Office Investment Corporation generates revenue primarily through leasing office space to tenants, thereby collecting rental income. The company's revenue model is largely dependent on the occupancy rates of its properties, the rental agreements in place, and the overall demand for office space in the Japanese market. Key revenue streams include long-term leases with corporate tenants and short-term leases that allow for flexibility in rental agreements. Additionally, the company may earn income from property sales or through capital appreciation of its portfolio. The corporation's financial performance is supported by partnerships with real estate management firms and strategic investors, which enhance its ability to acquire and manage high-value properties effectively.

Daiwa Office Investment Corporation Financial Statement Overview

Summary

Solid overall financial profile: strong profitability for an office REIT and a sharp revenue rebound in 2025 (+15.6% YoY). Offsetting factors include modest ROE (~5–6%), managed but meaningful leverage with a gradual upward drift since 2021–2023, and uneven cash conversion (operating cash flow coverage below 1.0 across years and a 2024 free cash flow dip).

Income Statement

Profitability is strong for an office REIT, with consistently high operating and net margins across 2020–2025. However, margins have trended down since 2021–2022 levels, and the business has shown mostly low growth until the latest year, when revenue accelerated sharply in 2025 (+15.6% YoY). Net income has been relatively stable but not steadily rising, which tempers the otherwise solid earnings profile.

Balance Sheet

Leverage is meaningful but appears managed: debt-to-equity has stayed fairly steady around ~0.80–0.90, and total assets have been broadly stable over time. Returns on equity are modest (~5–6%), which is typical for REITs but limits the score. A key watchout is the gradual increase in leverage since 2021–2023, leaving less flexibility if financing costs rise or property fundamentals soften.

Cash Flow

Cash generation is positive with operating cash flow consistently strong, and free cash flow rebounded sharply in 2025 (up ~14.7% YoY) after a weak 2024. That said, cash flow quality is somewhat uneven: in 2024, free cash flow covered only ~40% of net income, and operating cash flow coverage has remained below 1.0 in all shown years, indicating earnings are not fully translating into operating cash flow in a consistent way.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	37.51B	28.79B	28.70B	28.37B	28.94B
Gross Profit	17.96B	15.31B	17.15B	17.77B	18.34B
EBITDA	20.25B	18.25B	17.71B	18.56B	19.12B
Net Income	14.45B	13.38B	13.29B	14.01B	14.35B
Balance Sheet
Total Assets	488.32B	491.24B	482.20B	481.05B	483.28B
Cash, Cash Equivalents and Short-Term Investments	33.04B	29.40B	25.88B	19.08B	26.65B
Total Debt	217.95B	219.40B	207.80B	205.80B	202.35B
Total Liabilities	245.83B	246.27B	234.68B	233.56B	229.64B
Stockholders Equity	242.49B	244.97B	247.52B	247.49B	253.64B
Cash Flow
Free Cash Flow	21.97B	7.66B	18.52B	10.07B	17.08B
Operating Cash Flow	24.32B	19.05B	22.57B	24.56B	20.90B
Investing Cash Flow	-6.06B	-10.91B	-4.57B	-14.90B	-3.95B
Financing Cash Flow	-18.52B	-4.53B	-11.10B	-17.14B	-18.51B

Daiwa Office Investment Corporation Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 374500.00
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:8976, the sentiment is Positive. The current price of 374500 is below the 20-day moving average (MA) of 376200.00, below the 50-day MA of 375352.00, and above the 200-day MA of 344913.64, indicating a neutral trend. The MACD of -1873.34 indicates Positive momentum. The RSI at 48.06 is Neutral, neither overbought nor oversold. The STOCH value of 54.38 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:8976.

Daiwa Office Investment Corporation Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
8975	75 Outperform	¥151.80B	16.16	―	6.26%	55.69%	24.75%
8954	71 Outperform	¥584.57B	24.58	―	4.10%	-31.88%	2.02%
8987	67 Neutral	¥200.22B	24.23	―	3.82%	64.38%	0.79%
8958	66 Neutral	¥137.42B	16.13	―	5.86%	90.94%	40.39%
Sector *	65 Neutral	$2.17B	12.19	3.79%	4.94%	3.15%	1.96%
3295	64 Neutral	¥251.28B	20.83	―	4.63%	-5.47%	14.66%
8976	62 Neutral	¥348.66B	24.21	―	3.94%	19.18%	-23.37%

Daiwa Office Investment Corporation Corporate Events

Daiwa Office Investment Completes First Phase of Real Estate Divestment

Daiwa Office Investment Corporation has completed the first transfer of a co-ownership interest in the trust beneficial interest of the Daiwa Sarugakucho property, valued at 2,550 million yen. This divestment is part of a two-phase transfer, with the second phase scheduled for completion in May 2026, reflecting the company’s ongoing strategy to optimize its real estate portfolio.

The most recent analyst rating on (JP:8976) stock is a Hold with a Yen388945.00 price target. To see the full list of analyst forecasts on Daiwa Office Investment Corporation stock, see the JP:8976 Stock Forecast page.

Daiwa Office Investment Completes Final Transfer of Trust Beneficial Interest

Daiwa Office Investment Corporation has completed the third and final transfer of a 30% co-ownership interest in the trust beneficial interest of domestic real estate, specifically the Daiwa Tsukishima property, for 2,940 million yen. This divestment marks the conclusion of a strategic move announced in July 2024, potentially impacting the company’s asset portfolio and financial strategy.

The most recent analyst rating on (JP:8976) stock is a Hold with a Yen388945.00 price target. To see the full list of analyst forecasts on Daiwa Office Investment Corporation stock, see the JP:8976 Stock Forecast page.

Daiwa Office Investment Corporation to Cancel 8,410 Investment Units

Daiwa Office Investment Corporation announced the cancellation of 8,410 of its own investment units, representing 0.89% of its total issued units. This move, scheduled for November 28, 2025, is part of the company’s strategic financial management, potentially impacting its market positioning and stakeholder interests.

The most recent analyst rating on (JP:8976) stock is a Hold with a Yen388945.00 price target. To see the full list of analyst forecasts on Daiwa Office Investment Corporation stock, see the JP:8976 Stock Forecast page.

Daiwa Office Investment Secures 5.5 Billion Yen for Debt Refinancing

Daiwa Office Investment Corporation announced a borrowing of 5,500 million yen to refinance existing debt due on November 28, 2025. This financial maneuver maintains the company’s interest-bearing liabilities at a stable level, with no significant change in investment risks, ensuring continued financial stability and operational efficiency.

The most recent analyst rating on (JP:8976) stock is a Hold with a Yen388945.00 price target. To see the full list of analyst forecasts on Daiwa Office Investment Corporation stock, see the JP:8976 Stock Forecast page.

Daiwa Office Investment Corporation Updates Related Party Status

Daiwa Office Investment Corporation announced a change in its specified related parties, with Daiwa Securities Realty Co., Ltd. now classified as such due to significant transactions involving real estate and trust beneficiary rights. This change, effective from June 1, 2025, does not impact the company’s investment status or distribution forecasts, indicating stability in its operations despite the reclassification.

The most recent analyst rating on (JP:8976) stock is a Hold with a Yen388945.00 price target. To see the full list of analyst forecasts on Daiwa Office Investment Corporation stock, see the JP:8976 Stock Forecast page.