Fukuoka Reit Corporation · TSE:8968
Fukuoka Reit — 18th fiscal period Earnings Presentation
56 slides from Fukuoka Reit's earnings presentation, October 2013
Slide 1: Overview of the 18th fiscal period performance
ips ¢ ate ny ie ' Fukuoka F REIT Corporation Overview of the 18th fiscal period performance [8968] March 1°, 2013~August 315!,2013
Slide 2: Agenda and notes
Financial statements Business forecasts Financial strategy External growth Overview of retail operation Overview of office properties operation Fukuoka REIT —_ *Regarding rounding of amounts, percentage, and ratios:unless otherwise noted, in these materials, monetary amounts are rounded down to the
Slide 3: Financial highlights
Financial highlights Dividend per unit : 169 yencompared with previous period - unit : mm yen (Figures rounded down to nearest mm yen) 14th 15th 16th 17th 18th 19th 20th Category Aug 31, 2011 Feb 29, 2012 Aug 31, 2012 Feb 28, 2013 Aug 31, 2013 Variation Feb, 2014 Aug, 2014 BA forecast forecast Opera
Slide 4: Balance sheets compared with the previous fiscal period
Balance sheets compared with the previous fiscal period Increased assets from property acquisitions and improved financial stability through capital increase - unit : mm yen Figures rounded down to nearest mm yen 17th 18th 17th 18th Category Feb 28, 2013 Aug 31, 2013 Variation Category Feb 28, 2013
Slide 5: Income statements compared with previous fiscal period
Income statements compared with previous fiscal period Increase in revenues and profits from property acquisitions - unit : mm yen Figures rounded down to nearest mm yen Sign indicates impact on net income unit : mm yen 17th 18th Category Feb 28, 2013 Aug 31, 2013 Variation B A Operating revenues ,2
Slide 6: Income statements compared with forecast
Income statements compared with forecast Higher revenues and profits on favorable sales at Canal City Hakata - unit : mm yen Figures rounded down to nearest mm yen Sign indicates impact on net income unit : mm yen Previous 18th Category Forecast Aug 31, 2013 Variation B A Operating revenues 7,518 7,
Slide 7: Portfolio properties' occupancy rate
Portfolio properties' occupancy rate Continuation of stable occupancy rate Historical occupancy rates (the weighted average during the period) Financial statements Occupancy rates 14th 15th 16th 17th 18th Investment Category Feb 28, 2013 August 31, 2013 percentage August 31, 2011 February 29, 2012 A
Slide 8: Appraisal value
Appraisal value Unrealized gains 1 totaled 8,243 mm yen at end of 18th fiscal period (increase of 1,721 mm yen compared with previous fiscal period) - unit : mm yen Figures rounded down to nearest mm yen Appraisal values Variation Direct capitalization values Amount From amount Acquisition From Acqu
Slide 9: Business forecast 19th fiscal period
Business forecast 19th fiscal period No change from the previous dividend forecast of 16,200 yen Forecast in 19th fiscal period - unit : mm yen Figures rounded down to nearest mm yen Sign indicates impact on net income (unit : mm yen) 19th 19th 18th 19th 18th Forecast Forecast results forecast Categ
Slide 10: Business forecast 20th fiscal period
Business forecast 20th fiscal period Partial absorption of the taxes and public dues of new properties 36 mm yen Forecast in 20th fiscal period - unit : mm yen Figures rounded down to nearest mm yen Sign indicates impact on net income (unit : mm yen) 19th 20th 19th Category Forecast Forecast forecas
Slide 11: Park Place Oita expansion plan in 20th fiscal period
Park Place Oita expansion plan in 20th fiscal period Undertake further property rejuvenation through expansion Aerial view Duration of Park average Place time Oita to maturityyears Park Place Oita renovation Business forecasts 9
Slide 12: Dividend's track record
Dividend’s track record Keeping a stable dividend Dividend results / forecasts (unit : yen) Fiscal period 12th 13th 14th 15th 16th 17th 18th 19th 20th Results 16,783 16,465 16,922 16,621 16,193 16,289 16,458 Business forecasts Forecasts 16,700 16,100 16,600 16,300 16,000 16,200 16,200 16,200 16,000
Slide 13: Key financing events in 18th fiscal period
Key financing events in 18th fiscal period Committed credit line's undrawn balance : 12 bn yen Financial strategy 11
Slide 14: Borrowings profile
Borrowings profile Maintaining the stable financial conditions Duration average time to maturityyears Diversification of debt maturities Financial strategy Average interest rate paid during fiscal periods Proportions of fixed and floating rate 12
Slide 15: List of borrowings
List of borrowings Stable financing As of August 31, 2013 Type Lender Amount JPY Borrowing Date Repayment Maturity Payment Method Annual Interest Description - - - - - - Short-term debt Subtotal 0 Sumitomo Mitsui Banking Corporation 2,000,000,000 Jun 30, 2010 Dec 30, 2013 1.03000 Long-term debt Mizu
Slide 16: Interest-bearing debt and LTV
Interest-bearing debt and LTV LTV lowered as a result of public offering Total assets, interest-bearing debt and LTV Financial strategy 14
Slide 17: Recent investments
Recent investments Acquisition of four properties (three from outside parties) in 2013 External growth 15
Slide 18: Appraisal value of areas targeted for investment
Appraisal value of areas targeted for investment Act LocalSelecting properties for long-term investment as a regionally-focused REIT External growth 16
Slide 19: Fukuoka REIT's portfolio
Fukuoka REIT's portfolio Acquiring diverse properties as a general REIT External growth 17
Slide 20: Active retail
Active retail Sales recovery at Canal City Hakata after renovation and reopening of South Building Overview of retail operation 18
Slide 21: What's new at Canal City Hakata
What’s new at Canal City Hakata Large-scale renovations at Canal City Hakata were completed, and summer events were well received Trend of foreign visitors to Fukuoka Prefecture Overview of retail operation 19
Slide 22: Breakdown of active retail rents
Breakdown of active retail rents Rents have recovered following renovations at Canal City Breakdown of rents by property Breakdown of total rents Overview of retail operation 20
Slide 23: Historical and projected office properties occupancy rates
Historical and projected office properties occupancy rates Overview of office properties operation Note: Calculated as a weighted average. Total leasable floor space is figured as of the end of period. 1Residential floor spaces are removed regarding the total leasable floor space of Taihaku Street B
Slide 24: Fukuoka office market
Fukuoka office market Office supply will remain limited in Fukuoka Average vacancy rates in major Japanese cities Overview of office properties operation New supply in major cities 22
Slide 25: Office supply in Fukuoka
Office supply in Fukuoka One building planned for completion in 2013 and another in 2014 Overview of office properties operation 23
Slide 26: Appendix
[4 Appendix
Slide 27: Profile
Profile Profile Investment unit price Name Fukuoka REIT Corporation Unit price 725,000 yen as of August 31, 2013 Asset manager Fukuoka Realty Co.,Ltd Number of investment units outstanding 138,000 unitsas of August 31 28, 2013 Licensed by Fukuoka Local Finance Branch Bureau financial instrumentsNo.1
Slide 28: A real estate investment trust specializing in regional properties
A real estate investment trust specializing in regional properties Sponsors Investment policy Investment area 5% The Bank of 5% The Nishi-Nippon 5% Development 5% Saibu Gas 60-90% Fukuoka metropolitan area Appendix Fukuoka City Bank Bank of Japan 10-30% Other Kyushu areas Including Okinawa and Yamag
Slide 29: Population movement of Fukuoka city
Population movement of Fukuoka city The population of Fukuoka City continues to increase Appendix 27
Slide 30: Portfolio table
Portfolio table (as of August 31, 2013 Acquisition Total Number of Age Investment Acquisition Source leasable Occupancy tenants at Primary tenants Real estate property name price(mm yen) rate at end of ratio timing floor period end of period at end of period space ( 4) Washington Hotel and Canal Cit
Slide 31: Portfolio (1/9)
Portfolio (1/9) Fukuoka City N © Honshata Fukuoka reit Kyushu Shinkansen Line JR(conventional rail lines) Expressway Bi Retail fl Office properties Others @ Canal City Hakata @ Canal City Hakata-B © Park Place Oita © SunLiveCity Kokura © Square Mall Kagoshima Usuki © Kumamoto Intercommunity SC @ AEO
Slide 32: Portfolio (2/9)
Portfolio (2/9) Address: 1-chome,Sumiyoshi,Hakata-ku, Fukuoka City I Total leasable space: 46,486.61mi Built: April 15,1996 @ Property manager: Fukuoka Jisho io ing ju > Canal City * I Hakata % . i | Nn Hakata ekimae-dori Ave. | The Nishi-Nippon
Slide 33: Portfolio (3/9)
Portfolio (3/9) Active retail cana City Hakata*B i Address: 1-chome, Sumiyoshi, Hakata-ku, Fukuoka City @ Total leasable space: 68,811.99m Built: April 15,1996 lM Property manager: Fukuoka Jisho X Gion stn Xs nw ~~ as Canal City +. Hakata: B +“ Nakasu Hakata ekimae-dori Ave. + The Nei Nippon sumiyos
Slide 34: Portfolio (4/9)
Portfolio (4/9) @)Park Place Oita Address: 2-chome,Koen Dori Nishi, Oita City ll Total leasable space: 104,917.10ni Built: March 26,2002/April 17,2002 April 28,2004/April 9,2007 March 31,2008/Jun 29,2012 @ Property manager: Park Place Oita by Hotel FORZA Oita es Oita Port aA a aw ir JR Nippou Line =
Slide 35: Portfolio (5/9)
Portfolio59 Appendix opening year 33
Slide 36: Portfolio (6/9)
Portfolio (6/9) SSI | Passiv | @AEON Hara Shopping Center @®Hanahata SC ©)Square Mall Kagoshima Usuki @Kurume Higashi Kushiwara SC I Address :6-chome,Hara Sawara-ku, Fukuoka City I Total leasable space:27,313.53ni @ Built: October 26,1976(Renovated in 2007) @ Property manager: Fukuoka Jisho ee r we
Slide 37: Portfolio (7/9)
Portfolio (7/9) Office properties 11)Canal City Business Center Building Office properties (2)Gofukumachi Business Center Office properties (3)Sanix Hakata Building Office properties (4Taihaku Street Business Center @ Address: 1-chome, Sumiyoshi,Hakata-ku, Fukuoka City @ Total leasable space: 23,022
Slide 38: Portfolio (8/9)
Portfolio (8/9) Office properties (1 Higashi Hie Business Center ()Tenjin Nishi-Dori Center Building @)Tenjin North Front Building @ Address:3-chome, Higashi-hie, Hakata-ku, Fukuoka City @ Built:February 6, 2009 @ Property manager:Fukuoka Jisho n=, i iz 0 @ Total leasable space: 13,695.51mi @ Addres
Slide 39: Portfolio (9/9)
Portfolio (9/9) (Amex Akasakamon Tower (DCity House Keyaki Dori @)Aqualia Kego @D-Wing Tower I Address :2-chome,Maizuru,Chuo-ku, Fukuoka City ll Total leasable space: 4,821.25mi @ Built: July 26, 2005 i Property manager: DMC. (the Daio Group) Amex Akasakamon Tower @ D-Win _<el gto fenjin Stn Akasaka
Slide 40: Top tenants by leased floor area
Top tenants by leased floor area Appendix 38
Slide 41: Passive retail
Passive retail Operating revenues remain stable Appendix 39
Slide 42: Income and expenditure by properties: Active retail
Income and expenditure by propertiesActive retail - unit : mm yen Figures round down to nearest mm yen 18th Total 17th Total Variation Forecast Variation Category Canal City Hakata Canal City Hakata B Park Place Oita SunLive City Kokura A B AB C AC 1 18th fiscal period March 1, 2013 August 31, 2013
Slide 43: Income and expenditure by properties: Passive retail
Income and expenditure by properties Passive retail - unit : mm yen Figures round down to nearest mm yen Square Mall Kagoshima Kumamoto Inter- AEON Hara Kurume Higashi K’s Denki 18th Total 17th Total Variation Forecast Variation Category Community SC Shopping Center Hanahata SC Kushiwara SC Kagoshim
Slide 44: Income and expenditure by properties: Office properties
Income and expenditure by properties Office properties - unit : mm yen Figures round down to nearest mm yen Canal City Tenjin Gofukumachi Taihaku Street Higashi Hie Tenjin North Business Sanix Hakata Nishi-Dori 18th Total 17th Total Variation Forecast Variation Category Business Business Business Fr
Slide 45: Income and expenditure by properties: Others and Total
Income and expenditure by propertiesOthers and Total - unit : mm yen Figures round down to nearest mm yen Amex Hotel 18th 17th 18th 17th Aqualia Aqualia D-Wing Category Akasakamon City House Kego Chihaya Tower FORZA Total Total Variation Forecast Variation Total Total Variation Forecast Variation To
Slide 46: Cash flow statements compared with previous fiscal period
Cash flow statements compared with previous fiscal period - unit : mm yen Figures round down to nearest mm yen 17th 18th Feb 28, 2013 Aug 31, 2013 Variation Category A B BA Net cash provided by used in operating activities 3,120 3,609 488 Net income before income taxes 2,005 2,272 266 Depreciation a
Slide 47: Maintenance expenses, etc.
Maintenance expenses, etc. Maintenance expenses, capital expenditures, depreciation, and taxes and fees Appendix - unit : mm yen Figures round down to nearest mm yen Fiscal period for renovation work Property Purpose Construction cost Canal City Hakata Common area repairs and improvements 45 Renovat
Slide 48: CSR initiatives
CSR initiatives Fukuoka Realty initiatives to support and cooperate in sustained development of the local community and economy Appendix 46
Slide 49: IR initiatives
IR initiatives BIR activities / Public relations activities OIR activities 1-on-1 meeting in Japan and overseas Participation in fairs for individual investors @ Property tours for domestic institutional investors @Property tours for foreign institutional investors Workshops for securities advisors
Slide 50: Asset management company's organization
Asset management company’s organization Appendix 48
Slide 51: Unitholders' data
Unitholders’ data Appendix 49
Slide 52: Unit price chart
Unit price chart Market capitalization(as of August 31, 2013):100.0 bn yen BHistorical high(closing price):1, 300, 000 yen(February 26, 2007) Bhistorical low(closing price):297, 000 yen(November 20, 2008) (units) 14,000 —— Investment unit price Turnover (yer) 1,500,000 13,978Units June 21, 2005 Augu
Slide 53: Analysis of earthquake risk in Fukuoka
Analysis of earthquake risk in Fukuoka All properties owned by Fukuoka REIT are covered by earthquake insurance Property Inspector Report date PML %1 8.0 Nov. 30, 2010 7.6 Canal City Hakata2 Takenaka Corporation 5.3 Jan. 21, 2011 11.1 8.2 Apr. 15, 2008 Canal City HakataB 3 Takenaka Corporation 6.1 N
Slide 54: Lodgers in Oita
Lodgers in Oita Uptrend in the number of lodgers in Oita City Appendix 52
Slide 55: Fukuoka's strengths: economic expansion following population growth
Fukuoka’s strengths Expansion of the economy following population growth Appendix 53
Slide 56: Fukuoka-Gateway to Asia
Fukuoka’s strengths Fukuoka-Gateway to Asia Appendix 54
Fukuoka REIT — 18th fiscal period Earnings Presentation on 6ix