Fukuoka Reit Corporation · TSE:8968
Fukuoka Reit — 26th fiscal period Earnings Presentation
58 slides from Fukuoka Reit's earnings presentation, October 2017
Slide 1: Overview of the 26th fiscal period performance
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Slide 2: Overview of the 26th fiscal period performance
Bp, Falcsiee: REIT Lal aS Fukuoka REIT Corporation Overview of the 26" fiscal period performance seouity code 8968] March 1%,2017~August 31%, 2017 Financial statements 1 Business forecasts 10 Overview of retail operation 12 Overview of office buildings operation... 16 Financial strategy 18 Asset’s g
Slide 3: Topics of the 26th fiscal period (August 2017)
Topics of the 26th fiscal period（August 2017） Financial statements 1
Slide 4: Financial highlights
Financial highlights Dividend per unit was 3,422 yen - unit : mm yen （Figures rounded down to the nearest mm yen） 22nd 23rd 24th 25th 26th Difference 27th 28th Category 〜 Aug. 31, 2015 〜 Feb. 29, 2016 〜 Aug. 31, 2016 〜 Feb. 28, 2017 〜 Aug. 31, 2017 B－A 〜 Feb. 28, 2018 〜 Aug. 31, 2018 A B （forecast）
Slide 5: Dividend's track record
Dividend’s track record Keeping a stable dividend The 26th fiscal period end August 31, 2017 Days in fiscal period 184 （semi-annual periods ending every February and August） Dividend （actual） 3,422 yen per unit Dividend yield 4.1％ {（Dividend / days in fiscal period × 365）/ Unit price} （as of August
Slide 6: Balance sheets
Balance sheets （compared with the previous fiscal period） - unit : mm yen （Figures rounded down to the nearest mm yen） 25th 26th Difference 25th 26th Difference Account Feb. 28, 2017 Aug. 31, 2017 B－A Account Feb. 28, 2017 Aug. 31, 2017 B－A A B A B Total current assets 9,579 8,130 （1,449） Total curr
Slide 7: Statements of Income (compared with previous fiscal period)
Statements of Income （compared with previous fiscal period） Dividend recovery to the 3,400 yen range - unit : mm yen （Figures rounded down to the nearest mm yen） Sign indicates impact on profit （unit : mm yen） 25th 26th Difference Account 〜Feb. 28, 2017 〜Aug. 31, 2017 B－A A B Total operating revenue
Slide 8: Statements of Income (compared with forecast)
Statements of Income （compared with forecast） Profit below forecast at the large tax-free shop at Canal City Hakata, but strong at other properties - unit : mm yen （Figures rounded down to the nearest mm yen） Sign indicates impact on profit （unit : mm yen） 26th Difference Account Previous Forecast 〜
Slide 9: Portfolio properties' occupancy rates
Portfolio properties' occupancy rates Maintained high occupancy rates ■Historical occupancy rates （the weighted average during the period） Financial statements ■Occupancy rates （the weighted average during the period） Investment Category 22nd 23rd 24th 25th 26th ratio 〜 Aug. 31, 2015 〜 Feb. 29, 2016
Slide 10: Appraisal value
Appraisal value Unrealized gains（＊1） totaled 22,878 mm yen at the end of 26th fiscal period - unit : mm yen （Figures rounded down to the nearest mm yen） Appraisal value Difference Direct capitalization values Acquisition Book value Acquisition at 26th From From 26th 25th Name of Property name price
Slide 11: Historical appraisal values (unrealized gains)
Historical appraisal values （unrealized gains） Maintained continuously since the 3rd fiscal period（11.9% ratio of unrealized gains at the 26th（＊1）） Financial statements 9
Slide 12: Business forecast (27th fiscal period, Feb. 2018)
Business forecast （the 27th fiscal period, Feb. 2018） Dividend of 3,470 yen due to full-period contribution of LOGICITY Hisayama ■Forecast in the 27th fiscal period - unit : mm yen （Figures rounded down to the nearest mm yen) Sign indicates impact on profit （unit : mm yen） 27th 27th 26th 27th 26th A
Slide 13: Business forecast (28th fiscal period, Aug. 2018)
Business forecast （the 28th fiscal period, Aug. 2018） An increase in revenue from office buildings and other factors to compensate for downtime at Canal City Hakata ■Forecast in the 28th fiscal period - unit : mm yen （Figures rounded down to the nearest mm yen) Sign indicates impact on profit （unit
Slide 14: Active retail
Active retail Stable rent levels maintained over the long term Overview of retail operation 12
Slide 15: Current situation at Canal City Hakata (overall)
Current situation at Canal City Hakata （overall） Canal City Hakata, an evolving “Urban Theater” Overview of retail operation 13
Slide 16: Current situation at Park Place Oita
Current situation at Park Place Oita 15th anniversary, further increasing customer drawing power with a renovation Overview of retail operation 14
Slide 17: Breakdown of active retail rents
Breakdown of active retail rents Overview of retail operation 15
Slide 18: Historical and projected office buildings' occupancy rates
Historical and projected office buildings’ occupancy rates 100% occupancy rate as of the 26th fiscal period Overview of office buildings operation ＊Occupancy rates are calculated as a weighted average during period. ＊Total leasable floor space is figured as of the end of period. （＊1）Residential floo
Slide 19: Fukuoka office market
Fukuoka office market Vacancy rate declined to the lower 3% range, and supply will remain limited in the future Overview of office buildings operation 17
Slide 20: Key financing events
Key financing events Achievement of both interest cost reduction and borrowing term extension and diversification Financial strategy 18
Slide 21: Financing condition
Financing condition A stable network of sponsor banks and other lenders Financial strategy 19
Slide 22: List of borrowings
List of borrowings Stable debt financing (As of August 31, 2017) Balance Drawdown Repayment Term Fixed/ Average Interest Balance Drawdown Repayment Term Fixed/ Average Category Lender Category Lender （mm yen） Date Interest Rate （mm yen） Date Date （year） Floating Rate Date （year） Floating Short-term
Slide 23: Historical trends of asset's size by investment type
Historical trends of asset’s size by investment type Asset size is 178,054 million yen after acquiring LOGICITY Hisayama (26 properties). Asset’s growth 21
Slide 24: The condition of Fukuoka City Center
The condition of Fukuoka City Center Main sponsor development is progressing Current situation of Fukuoka City 22
Slide 25: The condition of suburb area in Fukuoka
The condition of suburb area in Fukuoka Compact city of Fukuoka, well-organized transport infrastructure Current situation of Fukuoka City 23
Slide 26: Appendix
kk Appendix
Slide 27: Profile
Profile Profile Investment unit price ■Name Fukuoka REIT Corporation ■Unit price 164,300 yen （as of August 31, 2017） ■Asset manager Fukuoka Realty Co., Ltd. Licensed by Fukuoka Local Finance Branch Bureau ■Total number of investment units outstanding 747,000 units （as of August 31, 2017） （financial
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% 60-90% Fukuoka metropolitan area 10-30% Saibu Gas Bank of Japan Appendix Fukuoka City Bank Other Kyushu areas （Including Okinawa and Y
Slide 29: Population movement of Fukuoka metropolitan area
Population movement of Fukuoka metropolitan area The population of Fukuoka metropolitan area continues to increase Appendix 27
Slide 30: Portfolio table
Portfolio table (As of August 31, 2017) Acquisition Price Total leasable Age Investment Acquisition Source Occupancy Tenants Real estate property name （mm yen） floor space Primary tenants （＊1） ratio timing （＊3） rate （＊4） （＊2） （㎡） ①Canal City Hakata 21yr 4m 32,000 18.0％ Nov. 9, 2004 Sponsor 46,602.94
Slide 31: Portfolio
Portfolio ka metropolitan area mea 30 9 Kagoshitna === Kyushu Shinkansen = JR Line — Expressway Fukuoka metropolitan area “mr 7 Sa Yeget 4 Steg ve \trutanc vegetable merket) 4 & \teland cy LUginonakarnient Semide Pare / a Hakozaki Por Hakata Bay @ Hasdiyeme Fukuoka eeit @ Canal city Hakata © canal c
Slide 32: Portfolio: Active retail
Portfolio : Active retail Appendix 30
Slide 33: Portfolio: Active retail
Portfolio : Active retail Appendix 31
Slide 34: Portfolio: Passive retail
Portfolio : Passive retail Appendix 32
Slide 35: Portfolio: Office buildings
Portfolio : Office buildings Appendix 33
Slide 36: Portfolio: Others
Portfolio : Others Appendix 34
Slide 37: Top tenants by leased floor area
Top tenants by leased floor area Appendix 35
Slide 38: Income and expenditure by properties (Active retail)
Income and expenditure by properties （Active retail） - unit : mm yen （Figures rounded down to the nearest mm yen） 26th 25th Forecast Difference Difference Category Canal City Hakata Canal City Hakata・B Park Place Oita SunLive City Kokura Total Total C A－B A－C A B （＊1） 26th FP（Mar. 1, 2017 〜 Aug. 31,
Slide 39: Income and expenditure by properties (Passive retail)
Income and expenditure by properties （Passive retail） - unit : mm yen （Figures rounded down to the nearest mm yen） Marinoa City Square Mall 26th 25th Forecast Kumamoto Inter- Kurume Higashi K’s Denki Fukuoka Difference Difference Category Kagoshima Hanahata SC Total Total C Community SC Kushiwara SC
Slide 40: Income and expenditure by properties (Office buildings)
Income and expenditure by properties （Office buildings） - unit : mm yen （Figures rounded down to the nearest mm yen） Canal City Tenjin 2６th 2５th Forecast Category Gofukumachi Sanix Hakata Taihaku Street Higashi Hie Tenjin North Front Difference Difference Business Center Nishi-Dori Total Total C Bui
Slide 41: Income and expenditure by properties (Others)
Income and expenditure by properties (Others） - unit : mm yen （Figures rounded down to the nearest mm yen） Amex Granfore Hotel Tosu LOGICITY 26th 25th Forecast City House Aqualia D-Wing LOGICITY Difference Difference Category Akasakamon Yakuin FORZA Logistics Minato Total Total C Keyaki Dori Chihaya
Slide 42: Income and expenditure by properties (Total)
Income and expenditure by properties（Total） - unit : mm yen （Figures rounded down to the nearest mm yen） Forecast 26th Total 25th Total Difference Difference Category C A－C A B A－B （＊1） （Length） 184 days 181 days 3 days ①Total leasing business revenues 8,117 8,072 45 8,106 10 Leasing revenue-real es
Slide 43: Cash flow statements (compared with previous fiscal period)
Cash flow statements (compared with previous fiscal period) - unit : mm yen （Figures rounded down to the nearest mm yen） 25th 26th Category 〜Feb. 28, 2017 〜Aug. 31, 2017 Difference A B B－A Net cash provided by （used in） operating activities 3,685 3,590 （94） Net income before income taxes 4,199 2,562
Slide 44: Repair and maintenance expenses, capital expenditures, and depreciation
Repair and maintenance expenses, capital expenditures, and depreciation - unit : mm yen （Figures rounded down to the nearest mm yen） ■Repair and maintenance expenses, capital expenditures, and depreciation Appendix ◎Major capital expenditures in the 26th fiscal period ◎Major capital expenditures in
Slide 45: IR initiatives
IR initiatives BIR activities [ Major IR activities | ©For institutional investors + Results briefing roadshows in Japan + One-on-one meetings + Property tours ©For overseas investors + Participation in global conferences in Japan + Overseas IR activities + One-on-one meetings in Japan * Start of re
Slide 46: CSR initiatives
CSR initiatives ‘ormulation of a basic policy on customer-oriented business conduct Fukuoka Realty Co., Ltd. has adopted all seven principles set forth in the Principles for Customer-Oriented Business Conduct, announced by the Financial Services Agency on March 30, 2017, and formulated a basic polic
Slide 47: Environment initiatives
Environment initiatives Appendix 45
Slide 48: Asset management company's organization
Asset management company’s organization Appendix 46
Slide 49: Corporate governance
Corporate governance Appendix 47
Slide 50: Unitholders' data
Unitholders’ data Appendix 48
Slide 51: Unit price chart
Unit price chart —— Investment unit price”) I Turnover (*2) [ Market capitalization (as of Aug. 31, 2017): 122,732 mm yen Gem cunts) 300,000 72,000 April 27, 2015 4th PO 250,000 60,000 June 21, 2005 usta March 1, 2013 larch 1, 201 200,000 3rd PO agen 150,000 36000 400,000 24,000 50,000 12,000 0 0 Au
Slide 52: Analysis of earthquake risk in Fukuoka
Analysis of earthquake risk in Fukuoka All properties owned by Fukuoka REIT are covered by earthquake insurance Appendix 50
Slide 53: Fukuoka Jisho Group
Fukuoka Jisho Group Owned properties, development and operation of retail facilities, office management Appendix 51
Slide 54: Logistics market in Northern part of Kyushu
Logistics market in Northern part of Kyushu Market formation centered on Hakata Port, Fukuoka Interchange, and Tosu Junction Appendix 52
Slide 55: Current situation of Fukuoka and Kyushu (1)
Current situation of Fukuoka and Kyushu① Inbound Visitor Situation Appendix 53
Slide 56: Current situation of Fukuoka and Kyushu (2)
Current situation of Fukuoka and Kyushu② Influx of visitors from within Japan and overseas Appendix 54
Slide 57: Current situation of Fukuoka and Kyushu (3)
Current situation of Fukuoka and Kyushu③ Future potential and population dynamics Appendix 55
Slide 58: Current situation of Fukuoka and Kyushu (4)
Current situation of Fukuoka and Kyushu④ Implementation of urban redevelopment in Tenjin area Appendix 56
Fukuoka REIT — 26th fiscal period Earnings Presentation on 6ix