Fukuoka Reit Corporation · TSE:8968
Fukuoka Reit — 8th Fiscal Period Earnings Presentation
66 slides from Fukuoka Reit's earnings presentation, October 2008
Slide 1: Park Place Oita expansion
1 「Park Place Oita」増床(2008.4.24OPEN)
Slide 2: 2
2
Slide 3: Fukuoka REIT Overview
Profile Fukuoka REIT Overview Profile Investment Unit Price 【Name】 Fukuoka REIT Corporation 【Unit Price】 545,000 yen (as of August 29, 2008) 【Outstanding Units】 107,050 units 【Asset Manager】 Fukuoka Realty Co., Ltd 【Market Capitalization】 58.3 billion yen 【Sponsors】 Fukuoka Jisho, Kyushu Electric Po
Slide 4: J-REIT Specialized in Fukuoka / Kyushu Area
J-REIT Specialized in Fukuoka / Kyushu Area 4
Slide 5: Table of Contents
Table of Contents 1 Financial Statements 6 2 Portfolio 14 3 Operational Strategy of Retail 24 4 Operational Strategy of Office 34 5 Financial Strategy 40 6 Total Strategy 48 7 Compliance 52 8 Appendix 56 These materials may contain future performance, plans, management targets and strategies. These
Slide 6: Financial Statements
Fukuoka rit | Financial Statements Portfolio Operational Strategy of Retail Operational Strategy of Office Financial Strategy Total Strategy Compliance Appendix
Slide 7: Maintaining high dividend payment exceeding 18,000 yen
Financial Statements Financial Highlights Maintaining high dividend payment exceeding 18,000 yen. 3rd Fiscal Period 4th Fiscal Period 5th Fiscal Period 6th Fiscal Period 7th Fiscal Period(i) 8th Fiscal Period(ii) Category difference September 1, 2005 March 1, 2006 September 1, 2006 March 1, 2007 Sep
Slide 8: Statement of Income
Financial Statements Statement of Income （unit：thousands） 8th Fiscal Period(1) 7th Fiscal Period(2) Variation Primary factors for period-on-period Variation March 1,2008 - August 31,2008 September 1,2007 - February 29,2008 < (1)－(2) > (Unit: mm yen) Amount (%) Amount (%) Amount (%) Factors for a Var
Slide 9: Balance Sheets
Financial Statements Balance Sheets (unit：thousands) (unit：thousands) 8th Fiscal Period 7th Fiscal Period 8th Fiscal Period 7th Fiscal Period Difference Difference (as of Aug.31, 2008) (as of Feb.29,2008） (as of Aug.31, 2008) (as of Feb.29,2008） Amount (%) Amount (%) Amount (%) Amount (%) Amount (%)
Slide 10: Cash Flows Statements
Financial Statements Cash Flows Statements (unit：thousands) The 8th Fiscal Period （184 days） The 7th Fiscal Period （182 days） Category March 1, 2008 - August 31, 2008 September 1, 2007 - February 29, 2008 Ⅰ Cash flows from operating activities Net income before tax 1,968,589 1,981,346 Depreciation e
Slide 11: Difference between Forecast and Result
Financial Statements Difference between Forecast and Result The Company continues to beat forecast. Forecast for the Primary factors for difference between Result for the 8th 8th Fiscal Period (ii) Difference forecast and result (Unit: mm yen) Category Fiscal Period (i) announced on < (i) - (ii) > A
Slide 12: Forecasts for the 9th and 10th Fiscal Periods
Financial Statements Forecasts for the 9th and 10th Fiscal Periods (Unit: mm yen) 3rd Fiscal period 4th Fiscal period 5th Fiscal period 6th Fiscal period 7th Fiscal period 8th Fiscal period 9th Fiscal period 10th Fiscal period ended Feb 28, ended Aug 31, ended Feb 28, ended Aug 31, ended Feb 29, end
Slide 13: Basic Assumption for Business Forecast
Financial Statements Basic Assumption for Business Forecast Analysis on difference between result of the 8th fiscal period and forecast of the 9th fiscal period (Unit: mm yen) 8th Fiscal period 9th Fiscal period Category (Result) （Forecast） Difference Factor 1. Expansion of floor space at Park Place
Slide 14: Portfolio
Fukuoka rit Financial Statements Portfolio Operational Strategy of Retail Operational Strategy of Office Financial Strategy Total Strategy Compliance Appendix
Slide 15: Portfolio Overview
Portfolio Portfolio Overview (*1)The figures are not included preferred silent partnerships interest (*2)The figures calculated as of 8th Fiscal Period (August, 2008) 15
Slide 16: Portfolio Map
Portfolio Portfolio Map As of August 31, 2008 16
Slide 17: Ratio by Properties
Portfolio Ratio by Properties (*) The figures are calculated as of August, 2008 17
Slide 18: Portfolio Table
Portfolio Portfolio Table Acquisition Number of Leasable Occupancy Age Price Acquisition Source tenants at Primary tenants at end of period floor areas Property Name (Note 1) (mm yen) Timing (Note 3) end of (Top 2 tenants of the relevant property) at end of rate at end (Note 2) period period (㎡) of
Slide 19: List of Property Prices
Portfolio List of Property Prices Amount Latest appraisal Latest appraisal value by the DCF method recognized Acquisition value by the (mm yen) (Note 6) Acquisition Latest Appraisal in balance appraisal Cap rate direct Price Cap rate Property name sheet at end (NCF basis) Appraisal company capitaliz
Slide 20: History of Occupancy Rate by Property (Retail)
Portfolio History of Occupancy Rate by Property (Retail) (*1) The occupancy is the percentage the leased area comprises of the leasable area (*2) The information used for each data is that for the end of each month. 20
Slide 21: History of Occupancy Rate by Property (Office, Others)
Portfolio History of Occupancy Rate by Property (Office, Others) (*1) The occupancy is the percentage the leased area comprises of the leasable area. (*2) The information used for each data is that for the end of each month. 21
Slide 22: History of NOI by Property (Retail)
Portfolio History of NOI by Property (Retail) Continues stable NOI (*)Shown NOI actual price by each property at the every fiscal period (*)The numbers below million yen rounded down 22
Slide 23: History of NOI by Property (Office, Others)
Portfolio History of NOI by Property (Office, Others) (*)Shown NOI actual price by each property at the every fiscal period (*)The numbers below million yen rounded down 23
Slide 24: Operational Strategy of Retail
Fukuoka rit Financial Statements Portfolio Operational Strategy of Retail Operational Strategy of Office Financial Strategy Total Strategy Compliance Appendix
Slide 25: Classification of Retail Properties
Operational Strategy of Retail Classification of "Retail Properties" 25
Slide 26: Property under active management policy: Canal City Hakata
Operational Strategy of Retail Property under active management policy：Canal City Hakata 26
Slide 27: Canal City Hakata: Renovation of 2nd floor at Mega Store Building
Operational Strategy of Retail Canal City Hakata：Renovation of 2nd fｌoor at the Mega Store Building 27
Slide 28: Retail Property under Active Management Policy: Park Place Oita
Operational Strategy of Retail Retail Property under Active Management Policy: Park Place Oita 28
Slide 29: Park Place Oita: Expansion of floor space at Magnolia Court
Operational Strategy of Retail Park Place Oita: Expansion of floor space at Magnolia Court 29
Slide 30: Retail Property under Active Management Policy: SunLiveCity Kokura
Operational Strategy of Retail Retail Property under Active Management Policy: SunLiveCity Kokura 30
Slide 31: SunLiveCity Kokura: Development of Surrounding Area
Operational Strategy of Retail SunLiveCity Kokura: Development of Surrounding Area 31
Slide 32: Retail Property under Passive Management Policy
Operational Strategy of Retail Retail Property under Passive Management Policy 32
Slide 33: Risk Management for Retail Properties
Operational Strategy of Retail Risk Management for Retail Properties Reducing risks with a variety of managerial measures 33
Slide 34: Operational Strategy of Office
Fukuoka reit Financial Statements Portfolio Operational Strategy of Retail Operational Strategy of Office Financial Strategy Total Strategy Compliance Appendix
Slide 35: Office Leasing Market in Fukuoka
Operational Strategy of Office Office Leasing Market in Fukuoka Source: The graph was prepared by Fukuoka Realty based on CBRE and Ikoma Data Service System Reference: “vacancy rate (%)”= (vacancy floor area within a zone / total leasing floor area) * 100 “rent”= unit price per tsubo in monthly rent
Slide 36: New Office Space Supply Trends (1) Hakata, Gion, Gofukumachi
Operational Strategy of Office New Office Space Supply Trends(1) Hakata, Gion, and Gofukumachi Areas 36
Slide 37: New Office Space Supply Trends (2) Tenjin and Yakuin
Operational Strategy of Office New Office Space Supply Trends(2) Tenjin and Yakuin Areas 37
Slide 38: Analysis on Vacancy Rate for A-Class Office Buildings
Operational Strategy of Office Analysis on Vacancy Rate for "A"-Class Office Buildings 38
Slide 39: Prospects for Office Leasing Market in Fukuoka
Operational Strategy of Office Prospects for Office Leasing Market in Fukuoka A fluctuation in rents is expected to be smaller (as the past trend indicated). We keep paying attention to “vacancy rate.” 39
Slide 40: Financial Strategy
Financial Statements Portfolio Operational Strategy of Retail Operational Strategy of Office Financial Strategy Total Strategy Compliance Appendix Fukuoka reit
Slide 41: Basic Financial Policy and State of Achievement in 8th Fiscal Period
Financial Strategy Basic Financial Policy and State of Achievement in 8th Fiscal Period 41
Slide 42: Financing Results in the 8th Fiscal Period: Refinancing
Financial Strategy Financing Results in the 8th Fiscal Period: Refinancing (7.0 billion yen) No refinancing will be scheduled till August 2009. 42
Slide 43: Financing Results: Set-up of Committed line of credit
Financial Strategy Financing Results in the 8th Fiscal Period: Set-up of Committed line of credit 43
Slide 44: Percentage of Fixed-Rate Debts to Total Debts and Duration
Financial Strategy The Percentage of Fixed-Rate Debts to Total Debts and Duration 44
Slide 45: Dispersion of Repayment Period and Interest Payment
Financial Strategy Dispersion of Repayment Period and Interest Payment 45
Slide 46: Future Measures to be taken
Financial Strategy Future Measures to be taken 46
Slide 47: Itemization of borrowings
Financial Strategy Itemization of borrowings (As of August 31, 2008) Repayment Payment Type Lender Amount (JPY) Borrowing Date Maturity(*1) Method Annual Interest Interest Description Long-term Debt Development Bank of Japan Inc. Lump sum upon No collateral payable due within 12,000,000,000 November
Slide 48: Total Strategy
Fukuoka reit Financial Statements Portfolio Operational Strategy of Retail Operational Strategy of Office Financial Strategy Total Strategy Compliance Appendix
Slide 49: Tasks and Measures
4 Total Strategy Tasks and Measures 49
Slide 50: Strategy for Growth: Asset Side
Total Strategy Strategy for Growth: Asset Side Steady management of blue-chip assets and accumulation of daily efforts 50
Slide 51: Strategy for Growth: Debt and Equity Side
Total Strategy Strategy for Growth: Debt and Equity Side Maintaining market’s trust is the most important. Management capability is put to the test 51
Slide 52: Compliance
Financial Statements Portfolio Operational Strategy of Retail Operational Strategy of Office Financial Strategy Total Strategy Compliance fl Appendix Fukuoka reit
Slide 53: Fukuoka Realty's Organizational Structure
Compliance Fukuoka Realty's Organizational Structure 53
Slide 54: Fukuoka REIT's Decision-Making Process
Compliance Fukuoka REIT's Decision-Making Process 54
Slide 55: Summary of Asset Management Fees
Compliance Summary of Asset Management Fees Fees paid in the 8th Percentage of fiscal period fees to Name Type Calculating formula (Any fractional sum of less than one operating million yen is disregarded.) revenues Assets-linked Asset management fees (i) (on a per diem basis) Total assets amount x
Slide 56: Appendix
Financial Statements Portfolio Operational Strategy of Retail Operational Strategy of Office Financial Strategy Total Strategy Compliance Appendix Fukuoka reit
Slide 57: Relation between Depreciation Expense and Capital Expenditures
Appendix Relation between Depreciation Expense and Capital Expenditures (incl. Repairing Expenses) Quality Control within Depreciation 57
Slide 58: Leasing Business Income and Expenditure by Properties (Retail)
Appendix Leasing Business Income and Expenditure by Properties (Retail) (unit:mm yen) Square Mall Kumamoto Kurume Canal City Park Place SunLive City Intercommunity K's Denki Category Kagoshima Hara SATY Hanahata SC Higashi Kagoshima Hakata Oita Kokura SC Kushiwara SC Usuki 8th Fiscal Period ( March
Slide 59: Leasing Business Income and Expenditure by Properties (Office, Others, Total)
Appendix Leasing Business Income and Expenditure by Properties (Office, Others, Total Portfolio) (unit:mm yen) Canal City Gofukumachi Taihaku Street Amex Sanix Hakata City House Category Business Center Business Center Building Business Center Akasakamon Keyaki Dori Total Building Building Building
Slide 60: Overview of Leased Area's Top Tenants
Appendix Overview of Leased Area's Top 10 Tenants (As of August 31, 2008) Remaining Total Leased Rank Store Tenant Property Share (%) Rent Structure Contract Type contract Areas (㎡) years (*2) Jusco Park Place Oita Park Place Oita 58,588.34 Fixed Ordinary Lease 13.6 1 AEON Kyushu 24.8% Fixed + Float
Slide 61: Rental Portfolio (including common expenses)
Appendix Rental Portfolio (including common expenses) (*1) Ratios indicated in the pie graphs are figures obtained by dividing the rents for the 8th fiscal period, as totaled for each remaining contract period of tenants at Canal City Business Center Building, Gofukumachi Business Center, Taihaku St
Slide 62: Breakdown of Tenant Rent Types for Retail Properties
Appendix Breakdown of Tenant Rent Types for Retail Properties (*5) This represents the total for the fixed rent of “Fixed rent tenants" minimum guarantee for “Percentage of sales with minimum guarantee tenants” and fixed rents for “Fixed rent +percentage of sales tenants” (*6) This represents the to
Slide 63: Rent Structure Image of Retail Facilities
Appendix Rent Structure Image of Retail Facilities 63
Slide 64: Construction Confirmation Inspection Agencies
Appendix Construction Confirmation Inspection Agencies Construction Construction Construction Confirmation PML Property Name Completion Date Design Companies Contractor Confirmation Name Inspection Value(*3) Agency Agency Fukuoka Jisho First Class Architect's Office, FJ Canal City Hakata New A) 8.0
Slide 65: Analysis of Investor Attributes and Volume Ownership Reports
Appendix Analysis of Investor Attributes and Volume Ownership Reports 65
Slide 66: Highlights of Financial Indicators
Appendix Highlights of Financial Indicators 66
Fukuoka REIT — 8th Fiscal Period Earnings Presentation on 6ix