Fukuoka Reit Corporation · TSE:8968
Fukuoka Reit — 29th fiscal period Earnings Presentation
60 slides from Fukuoka Reit's earnings presentation, April 2019
Slide 1: Overview of the 29th fiscal period performance
_ : cue: orporatio wet Fukuoka REIT C BS Overview of the 291" fiscal period performance [8968] September 1s*2018~February 28" 2019
Slide 2: Contents
Financial statements 1 Business forecasts 6 Anew acquisition property 8 Portfolio overview 10 Financial strategy 19 Appraisal value 21 Situation of Fukuoka city center 23 Sustainability 28 Fukuoka REIT i a ‘monetary amounts are rounded down to the nearest whole unt, and percentages and ratios are Co
Slide 3: Topics of the 29th fiscal period
Topics of the 29th fiscal period Continuous dividends’ growth by external and internal growth Financial statements 1
Slide 4: Changes in investment ratios by investment type
Changes in investment ratios by investment type Financial statements 2
Slide 5: Dividend's track record
Dividend’s track record Steady growth of dividends Financial statements 3
Slide 6: Statements of Income compared with previous fiscal period
Statements of Income compared with previous fiscal period The dividend was 3,687 yen, up 94 yen compared to the previous fiscal period, thanks to external and internal growth - unit : mm yen Figures rounded down to the nearest mm yen Sign indicates impact on profit unit : mm yen 28th A 29th B Differ
Slide 7: Statements of Income compared with forecast
Statements of Income compared with forecast The dividend exceeded the forecast, reflecting acquisition of a new property and strong sales at Canal City Hakata and Konoha Mall Hashimoto - unit : mm yen Figures rounded down to the nearest mm yen Sign indicates impact on profit unit : mm yen 29th 29th
Slide 8: Business forecast the 30th fiscal period, Aug. 2019
Business forecast the 30th fiscal period, Aug. 2019 The dividend will be 3,680 yen despite the onset of municipal property tax on properties acquired in the 28th and 29th fiscal period Forecast in the 30th fiscal period - unit : mm yen Figures rounded down to the nearest mm yen) Sign indicates impac
Slide 9: Business forecast the 31st fiscal period, Feb. 2020
Business forecast the 31st fiscal period, Feb. 2020 The forecast dividend is at the 3,700 yen level for the first time since the 4th fiscal period Forecast in the 31st fiscal period - unit : mm yen Figures rounded down to the nearest mm yen) Sign indicates impact on profit unit : mm yen 30th 31st 30
Slide 10: New acquisition property of 29th fiscal period
New acquisition property of 29th fiscal period First investment in the Okinawa prefecture and acquired a newly constructed hotel in Naha city from the outside party A new acquisition property 8
Slide 11: Potential of hotel market in Okinawa prefecture
Potential of hotel market in Okinawa prefecture An area expected to continue to enjoy high growth rates A new acquisition property 9
Slide 12: Historical trends of asset's size by investment type
Historical trends of asset’s size by investment type Expansion of asset size to 195,979 million yen 29 properties Portfolio overview 10
Slide 13: Portfolio properties' occupancy rates
Portfolio properties' occupancy rates Maintained high occupancy rates Portfolio overview 11
Slide 14: Active retail
Active retail Stable rent levels maintained over the long term Portfolio overview 12
Slide 15: Current situation at Canal City Hakata overall
Current situation at Canal City Hakata overall Aiming to be an international SC shopping center that is the most fun in Asia Portfolio overview 13
Slide 16: Situation of Park Place Oita and Konoha Mall Hashimoto
Situation of Park Place Oita and Konoha Mall Hashimoto Providing experiential value plus enhancing user-friendliness through parking lot improvements Portfolio overview 14
Slide 17: Breakdown of variable rents
Breakdown of variable rents Portfolio overview 15
Slide 18: Fukuoka office market
Fukuoka office market Supported by firm demand, the vacancy rate fell to the 1% level Portfolio overview 16
Slide 19: Historical and projected office buildings' occupancy rates
Historical and projected office buildings’ occupancy rates Keeping to maintain well occupancy rate Portfolio overview 17
Slide 20: Office building rent revisions and tenant replacement situation
Office building rent revisions and tenant replacement situation Sustained upward rent revisions from the 25th fiscal period onwards Portfolio overview 18
Slide 21: Key financing events in the 29th fiscal period
Key financing events in the 29th fiscal period Achievement of both interest cost reduction, borrowing term extension and diversification Financial strategy 19
Slide 22: Financing condition
Financing condition A stable network of sponsor banks and other lenders Financial strategy 20
Slide 23: Appraisal value
Appraisal value Maintained unrealized gains for all properties - unit : mm yen Figures rounded down to the nearest mm yen Appraisal value Difference Direct capitalization values Acquisition Acquisition 29th 28th Book value From From 29th 28th Property name price Appraisal Book value Difference Appra
Slide 24: Historical appraisal values unrealized gains
Historical appraisal valuesunrealized gains Maintained continuously since the 3rd fiscal periodUnrealized gains 31,804 mm yen, 17.2% ratio of unrealized gains 1 at the 29th Appraisal value 22
Slide 25: The condition of Fukuoka city center
The condition of Fukuoka city center Nanakuma subway line extension project will be completed by FY2022 Situation of Fukuoka city center 23
Slide 26: Connection from Hakata area / Tenjin area
Connection from Hakata area / Tenjin area Situation of Fukuoka city center 24
Slide 27: Redevelopment in Tenjin area Tenjin Big Bang
Redevelopment in Tenjin areaTenjin Big Bang Situation of Fukuoka city center 25
Slide 28: The condition of suburb area in Fukuoka
The condition of suburb area in Fukuoka Situation of Fukuoka city center 26
Slide 29: Reference: Fukuoka Jisho Group
Reference:Fukuoka Jisho Group Situation of Fukuoka city center 27
Slide 30: Sustainability
Sustainability Sustainability 28
Slide 31: Appendix
[5 Appendix
Slide 32: Financial highlights
Financial highlights Dividend per unit was 3,687 yen - unit : mm yen Figures rounded down to the nearest mm yen 25th 26th 27th 28 th 29 th Difference 30th 31st Category Feb. 28, 2017 Aug. 31, 2017 Feb. 28, 2018 Aug. 31, 2018 Feb. 28, 2019 Aug. 31, 2019 Feb. 29, 2020 B forecast forecast Operating rev
Slide 33: Profile
Profile I Special features of Fukuoka REIT Corporation Proven track record over 29 fiscal periods as a region-specific REIT Asset management leveraging our in-depth knowledge of the real estate environment of Fukuoka and Kyushu region, one of our greatest strengths Excellent portfolio centered on Fu
Slide 34: A real estate investment trust specializing in regional properties
A real estate investment trust specializing in regional properties Appendix 32
Slide 35: Population movement of Fukuoka metropolitan area
Population movement of Fukuoka metropolitan area The population of Fukuoka metropolitan area continues to increase Appendix 33
Slide 36: Current situation of Fukuoka and Kyushu
Current situation of Fukuoka and Kyushu Appendix 34
Slide 37: Current situation of Fukuoka and Kyushu
Current situation of Fukuoka and Kyushu Appendix 35
Slide 38: 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 36
Slide 39: Analysis of earthquake risk in Fukuoka
Analysis of earthquake risk in Fukuoka All properties owned by Fukuoka REIT are covered by earthquake insurance Appendix 37
Slide 40: ESG Environment
ESGEnvironment Environment Initiatives of owned properties Appendix 38
Slide 41: ESG Society
ESG (Society) ] Fukuoka Realty: Numbers of credentialed personnel @©Fukuoka Realty Co., Ltd. (February 28, 2019) Number of employees : 41 (46.3% women) the average number of years of continuous service of permanent employees: 7 years and 7 month Full-time personnel: 41 [Male22 Female:19] MEmployees
Slide 42: ESG Governance
ESG (Governance) | Formulation 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 po
Slide 43: IR initiatives
IR initiatives I IR activities ©For institutional investors Results briefing (Tokyo) *Domestic roadshows: 185 times««) *Property tours ©For overseas investors *Participation of domestic global conference (Tokyo, Fukuoka) + Overseas roadshows: 40 times « +Property tours ©lnternal IR activities OWebsi
Slide 44: Asset management company's organization
Asset management company’s organization Appendix 42
Slide 45: Unitholders' data
Unitholders’ data Appendix 43
Slide 46: Unit price chart
Unit price chart — Investment unit price (+) lll Turnover «2 [ imMarket capitalization (as of Feb. 28, 2018): 134,762 mm yen | (yen) (units) 72,000 250,000 60,000 200,000 150,000 100,000 24,000 50,000 + ; 42,000 0 0 ‘Aug, 31, Feb. 28, Aug. 31, Feb. 28, Aug. 31, Feb. 29, Aug. 31, Feb. 28, Aug. 31, Fe
Slide 47: Portfolio table
Portfolio table As of February 28, 2019 Acquisition Total leasable Age Price Investment Acquisition Source Occupancy Tenants Real estate property name floor space Primary tenants 1 mm yen ratio timing 3 rate 4 2 Canal City Hakata 22yr10m 32,000 16.3 Nov. 9, 2004 Sponsor 46,604.75 100.0 49 Washington
Slide 48: Portfolio
Portfolio ‘atand Cty Fukuoka ped / 0 veloe 2 cr Nagasaki Hakata Bay e we ) TSA AR Sisagur Line WF = Por sense UO% NiOROCHL = ® sana-rown Okinawa Kagoshima 6 “== Kyushu Shinkansen ———" JR Line — Expressway Hcity House Keyaki Dori Tissage Hotel Naha — = Urban Exp, Soom v es (oop the A @ mass 2 cy Aree
Slide 49: Portfolio
Portfolio I ®) Cond Ciy Busnes Caner Biking Goftkumacni Busnese’Center, WSanitHakatalBuildinel Tafeku Steet Busness Center Higashi Fis’ Business Center Total Total acquisition price 4 29... 195.9... (As of February 28, 2019: (Figures round down to nearest 100mm yer T Appenaix |] Bd
Slide 50: Top tenants by leased floor area
Top tenants by leased floor area Appendix 48
Slide 51: Balance sheets compared with the previous fiscal period
Balance sheetscompared with the previous fiscal period - unit : mm yen Figures rounded down to the nearest mm yen 28th 29th Difference 28th 29th Difference Account Aug. 31, 2018 Feb. 28, 2019 Account Aug. 31, 2018 Feb. 28, 2019 A B A B Total current assets 9,397 9,345 51 Total current liabilities 7,
Slide 52: Cash flow statements compared with previous fiscal period
Cash flow statementscompared with previous fiscal period - unit : mm yen Figures rounded down to the nearest mm yen Category 28th A 29th B Difference Aug. 31, 2018 Feb. 28, 2019 BA Net cash provided by used in operating activities 4,149 4,832 682 Profit before income taxes 2,861 2,935 74 Depreciatio
Slide 53: Repair and maintenance expenses, capital expenditures, and depreciation
Repair and maintenance expenses, capital expenditures, and depreciation Appendix 51
Slide 54: Income and expenditure by properties Retail
Income and expenditure by properties Retail - unit : mm yen Figures rounded down to the nearest mm yen 29th 28th Difference Forecast Difference Konoha Mall Category Canal City Hakata Canal City Hakata B Park Place Oita SunLive City Kokura Hashimoto Total Total A B AB C AC 1 29th FP Sep. 1, 2018 Feb.
Slide 55: Income and expenditure by properties Retail Others
Income and expenditure by properties Retail - unit : mm yen Figures rounded down to the nearest mm yen Marinoa City Forecast Square Mall Kumamoto Inter- Kurume Higashi K’s Denki Fukuoka 29th 28th Difference Difference Category Kagoshima Hanahata SC Total Total community SC Kushiwara SC Kagoshima Mar
Slide 56: 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 Tenjin North Forecast Business Gofukumachi Taihaku Street Higashi Hie Higashi Hie 29th 28th Difference Difference Category Sanix Hakata Nishi-Dori Front Center Business
Slide 57: Income and expenditure by properties Others
Income and expenditure by propertiesOthers - unit : mm yen Figures rounded down to the nearest mm yen Amex Granfore Hotel Tosu LOGICITY 29th 28th Difference Forecast Difference City House Aqualia D-Wing FORZA Tissage LOGICITY Category Akasakamon Chihaya Tower Yakuin Logistics Minato Total Total Towe
Slide 58: Income and expenditure by properties Total
Income and expenditure by properties Total - unit : mm yen Figures rounded down to the nearest mm yen 29th 28th Difference Forecast Difference Category Total Total C A B A B A C Length 181 days 184 days 3 days Total leasing business revenues 9,242 9,178 64 9,121 121 Leasing revenue-real estate 8,604
Slide 59: List of borrowings
List of borrowings As of February 28, 2019 Balance Drawdown Repayment Term Fixed/ Average Interest Balance Drawdown Repayment Term Fixed/ Average Interest Category Lender mm yen Date Date year Floating Rate Category Lender mm yen Date Date year Floating Rate Mizuho Bank, and others1 3,700 Jul.31, 20
Slide 60: Canal City Hakata is one of the representative Heisei-Period retail facilities
Canal City Hakata is one of the representative Heisei-Period retail facilities Receives Special Heisei Memorial Award Developer Award chosen by tenants Appendix 58
Fukuoka REIT — 29th fiscal period Earnings Presentation on 6ix