Fukuoka Reit Corporation · TSE:8968
Fukuoka Reit — 25th fiscal period Earnings Presentation
55 slides from Fukuoka Reit's earnings presentation, April 2017
Slide 1: Overview of the 25th fiscal period performance
WMT Fay Fukuoka REIT Corporation >E Overview of the 25th fiscal period performance [8968] September 1$2016~February 28", 2017
Slide 2: Contents and disclaimer
Financial statements Business forecasts --:---:- es Overview of retail operation -------- Overview of office buildings operation Financial strategy ~ Asset’s growth Current situation of Fukuoka City ---- Fukuoka REIT —— ‘Regarding rounding of amounts, percentage, and ratios unless otherwise noted, i
Slide 3: Results and forecasts in dividends
Results and forecasts in dividends Dividend recovered to the 3,400 yen range by acquisition of property Financial statements 1
Slide 4: New acquisition in the 26th fiscal period
New acquisition in the 26th fiscal period Acquired a new logistics facility in a good location Financial statements 2
Slide 5: Financial highlights
Financial highlights Dividend per unit was 3,398 yen - unit : mm yen 5Figures rounded down to the nearest mm yen6 24th 25th Difference 26th 27th Category Aug. 31, 2016 Feb. 28, 2017 9 Aug. 31, 2017 Feb. 28, 2018 5forecast6 5forecast6 Operating revenues 8,234 9,730 1,496 8,109 8,125 ,Gain on sale of
Slide 6: Dividend track record
Dividend track record Keeping stable dividends The 25th fiscal period end February 28, 2017 Days in fiscal period 181 5semi-annual periods ending every February and August6 Dividend 5actual6 3,398 yen per unit Dividend yield 3.94 5Dividend / days in fiscal period ! 3656/ Unit price 5as of February 2
Slide 7: Balance sheets
Balance sheets 5compared with the previous fiscal period6 - unit : mm yen 5Figures rounded down to the nearest mm yen6 24th 25th Difference 24th 25th Difference Account Aug. 31, 2016 Feb. 28, 2017 Account Aug. 31, 2016 Feb. 28, 2017 9 9 Total current assets 9,701 9,579 51216 Total current liabilitie
Slide 8: Statements of Income compared with previous fiscal period
Statements of Income 5compared with previous fiscal period6 Dividend of 3,398 yen due to the disposition of two properties - unit : mm yen 5Figures rounded down to the nearest mm yen6 Sign indicates impact on profit 5unit : mm yen6 24th 25th Difference Account Aug. 31, 2016 Feb. 28, 2017 9 Operating
Slide 9: Statements of Income compared with forecast
Statements of Income 5compared with forecast6 Dividend 98 yen above forecast due to factors including decreases in various expenses - unit : mm yen 5Figures rounded down to the nearest mm yen6 Sign indicates impact on profit 5unit : mm yen6 Previous Forecast 25th Difference Account Feb. 28, 2017 9 O
Slide 10: Portfolio properties' occupancy rates
Portfolio properties' occupancy rates Maintained high occupancy rates *Historical occupancy rates 5the weighted average during the period6 Financial statements *Occupancy rates 5the weighted average during the period6 Investment Category 21st 22nd 23rd 24th 25th ratio Feb. 28, 2015 Aug. 31, 2015 Feb
Slide 11: Appraisal value
Appraisal value Unrealized gains5716 totaled 21,152 mm yen at the end of 25th fiscal period - unit : mm yen 5Figures rounded down to the nearest mm yen6 Appraisal value Difference Direct capitalization values Acquisition Book value Acquisition at 25th From From 25th 24th Real estate Property name pr
Slide 12: Business forecast (the 26th fiscal period)
Business forecast 5the 26th fiscal period6 Dividend recovery to the 3,400 yen range *Forecast in the 26th fiscal period - unit : mm yen 5Figures rounded down to the nearest mm yen) Sign indicates impact on profit 5unit : mm yen6 26th 26th 25th 26th 25th Forecast Forecast results forecast Account Res
Slide 13: Business forecast (the 27th fiscal period)
Business forecast 5the 27th fiscal period6 Dividend of 3,470 yen due to full-period contribution from LOGICITY Hisayama *Forecast in the 27th fiscal period - unit : mm yen 5Figures rounded down to the nearest mm yen) Sign indicates impact on profit 5unit : mm yen6 26th 27th 26th Account Forecast For
Slide 14: Active retail
Active retail Sales decrease at Canal City Hakata following a sharp increase in last year Overview of retail operation 12
Slide 15: Current situation at Canal City Hakata
Current situation at Canal City Hakata 5overall6 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 in April 2017 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 The average occupancy rate of office building in the 25th fiscal period was continuously increased Overview of office buildings operation 7Occupancy rates are calculated as a weighted average during period.,7Total leasable floor space is fig
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 A stable network of sponsor banks and other lenders Financial strategy 18
Slide 21: Financing condition
Financing condition Achievement of both interest cost reduction and borrowing term extension and diversification Financial strategy 19
Slide 22: List of borrowings
List of borrowings Stable debt financing As of February 28, 2017 Category Lender Balance5yen6 Drawdown Date Repayment Date Repayment Method Average Interest Rate Description Short-term debt Mitsubishi UFJ Trust and Banking Corporation 2,000,000,000 Mar.1, 2012 Mar.31, 2017 1.16973457 6 Sumitomo Mits
Slide 23: Growth of asset's size and LTV
Growth of asset’s size and LTV 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
ki Appendix
Slide 27: Profile
Profile Profile Investment unit price *Name Fukuoka REIT Corporation *Unit price 177,100 yen 5as of February 28, 20176 *Asset manager Fukuoka Realty Co., Ltd. Licensed by Fukuoka Local Finance Branch Bureau *Total number of investment units outstanding 747,000 units 5as of February 28, 20176 5financ
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 10-30% Bank of Japan Appendix Fukuoka City Bank Other Kyushu areas 5Including 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 February 28, 2017 Acquisition Total leasable Age Price Investment Acquisition Source Occupancy Number of Real estate property name floor space Primary tenants 5716 5mm yen6 ratio date 5736 536 rate tenants5746 5726 Canal City Hakata 20yr10m,,, 32,000 18.54 Nov.,9, 2004 Sponsor
Slide 31: Portfolio
Portfolio Fukuoka reit @ anal city Hakata @ Canal city Hakata-B © Park Place Oita © suntive city Kokura © square Mall Kagoshima Usuki @ Kumamoto intercommunity Sc @ Hanahata sc © Kurume Higashi Kushiwara SC © Ks Denki Kagoshima @ Marinos city Fuxuoka(Marina Side Building) @ Canal city Business Cente
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: Passive retail
Passive retail Kumamoto Intercommunity SC has recovered from the effects of the Kumamoto Earthquake. Appendix 5716The property was acquired on May 1, 2015, resulting in an investment period of 123 days. 5726Fukuoka REIT has entered into a master lease agreement (fixed rent) under which Fukuoka Jisho
Slide 39: Income and expenditure by properties (Active retail)
Income and expenditure by properties5Active retail6 - unit : mm yen 5Figures rounded down to the nearest mm yen6 25th 24th Forecast Difference Difference Category Canal City Hakata Canal City Hakata-B Park Place Oita SunLive City Kokura Total Total C A9B A9C A B 5716 5Length6 25th FP5Sep. 1, 2016 Fe
Slide 40: Income and expenditure by properties (Passive retail)
Income and expenditure by properties5Passive retail6 - unit : mm yen 5Figures rounded down to the nearest mm yen6 Marinoa City Square Mall AEON Hara Fukuoka 25th 24th Forecast Category Kumamoto Inter- Shopping Center Kurume Higashi K’s Denki Difference Difference Kagoshima Community SC Hanahata SC K
Slide 41: Income and expenditure by properties (Office buildings)
Income and expenditure by properties5Office buildings6 - unit : mm yen 5Figures rounded down to the nearest mm yen6 Canal City Tenjin Tenjin North 25th 24th Forecast Category Business Center Gofukumachi Sanix Hakata Taihaku Street Higashi Hie Nishi-Dori Front Total Total Difference C Difference Buil
Slide 42: Income and expenditure by properties (Others)
Income and expenditure by propertiesOthers6 - unit : mm yen 5Figures rounded down to the nearest mm yen6 Amex Aqualia Granfore Hotel Tosu LOGICITY 25th 24th Forecast City House Aqualia D-Wing Difference Difference Category Akasakamon Kego Yakuin FORZA Logistics Minato Total Total C Keyaki Dori Chiha
Slide 43: Income and expenditure by properties (Total)
Income and expenditure by properties5Total6 - unit : mm yen 5Figures rounded down to the nearest mm yen6 Forecast 25th Total 24th Total Difference Difference Category C A B A9B A9C 5716 5days6 181 184 536 Total leasing business revenues, 8,072 8,234 51616 8,052 20 Leasing revenue-real estate 7,603 7
Slide 44: Cash flow statements compared with previous fiscal period
Cash flow statements compared with previous fiscal period - unit : mm yen 5Figures rounded down to the nearest mm yen6 24th 25th Category Aug. 31, 2016 Feb. 28, 2017 Difference B9A A B Net cash provided by 5used in6 operating activities 4,336 3,685 56516 ,Net income before income taxes 939 4,199 3,2
Slide 45: Maintenance expenses, Capital expenditures, etc.
Maintenance expenses, Capital expenditures, etc. - unit : mm yen 5Figures rounded down to the nearest mm yen6 *Maintenance expenses, capital expenditures, depreciation, and taxes and other public charges Appendix +Capital expenditures of the 25th fiscal period +Planned capital expenditures of the 26
Slide 46: IR initiatives
IR initiatives BIR activities ©Major IR activities @For institutional investors + Results briefing roadshows in Japan and overseas + One-on-one meetings + Property tours @For overseas investors + Participation in global conferences in Japan + Overseas IR activities + Individual meetings in Japan A r
Slide 47: Asset management company's organization
Asset management company’s organization Appendix 45
Slide 48: Corporate governance
Corporate governance Appendix 46
Slide 49: Unitholders' data
Unitholders’ data Appendix 47
Slide 50: Unit price chart
Unit price chart 69,890 units — Investment unit price «+» Turnover (*2) | MMarket capitalization (as of February 28, 2017): 132,293 mm yen (yen) (unit) 300,000 Eq 30,000 April 27, 2015 4th PO 250,000 25,000 June 21, 2005 Listing March 1, 2013 200,000 3rd PO |} 20,000 March 1, 2011 2nd PO 150,000 15,
Slide 51: Analysis of earthquake risk in Kyushu
Analysis of earthquake risk in Kyushu All properties owned by Fukuoka REIT Corporation are covered by earthquake insurance Appendix 49
Slide 52: Implementation of urban redevelopment (Tenjin area)
Current situation of Fukuoka and Kyushu Implementation of urban redevelopment 5Tenjin area6 Appendix 50
Slide 53: Influx of visitors from within Japan and overseas
Current situation of Fukuoka and Kyushu Influx of visitors from within Japan and overseas Appendix 51
Slide 54: Inbound Visitor Situation
Current situation of Fukuoka and Kyushu Inbound Visitor Situation Appendix 52
Slide 55: Fukuoka Airport, Waterfront district
Current situation of Fukuoka and Kyushu Fukuoka Airport, Waterfront district Appendix 53
Fukuoka REIT — 25th fiscal period Earnings Presentation on 6ix