Fukuoka Reit Corporation · TSE:8968
Fukuoka Reit — 24th fiscal period Earnings Presentation
57 slides from Fukuoka Reit's earnings presentation, October 2016
Slide 1: Overview of the 24th fiscal period performance
Fukuoka REIT Corporation Overview of the 24th fiscal period performance [8968] March’. 2016 ~August315", 2016
Slide 2: Contents and disclaimer
Financial statements -. Business forecasts -- Overview of retail operation —--- Overview of office buildings operation - Financial strategy ~- Asset’s growth Current situation of Fukuoka City - Fukuoka REIT = ‘*Regarcing rounding of amounts, percentage, and ratios uniess otherwise noted, in these ma
Slide 3: Sold assets and acquired a new property by the sponsor pipeline
Sold assets and acquired a new property by the sponsor pipeline Sold two assets and acquired one property in the 25th fiscal period Financial statements 1
Slide 4: Kumamoto Earthquake - Inbound Visitor Situation
Kumamoto Earthquake（＊1）- Inbound Visitor Situation Kumamoto Intercommunity SC resumes business Financial statements 2
Slide 5: Current condition of inbound visitors
Current condition of inbound visitors Favorable inbound customer trends Financial statements 3
Slide 6: Results and forecasts in dividends
Results and forecasts in dividends Financial statements 4
Slide 7: Disposition assets
Disposition assets Disposition of assets which are AEON Hara Shopping Center and Aqualia Kego in the 25th fiscal period Financial statements 5
Slide 8: New acquisition in the 25th fiscal period
New acquisition in the 25th fiscal period Acquired Sports Club NAS Park Place Oita utilizing the sponsor pipeline Financial statements 6
Slide 9: Financial highlights
Financial highlights Dividend per unit was 3,479 yen - unit : mm yen （Figures rounded down to nearest mm yen） The difference between accounting treatment and tax treatment 23rd 24th Difference 25th 26th Category 〜 Feb. 29, 2016 〜 Aug. 31, 2016 B－A 〜 Feb. 28, 2017 〜 Aug. 31, 2017 A B （forecast） （fore
Slide 10: Dividend's track record
Dividend’s track record Aim for rapid recovery to the 3,400 yen range 0Dividend results / forecasts 18th 19th 20th 21st 22nd 23rd 24th 25th 26th Category Aug. 31, 2013 Feb. 28, 2014 Aug. 31, 2014 Feb. 28, 2015 Aug. 31, 2015 Feb. 29, 2016 Aug. 31, 2016 Feb. 28, 2017 Aug. 31, 2017 =forecast> =forecast
Slide 11: Balance sheets
Balance sheets （compared with the previous fiscal period） - unit : mm yen （Figures rounded down to nearest mm yen） 23rd 24th Difference 23rd 24th Difference Account 〜Feb. 29, 2016 〜Aug. 31, 2016 Account 〜Feb. 29, 2016 〜Aug. 31, 2016 B－A B－A A B A B Total current assets 9,082 9,701 619 Total current
Slide 12: Statements of Income (compared with previous fiscal period)
Statements of Income （compared with previous fiscal period） Dividend below previous fiscal period 3,479 yen due to the impact of change in inbound consumption trends and the Kumamoto Earthquake - unit : mm yen （Figures rounded down to nearest mm yen） Sign indicates impact on profit （unit : mm yen） 2
Slide 13: Statements of Income (compared with forecast)
Statements of Income （compared with forecast） Dividend below forecast at 3,479 yen due to the impact of change in inbound consumption trends and the Kumamoto Earthquake - unit : mm yen （Figures rounded down to nearest mm yen） Sign indicates impact on profit （unit : mm yen） Previous Forecast 24th Dif
Slide 14: Portfolio properties' occupancy rates
Portfolio properties' occupancy rates Maintained high occupancy rates 0Historical occupancy rates =the weighted average during the period> Financial statements 0Occupancy rates =the weighted average during the period> Investment Category 20th 21st 22nd 23rd 24th Percentage Aug. 31, 2014 Feb. 28, 201
Slide 15: Appraisal value
Appraisal value Unrealized gains（＊1） totaled 24,255 mm yen at the end of 24th fiscal period （increase of 4,425 mm yen compared with previous fiscal period） - unit : mm yen （Figures rounded down to nearest mm yen） Appraisal value Difference Direct capitalization values Acquisition Book value Acquisit
Slide 16: Business forecast (the 25th fiscal period)
Business forecast =the 25th fiscal period> Dividend will decrease from the previous fiscal period to 3,300 yen due to the sale of two properties 0Forecast in the 25th fiscal period Sign indicates impact on profit =unit : mm yen> - unit : mm yen =Figures rounded down to nearest mm yen) 25th 25th 24th
Slide 17: Business forecast (the 26th fiscal period)
Business forecast =the 26th fiscal period> Dividend will be flat due to a decrease in debt-related expenses 0Forecast in the 26th fiscal period - unit : mm yen =Figures rounded down to nearest mm yen) Sign indicates impact on profit =unit : mm yen> 25th 26th 25th Account Forecast Forecast forecast a
Slide 18: Active retail
Active retail Sales decrease at Canal City Hakata following a sharp increase in the previous year Overview of retail operation 16
Slide 19: Current situation at Canal City Hakata
Current situation at Canal City Hakata （overall） Canal City Hakata, an evolving “urban theater” Overview of retail operation 17
Slide 20: Breakdown of active retail rents
Breakdown of active retail rents Overview of retail operation 18
Slide 21: Historical and projected office buildings' occupancy rates
Historical and projected office buildings’ occupancy rates The average occupancy rate of office building in the 24th fiscal period was continuously increased Overview of office buildings operation （＊2） ＊Occupancy rates are calculated as a weighted average during period. ＊Total leasable floor space i
Slide 22: Fukuoka office market
Fukuoka office market Vacancy rate declined to the lower 5% range, and supply will remain limited in the future Overview of office buildings operation 20
Slide 23: Key financing events in the 24th fiscal period
Key financing events in the 24th fiscal period A stable network of sponsor banks and other lenders Financial strategy 21
Slide 24: Financing condition
Financing condition Achievement of both interest cost reduction and borrowing term extension and diversification Financial strategy 22
Slide 25: List of borrowings
List of borrowings Stable debt financing (As of August 31, 2016) Category Lender Balance（yen） Drawdown Date Repayment Date Repayment Method Average Interest Rate Description Short-term debt ｰ - - - - - - Sumitomo Mitsui Trust Bank 600,000,000 Sep.28, 2012 Sep.30, 2016 0.46182％（※1）（※5） The Bank of Fu
Slide 26: Growth of asset's size and LTV
Growth of asset’s size and LTV Asset’s growth 24
Slide 27: The condition of Fukuoka City Center
The condition of Fukuoka City Center Main sponsor development is progressing Current situation of Fukuoka City 25
Slide 28: 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 26
Slide 29: Appendix
ki Appendix
Slide 30: Profile
Profile Profile Investment unit price ■Name Fukuoka REIT Corporation ■Unit price 186,100 yen （as of August 31, 2016） ■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, 2016） （financial
Slide 31: A real estate investment trust specializing in regional properties
A real estate investment trust specializing in regional properties 0Sponsors 0Investment policy 1Investment 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 =Including Okinawa and Y
Slide 32: Population movement of Fukuoka metropolitan area
Population movement of Fukuoka metropolitan area The population of Fukuoka metropolitan area continues to increase Appendix 30
Slide 33: Portfolio table
Portfolio table (As of August 31, 2016) Acquisition Total leasable Age Price Investment Acquisition Source Occupancy Number of Real estate property name floor space Primary tenants （＊1） （mm yen） ratio timing （＊3） （㎡） rate tenants（＊4） （＊2） ①Canal City Hakata 20yr 4m 32,000 17.8％ Nov. 9, 2004 Sponsor
Slide 34: Portfolio
Portfolio Fukuoka City Fukuoka rei @ Canal City Hakata @ Canal City HakataB © Park Place Oita @ SunLiveCity Kokura e Square Mall Kagoshima Usuki e Kumamoto Intercommunity SC e AEON Hara Shopping Center («1 @ Hanahata SC ro} Kurume Higashi Kushiwara SC @ K's Denki Kagoshima @ Marina City Fukuoka (Mar
Slide 35: Portfolio: Active retail
Portfolio : Active retail Appendix 33
Slide 36: Portfolio: Active retail
Portfolio : Active retail Appendix 34
Slide 37: Portfolio: Passive retail
Portfolio : Passive retail Appendix 35
Slide 38: Portfolio: Office buildings
Portfolio : Office buildings Appendix 36
Slide 39: Portfolio: Others
Portfolio : Others Appendix 37
Slide 40: Top tenants by leased floor area
Top tenants by leased floor area Appendix 38
Slide 41: Passive retail
Passive retail Kumamoto Intercommunity SC’s NOI decreased due to the impact of the Kumamoto Earthquake Appendix （＊1） The property was acquired on May 1, 2015, resulting in an investment period of 123 days. （＊2） Fukuoka REIT has entered into a master lease agreement (fixed rent) under which Fukuoka J
Slide 42: Income and expenditure by properties (Active retail)
Income and expenditure by properties （Active retail） - unit : mm yen （Figures rounded down to nearest mm yen） 24th 23rd 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） 24th fiscal period（March 1, 2016 〜
Slide 43: Income and expenditure by properties (Passive retail)
Income and expenditure by properties （Passive retail） - unit : mm yen （Figures rounded down to nearest mm yen） Marinoa City Square Mall Fukuoka 24th 23rd Forecast Category Kumamoto Inter- AEON Hara Kurume Higashi K’s Denki Difference Difference Kagoshima Community SC Shopping Center Hanahata SC Kush
Slide 44: Income and expenditure by properties (Office buildings)
Income and expenditure by properties （Office buildings） - unit : mm yen （Figures rounded down to nearest mm yen） Canal City Tenjin Tenjin North 24th 23rd Forecast Category Business Center Gofukumachi Sanix Hakata Taihaku Street Higashi Hie Nishi-Dori Front Total Total Difference C Difference Buildin
Slide 45: Income and expenditure by properties (Others)
Income and expenditure by properties (Others） - unit : mm yen （Figures rounded down to nearest mm yen） Amex Granfore Hotel Tosu LOGICITY 24th 23rd Forecast City House Aqualia Aqualia D-Wing Difference Difference Category Akasakamon Yakuin FORZA Logistics Minato Total Total C Keyaki Dori Kego Chihaya
Slide 46: Income and expenditure by properties (Total)
Income and expenditure by properties（Total） - unit : mm yen （Figures rounded down to nearest mm yen） Forecast 24th Total 23rd Total Difference Difference Category C A B A－B A－C （＊1） （Length） 184 182 2 （days） ①Total leasing business revenues 8,234 8,343 （109） 8,412 （178） Leasing revenue-real estate 7
Slide 47: Cash flow statements
Cash flow statements (compared with previous fiscal period) - unit : mm yen （Figures rounded down to nearest mm yen） 23rd 24th Category 〜Feb. 29, 2016 〜Aug. 31, 2016 Difference B－A A B Net cash provided by （used in） operating activities 4,174 4,336 162 Net income before income taxes 2,670 939 （1,730
Slide 48: Maintenance expenses, etc.
Maintenance expenses, etc. - unit : mm yen （Figures rounded down to nearest mm yen） ■Maintenance expenses, capital expenditures, depreciation, and taxes and fees Appendix ◎Capital expenditures of the 24th fiscal period ◎Planned capital expenditures of the 25th and 26th - unit : mm yen （Figures round
Slide 49: IR initiatives
IR initiatives GIR activities Major IR activities ©For institutional investors + Results briefing roadshows in Japan and overseas + One-on-one meetings + Property tours ©For overseas investors A results briefing for analysts and institutional investors + Participation in global conferences in Japan
Slide 50: CSR initiatives
CSR initiatives Real Estate, Economics and Finance Gathering Approx. 313 representatives of local real estate companies, financial institutions, and government agencies participated in the 9th Real Estate, Economics and Finance Gathering, which contributed to networking and further stimulation of th
Slide 51: Asset management company's organization
Asset management company’s organization Appendix 49
Slide 52: Corporate governance
Corporate governance Initiatives on Risk Management and Compliance Appendix 50
Slide 53: Unitholders' data
Unitholders’ data Appendix 51
Slide 54: Unit price chart
Unit price chart = 69,890 units —— Investment unit price (+1 Turnover (+2) | MMarket capitalization (as of August 31,2016) : 139,016 mm yen (yen) 300,000 April 27, 2015 Price per unit of the Sth issue 250,000 25,000 June 21, 2005 Initia! public ctfering price March 1, 2013 200,000 ofthe Save 20,000
Slide 55: Analysis of earthquake risk in Fukuoka
Analysis of earthquake risk in Fukuoka All properties owned by Fukuoka REIT are covered by earthquake insurance Appendix 53
Slide 56: Strengths of Fukuoka and Kyushu①
Strengths of Fukuoka and Kyushu① Appendix 54
Slide 57: Strengths of Fukuoka and Kyushu②
Strengths of Fukuoka and Kyushu② Appendix Source: Prepared by Fukuoka Realty based on information published by Fukuoka City 55
Fukuoka REIT — 24th fiscal period Earnings Presentation on 6ix