Fukuoka Reit Corporation · TSE:8968
Fukuoka Reit — 30th fiscal period Earnings Presentation
59 slides from Fukuoka Reit's earnings presentation, November 2019
Slide 1: Overview of the 30th fiscal period performance
Security code Overview of the 30th fiscal period performance 8968 March 1st,2019 August 31st,2019
Slide 2: Contents and notes
Financial statements 1 Business forecasts 4 Portfolio overview 6 Asset’s growth 14 Financial strategy 16 Appraisal value 18 Situation of Fukuoka and Kyushu 20 Sustainability 23 Appendix 24 ＊Regarding rounding of amounts, percentage, and ratios : unless otherwise noted, in these materials, monetary a
Slide 3: Topics of the 30th fiscal period
Topics of the 30th fiscal period 3,687 3,693 3,650 3,680 Internal Growth ◎Canal City Hakata 3,593 ・ While some tenants were affected by the decline in the number of tourists from South Korea from July, new Aqua Panorama content and new stores have successfully attracted more customers. ・ We expect a
Slide 4: Statements of Income (compared with previous fiscal period)
Statements of Income （compared with previous fiscal period） Dividend is 3,693 yen, up 6 yen compared to previous fiscal period, despite municipal property taxation on properties acquired in 28th and 29th fiscal periods - unit : mm yen （Figures rounded down to the nearest mm yen） Sign indicates impac
Slide 5: Statements of Income (compared with forecast)
Statements of Income （compared with forecast） The dividend of 3,693 yen is 13 yen higher than forecast - unit : mm yen （Figures rounded down to the nearest mm yen） Sign indicates impact on profit unit : mm yen 30 th A 30 th B Difference ■Operating profit and loss Account Previous Forecast 〜Aug. 31,
Slide 6: Business forecast (31st fiscal period, Feb. 2020)
Business forecast （the 31st fiscal period, Feb. 2020） Dividend revised to 3,650 yen in anticipation of possible drop in the number of travelers to Japan from South Korea Forecast in the 31st fiscal period - unit : mm yen （Figures rounded down to the nearest mm yen) Sign indicates impact on profit （u
Slide 7: Business forecast (32nd fiscal period, Aug. 2020)
Business forecast （the 32nd fiscal period, Aug. 2020） Operating revenues expected to increase due to office rent increases Forecast in the 32nd fiscal period - unit : mm yen （Figures rounded down to the nearest mm yen) Sign indicates impact on profit （unit : mm yen） 31st 32nd 31st ■Variance from upd
Slide 8: Current situation at Canal City Hakata (overall) ①
Current situation at Canal City Hakata （overall）① While some tenants were affected by the decline in tourist arrivals from South Korea from July, the number of visitors and sales were strong in general ●Canal City Hakata Rents of Canal City Hakata/Canal City Hakata B ●Canal City Hakata・B Sales（annua
Slide 9: Current situation at Canal City Hakata (overall) ②
Current situation at Canal City Hakata （overall）② Aiming to be an international SC （shopping center） that is the most fun in Asia Provision of experiential value and collaboration with the canal area community Collaborations with popular content providers ◎Kirby Café ◎GUMDAM ＊Image ©Nintendo / HAL L
Slide 10: Situation of Park Place Oita and Konoha Mall Hashimoto
Situation of Park Place Oita and Konoha Mall Hashimoto ●Park Place Oita Sales（annual total） 24.9 bn yen ●Konoha Mall Hashimoto Sales（annual total（＊）） 15.9 bn yen Sep. 2018 - Aug. 2019 Sep. 2018 - Aug. 2019 YoY（0.8）% YoY（1.2）% Though sales dipped temporarily due to the impact of a Revenue was stable
Slide 11: Situation of SunLive City Kokura and Tissage Hotel Naha
Situation of SunLive City Kokura and Tissage Hotel Naha ●SunLive City Kokura 2018 Sales年（annual 9月〜2019total 年（＊ 81月 ）） - ●Tissage Hotel Naha 29th Feb. 2019） 30th Aug. 2019） Room occupancy rates 86.6％ 87.2％ Sep. 2018 - Aug.（注 売上（年間計） 2019 1） YoY（3.9）% ADR （＊2） 9,378 yen 9,379 yen As temperatures wer
Slide 12: Fukuoka office market
Fukuoka office market Vacancy rate below 2%, rent has risen for 26 consecutive months Fukuoka business district / Vacancy rates and supply and demand of office buildings Fukuoka business district / Average asking rents tsubo Completed floor spaceotal floor space left axis Net absorptionabsorption de
Slide 13: Office demand underpinning the thriving Fukuoka office market
Office demand underpinning the thriving Fukuoka office market Trend in average net absorption absorption demand for the past 10 years Office demand underpinning the office market （tsubo） 25,000 average for the past 10 years average for the past 5 years 20,000 9,085 tsubo （30,033 ㎡） 13,461 tsubo （44,
Slide 14: Historical and projected office buildings' occupancy rates
Historical and projected office buildings’ occupancy rates Maintaining high occupancy levels while steadily increasing rent per unit area （％） 1 Canal City Business 100.0 98.9 99.8 100.0 100.0 Major tenant replacements Center Building 90.0 96.1 Total leasable floor space：23,031.44㎡ 80.0 Sanix Hakata
Slide 15: Office building rent revisions and tenant replacement situation
Office building rent revisions and tenant replacement situation The amount of rent increase expanded from the 30th fiscal period Change in monthly rent due to rent revisions and Newly occupied floor space and number of new occupants tenant replacements （＊1） （thousand yen） tsubo Newly occupied floor
Slide 16: Historical trends of asset size by investment type
Historical trends of asset’ s size by investment type（based on acquisition price） Expansion of asset size to 195,979 million yen （29 properties） Retail Office buildings Investment ratios by investment type （Investment policy changed in March 2019） Acquired from sponsors（＊） Residence Logistics Hotel
Slide 17: Sponsor pipeline (Fukuoka Jisho Group)
Sponsor pipeline （ Fukuoka Jisho Group ） Overview of Fukuoka Jisho Co., Ltd. Major properties owned by Fukuoka Jisho Group Total floor Name Fukuoka Jisho Co., Ltd. Use No. Name Year of completion space 1 Fukuoka Daiichi Building 1961 9,962㎡ Established July 19, 1961 2 Fukuoka Kogin Building 1970 15,
Slide 18: Key financing events in the 30th fiscal period
Key financing events in the 30th fiscal period Achievement of both interest cost reduction, borrowing term extension and diversification Long-term financing and repayments from the 30th fiscal period onward Green finance Date Lender Amount mm yen Term Interest rate Fixed/Floating （1） Green Finance F
Slide 19: Financing condition
Financing condition A stable network of sponsor banks and other lenders LTV Average interest rate （＊1） and duration Fixed and floating rate （％） Average interest rate Duration years （years） 50 （％） 1.3 8 1.2 7 Floating 45 1.1 6.4 6 9.8％ 6.3 6.0 6.0 1. 0 5 5.4 40 0.9 4 77,500 Fixed mm yen 39.3 38.9 39.
Slide 20: Appraisal value
Appraisal value Maintained unrealized gains for all properties （＊1） - unit : mm yen （Figures rounded down to the nearest mm yen） Appraisal value Difference Direct capitalization values Acquisition Acquisition Book value From From Property name price 30th 29th 30th 29th Difference Appraiser cap rate
Slide 21: Historical appraisal values (unrealized gains)
Historical appraisal values （unrealized gains） Maintained continuously since the 3rd fiscal period （Unrealized gains 34,087 mm yen, 18.6% ratio of unrealized gains at the 30th ） （＊1） Historical appraisal values （mm yen） Book value at the end of period( * 2) Unrealized gains = (latest appraisal value
Slide 22: The condition of suburb area in Fukuoka
The condition of suburb area in Fukuoka A B C D E F Vegefru stadium 1km (Fresh produce market) Kyushu Sangyo 500m Shikanoshima 《Redevelopment Project in Fukuoka City》 Island Island City Logistics Development Project 28 Fukuoka Urban University 29 Ni izu Ka Expressway Route 6 sh ka hi The Tenjin Big
Slide 23: Current situation of Fukuoka and Kyushu
Current situation of Fukuoka and Kyushu Number of overseas visitors from China and Southeast Asia increasing Change in number of overseas visitors Fukuoka City Breakdown of overseas visitors in 2018 thousands thousands people people Fukuoka Airport Others 3,500 3.1％ 103 Port of Hakata Number of pers
Slide 24: Functional Enhancement of Fukuoka Airport
Functional Enhancement of Fukuoka Airport Initiatives to increase runway handling capacity and expand number of routes Current status of Fukuoka Airport Fukuoka Airport Domestic terminal building ◎Ranking by number of arrivals and departures and number of passengers in FY2018 Domestic terminal build
Slide 25: Sustainability
Sustainability Identification of materially significant issues as of September 2019 materially significant issues Policies and targets Related SDGs ● Coordinate with Property Management and Building Management on promotion of management and reduction of energy Reduction of environmental load consump
Slide 26: Appendix
サステナビリティへの取り組み 24 Appendix
Slide 27: Profile
Profile Special features of Fukuoka REIT Corporation Portfolio summary （＊1） ◎Investment type Proven track record over 30 fiscal periods as a region-specific REIT （based on acquisition price） 1 Asset management leveraging our in-depth knowledge of the real estate environment Number of properties / As
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 THE BANK OF FUKUOKA 5％ THE NISHINIPPON CITY BANK, LTD. 5％ 5％ 5％ 60-90％ Fukuoka metropolitan area THE BANK OF FUKUOKA, LTD. THE NISHI-NIPPON Development CITY BANK, LTD. Bank of Japan Inc. SA
Slide 29: Population movement of Fukuoka metropolitan area
Population movement of Fukuoka metropolitan area The population of Fukuoka metropolitan area continues to increase Population trends of major metropolitan areas Number of population growth in Fukuoka City （index） thousands 150 Actual figures Future projection people Number of population in Fukuoka C
Slide 30: Portfolio properties' occupancy rates
Portfolio properties' occupancy rates Maintained high occupancy rates Historical occupancy rates the weighted average during the period Fukuoka REIT Corporation（＊1） J-REIT average（＊2） （％） 99.8 99.7 99.6 99.6 99.8 99.7 99.6 99.7 99.6 100.0 99.4 99.5 99.5 99.4 99.2 99.2 99.3 99.1 99.3 99.1 99.3 99.0 9
Slide 31: Dividend and NAV per unit
Dividend and NAV per unit ◎Dividend per unit ■17th ■22nd ■29th Tenjin Nishi-Dori Center Building 2,600 LOGICITY Minato Kashii 8,150 ■26th Tissage Hotel Naha 2,835 Marinoa City Fukuoka（Marina Side Building） 5,250 LOGICITY Hisayama 5,050 ■14th ■18th Canal City Hakata B 28,700 D-Wing Tower 2,800 ■21st
Slide 32: Earthquake risk in Fukuoka, etc
Earthquake risk in Fukuoka, etc All properties owned by Fukuoka REIT are covered by earthquake insurance Probabilistic earthquake prediction map Example of measures taken by the Fukuoka City government against other natural disasters Fukuoka City flooding countermeasures Probability of occurrence of
Slide 33: ESG (Environment)
ESG （Environment） Environment Initiatives of owned properties Certification from external organizations ■Retail At commercial premises, we aim to create environment-friendly facilities and ◎DBJ Green Building Certification are implementing initiatives for energy and resource saving. Fukuoka REIT has
Slide 34: ESG (Society)
ESG （Society） Initiatives for employees and tenants ◎Initiatives for employees ◎Initiatives for tenants 《Fukuoka Realty: Numbers of credentialed personnel》 《Support for flexible working styles》 《Training for employees》 Improved the employee lounge environment at Company-owned ＊August 31, 2019 Konoha
Slide 35: ESG (Governance)
ESG （Governance） Governance System Governance structure Fukuoka Realty has established a Basic Policy on Compliance, as well as compliance regulations and other internal rules to prevent c onf licts of interest. We c onduct c onf lict of interest risk management pertaining to our dealings with stake
Slide 36: IR initiatives
IR initiatives IR activities ◎For institutional investors ◎For overseas investors ◎For individual investors 17 times （＊） ◎Internal IR activities ◎Website ・Results briefing Tokyo Participation of domestic global Kyushu IR fair 2018 Live streaming of financial results presentation ・Domestic roadshows:
Slide 37: Asset management company's organization
Asset management company’ s organization Shareholders General Meeting Corporate Profile Established : December 26, 2003 Paid-in capital ： 200 million yen Auditor Certifications, etc. : ◎Obtained license for real estate transaction services February 27, 2004／ Board of Directors License No. 4 15052 is
Slide 38: Unitholders' data
Unitholders’ data Distribution by investor category breakdown of investment units Major investors at the end of the 30th FP （units） 796,000 796,000 796,000 （As of August 31, 2019） 800,000 Investment Percentage of total 747,000 747,000 10.61% 10.82% 10.41% Rank Name units held number of investment [8
Slide 39: Unit price chart
Unit price chart Investment unit price （＊1） Turnover （＊2） ■Market capitalization as of Aug. 31, 2019 ：141,926 mm yen （yen） （units） 300,000 72,000 30 th April 27, 2015 4th PO 250,000 60,000 June 21, 2005 Listed March 1, 2018 March 1, 2013 5th PO 200,000 3rd PO 48,000 March 1, 2011 2nd PO 150,000 36,0
Slide 40: Financial highlights
Financial highlights Dividend per unit was 3,693 yen - unit : mm yen （Figures rounded down to the nearest mm yen） 26 th 27 th 28th 29th 30th Difference 31st 32nd Category 〜 Aug. 31, 2017 Feb. 28, 2018 〜 Aug. 31, 2018 Feb. 28, 2019 〜 Aug. 31, 2019 B A Feb. 29, 2020 Aug. 31, 2020 A B forecast forecast
Slide 41: Balance sheets (compared with the previous fiscal period)
Balance sheets （compared with the previous fiscal period） - unit : mm yen （Figures rounded down to the nearest mm yen） 29th 30th Difference 29th 30th Difference Account Feb. 28, 2019 Aug. 31, 2019 Account Feb. 28, 2019 Aug. 31, 2019 A B B－A A B B－A Total current assets 9,345 10,234 889 Total current
Slide 42: 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） 29th A 30th B Difference Category 〜Feb. 28, 2019 〜Aug. 31, 2019 B－A Net cash provided by （used in） operating activities 4,832 4,863 30 Profit before income taxes 2,935 2,939 3 Depre
Slide 43: Repair and maintenance expenses, capital expenditures, and depreciation
Repair and maintenance expenses, capital expenditures, and depreciation Repair and maintenance expenses, capital expenditures, and depreciation （mm yen） - unit : mm yen Figures rounded down to the nearest mm yen 2,400 1,800 1,602 1,622 1,651 1,662 1,680 1,474 1,500 1,180 1,200 947 741 657 600 596 60
Slide 44: Income and expenditure by properties (Retail①)
Income and expenditure by properties （Retail①） - unit : mm yen （Figures rounded down to the nearest mm yen） 30th 29th Difference Forecast Difference Konoha Mall Category Canal City Hakata Canal City Hakata・B Park Place Oita SunLive City Kokura Total Total Hashimoto A B A－B C A－C （＊1） 30th FP （Mar. 1
Slide 45: Income and expenditure by properties (Retail②)
Income and expenditure by properties （Retail②） - unit : mm yen （Figures rounded down to the nearest mm yen） Marinoa City 30th 29th Difference Forecast Difference Square Mall Kumamoto Inter- Kurume Higashi K’ s Denki Fukuoka Total Total Category Kagoshima Hanahata SC Community SC Kushiwara SC Kagoshi
Slide 46: 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 30th 29th Difference Forecast Difference Gofukumachi Taihaku Street Higashi Hie Tenjin North Higashi Hie Business Sanix Hakata Nishi-Dori Total Total Category Busine
Slide 47: 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 30th 29th Difference Forecast Difference City House Aqualia D-Wing Tissage LOGICITY Category Akasakamon Yakuin FORZA Logistics Minato Total Total Keyaki Dori C
Slide 48: Income and expenditure by properties (Total)
Income and expenditure by properties （Total） - unit : mm yen （Figures rounded down to the nearest mm yen） 30th 29th Difference Forecast Difference Category Total Total A B C A C A B ＊ （Length） 184 days 181 days 3 days ①Total leasing business revenues 9,231 9,242 （11） 9,305 （73） Leasing revenue-real
Slide 49: List of borrowings
List of borrowings (As of August 31, 2019) Balance Drawdown Repayment Term Fixed/ Average Interest Balance Drawdown Repayment Term Fixed/ Average Interest Category Lender Category Lender （mm yen） Date Date （year） Floating Rate （mm yen） Date Date （year） Floating Rate MUFG Bank 500 Sep.25, 2014 Sep.25
Slide 50: Portfolio table
Portfolio table （As of August 31, 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 23yr 4m 32,000 16.3％ Nov. 9, 2004 Sponsor 46,604.75
Slide 51: Portfolio map
Portfolio map ne i Li 4 ich Ka Nis uka Fukuoka City Shikanoshima kam iz Island City Na Kyush hit Lin no- 29 Fukuoka City ets e i- 28 Um u JR u Uminonakamichi Fukuoka Expres Seaside Park Saga 27 Oita ine ay s ii L sw way 9 25 JR Chihaya Stn. sh res 22 Ka 3 Ka Exp sh ii L Najima Stn. 3 n ba ine Ur Hak
Slide 52: Portfolio
Portfolio Retail 11 properties Canal City Hakata Canal City Hakata・B Park Place Oita SunLive City Kokura Konoha Mall Hashimoto Square Mall Kagoshima Usuki Kumamoto Intercommunity SC Hanahata SC Office buildings 8 properties Kurume Higashi Kushiwara SC K’ s Denki Kagoshima Marinoa City Fukuoka（Marina
Slide 53: Logistics market in Northern part of Kyushu
Logistics market in Northern part of Kyushu Major logistics area Supply and demand of logistic facilities and vacancy rates （tsubo） （％） Fukuoka 10km 50,000 new supply new demand 20 Urban Expressway Island-city Line （maintenance） LOGICITY Hisayama vacancy rates KashiiHama 35 40,000 16 Kasine JR ii LO
Slide 54: Top tenants by leased floor area
Top tenants by leased floor area Ordinary lease Fixed-term lease Lessee Tenant Share of total leased space 31st 32nd 33rd Remaining lease term （＊1） 〜Feb. 29, 2020 〜Aug. 31, 2020 〜Feb. 28, 2021 (years) （＊2） ●SunLive City Kokura 5 1 SunLive Co., Ltd. SunLive 11.2％ ●Konoha Mall Hashimoto 11 2 AEON Kyus
Slide 55: Breakdown of variable rents
Breakdown of variable rents Breakdown of active retail rents by property Breakdown of active retail rents Portfolio overall Fixed rents（＊1） Variable rent s（＊2） ◎30th ◎29th mm yen mm yen 3,000 2,838 2,841 3,000 2,759 2,734 590 Variable rents Variable rents 530 628 519 298 318 296 317 20.4％ 12.9％ （＊3）
Slide 56: The condition of Fukuoka city center
The condition of Fukuoka city center Nanakuma subway line extension project will be completed by FY2022 箱 下鉄 博多小学校 550 空港通 線 蔵本 吉塚1丁目 崎 地 A B C D E F 中呉服町 福岡高校 天神北出入口 Yutaka 1chome Naraya-machi Fukuoka Dai-ichi Kamigofuku -machi 552 Shiminkaikan-mae Building Gofuku machi 13 Gofukumachi Katakasu i Ka
Slide 57: Connection from Hakata area / Tenjin area
Connection from Hakata area / Tenjin area Enhanced accessibility between Hakata Station and Canal City Hakata Impact of Nanakuma subway line extension scheduled to commence operations in FY2022 東光2丁目 Hakata Gion Shokokaigisho A floor plan Kamikawabata-machi M-SQUARE Iriguchi Hakata-ekimae GionmachiN
Slide 58: Redevelopment in Tenjin area (Tenjin Big Bang)
Redevelopment in Tenjin area （Tenjin Big Bang） Preparation made for functional renewal of buildings in the Tenjin district ◎Creation of an attractive environment that promotes Tenjin as a start-up location ① Deregulation of floor space ratios ②Relaxation of restrictions Issues pertaining to function
Slide 59: Redevelopment in Hakata area: Hakata Connected
Redevelopment in Hakata area Hakata Connected Initiative to expand the vitality and bustle of Hakata Station area out further to the surroundings approx. 500m radius from the station, covering about 80 hectares Project for effective utilization ◎Hakata Connected Bonus ◎Special approval pertaining of
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