Fukuoka Reit Corporation · TSE:8968
Fukuoka Reit — 19th fiscal period Earnings Presentation
55 slides from Fukuoka Reit's earnings presentation, April 2014
Slide 1: Overview of the 19th fiscal period performance
= l ie wt Fukuoka REIT Corporation Overview of the 19th fiscal period performance [8968] September 1",2013~February 28t",2014
Slide 2: Contents and disclaimer
Financial statements -- Business forecasts --- Financial strategy 00s Overview of retail operation... Overview of office buildings operation External growth Fukuoka REIT _ ‘* Regarding rounding of amounts, percentage, and ratios: unless otherwise noted, in these materias, monetary amounts are rounde
Slide 3: Topics for the 19th and the 20th fiscal period
Topics for the 19th and the 20th fiscal period Financial statements 1
Slide 4: Financial highlights
Financial highlights Dividend per unit : 16,219 yen - unit : mm yen (Figures rounded down to nearest mm yen) 15th 16th 17th 18th 19th 20th 21th Category 〜 Feb 29, 2012 〜 Aug 31, 2012 〜 Feb 28, 2013 〜 Aug 31, 2013 〜 Feb 28, 2014 Variation 〜 Aug 31, 2014 〜 Feb 28, 2015 A B B-A （forecast） （forecast） Op
Slide 5: Dividend's track record
Dividend’s track record （A 5-for-1 split of investment unit from the 20th fiscal period） Keeping a stable dividend A 5-for-1 split of investment unit was effectuated on March 1, 2014. ■Dividend results / forecasts 13th 14th 15th 16th 17th 18th 19th 20th 21th Category 〜 Feb 28, 2011 〜 Aug 31, 2011 〜
Slide 6: Balance sheets
Balance sheets （compared with the previous fiscal period） Refinancing of long-term debt through issuance of investment corporation bonds - unit : mm yen （Figures rounded down to nearest mm yen） 18th 19th 18th 19th Account 〜Aug 31, 2013 〜Feb 28, 2014 Variation Account 〜Aug 31, 2013 〜Feb 28, 2014 Vari
Slide 7: Income statements (compared with previous fiscal period)
Income statements (compared with previous fiscal period) Temporary decrease in revenues prior to expansion of Park Place Oita in preparation for the 20th fiscal period - unit : mm yen （Figures rounded down to nearest mm yen） Sign indicates impact on net income (unit : mm yen) Account 18th 19th Varia
Slide 8: Income statements (compared with forecast)
Income statements (compared with forecast) Net income approximately in line with forecast - unit : mm yen （Figures rounded down to nearest mm yen） Sign indicates impact on net income (unit : mm yen) Previous 19th Variation Account Forecast 〜 Feb 28, 2014 A B B－A Operating revenues 7,556 7,574 ① 18 L
Slide 9: Portfolio properties' occupancy rate
Portfolio properties' occupancy rate Maintained high occupancy rate ■Historical occupancy rates (the weighted average during the period) ■物件稼働率推移（期中加重平均） Financial statements ■Occupancy rates 15th 16th 17th 18th 19th Investment Category 〜 Feb 28, 2013 〜 Aug 31, 2013 〜 Feb 28, 2014 percentage 〜 Feb 2
Slide 10: Appraisal value
Appraisal value Unrealized gains（＊1） totaled 9,138 mm yen at end of the 19th fiscal period (increase of 895 mm yen compared with previous fiscal period) - unit : mm yen （Figures rounded down to nearest mm yen） Appraisal values Variation Direct capitalization values Amount From amount Acquisition Fro
Slide 11: New Acquisition in the 20th fiscal period
New Acquisition in the 20th fiscal period Acquired a logistics facility in Tosu City, Saga prefecture ■Tosu Logistics Center Business forecasts 9
Slide 12: Business forecast (the 20th fiscal period)
Business forecast (the 20th fiscal period) Acquisition of Tosu Logistics Center, Expansion floor space in Park Place Oita, Renovation of SunLive City Kokura ■Forecast in the 20th fiscal period - unit : mm yen （Figures rounded down to nearest mm yen） Sign indicates impact on net income (unit : mm yen
Slide 13: Business forecast (the 21th fiscal period)
Business forecast (the 21th fiscal period) Recovery of office vacancy rate and reduction of refinance cost ■Forecast in the 21th fiscal period - unit : mm yen （Figures rounded down to nearest mm yen） Sign indicates impact on net income (unit : mm yen) 20th 21th 20th Account Forecast Forecast forecas
Slide 14: Key financing events in the 19th fiscal period
Key financing events in the 19th fiscal period Committed line of credit : 13,000 mm yen （as of March 31, 2014） ■Financial performance in the 19th fiscal period ■Breakdown of debt by lenders Financial strategy ■Credit ratings（＊1） 12
Slide 15: Borrowings profile
Borrowings profile Maintaining the stable financial conditions ■Duration –average remaining duration to maturity (years) ■Diversification of debt maturities（As of February 28, 2014） Financial strategy ■Average interest rate paid during fiscal periods ■Proportions of fixed and floating rate 13
Slide 16: List of borrowings
List of borrowings Stable debt financing (As of February 28, 2014) Type Lender Balance（JPY） Drawdown Date Repayment Date Repayment Method Average Interest Rate Description ｰ - - - - - - Short-term debt Subtotal 0 Mizuho Bank, The Nourinchukin Bank, The Hiroshima Bank, The Kitakyushu Bank, The Iyo Ba
Slide 17: Diversification of fundraising
Diversification of fundraising A regional bank network that corresponds to the investment strategy area Financial strategy 15
Slide 18: Active retail
Active retail Sales promotion events at Canal City Hakata were well received. Overview of retail operation 16
Slide 19: Renovation of SunLive City Kokura
Renovation of SunLive City Kokura Completed tenant replacements in the specialty store zone in March 2014 ■SunLive City Kokura Overview of retail operation ■Map 17
Slide 20: Expansion of floor space in Park Place Oita
Expansion of floor space in Park Place Oita Opening the expanded section on April 18th, 2014 ■Overview of Park Place Oita Overview of retail operation 18
Slide 21: Breakdown of active retail rents
■アクティブ商業賃料構成比 Breakdown of active retail rents Increase in variable rents in SunLive City Kokura ■Breakdown of rents by property ■Breakdown of total rents Overview of retail operation 19
Slide 22: Historical and projected office buildings' occupancy rates
Historical and projected office buildings’ occupancy rates Anticipating to recover the occupancy rate of Gofukumachi Business Center in the 21th fiscal period Overview of office buildings operation ＊Note: Calculated as a weighted average. ＊Total leasable floor space is figured as of the end of perio
Slide 23: Fukuoka office market
Fukuoka office market Average vacancy rate in Fukuoka decreases 13 consecutive months ■Average vacancy rates in major Japanese cities Overview of office buildings operation ■New supply in major cities 21
Slide 24: Historical records of asset's growth
Historical records of asset’s growth Assets have doubled since IPO. Investment type is diversified. ■Asset size（based on acquisition price） Asset’s growth 22
Slide 25: The condition of Fukuoka City Center
The condition of Fukuoka City Center Proceeded the preparation of redevelopment in Tenjin area Asset’s growth 23
Slide 26: The condition of suburb area in Fukuoka
The condition of suburb area in Fukuoka Fukuoka city, the compact city, has well-organized infrastructure of transportation Asset’s growth 24
Slide 27: Appendix
ki Appendix
Slide 28: Profile
Profile Profile Investment unit price ■Name Fukuoka REIT Corporation ■Unit price 171,400 yen (as of February 28, 2014) ＊Unit price is as of February 26, 2014 after split ■Asset manager Fukuoka Realty Co.,Ltd Licensed by Fukuoka Local Finance Branch Bureau ■Total number of investment units outstandin
Slide 29: 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 （Including Okinawa and Y
Slide 30: Population movement of Fukuoka city
Population movement of Fukuoka city The population of Fukuoka City continues to increase Appendix 28
Slide 31: Portfolio table
Portfolio table (as of February 28, 2014) Acquisition Total Number of Age Investment Acquisition Source leasable Occupancy tenants at Primary tenants Real estate property name price(mm yen) rate at end of (＊1) ratio timing (＊3) floor period end of period at end of period (＊2) space（㎡） (＊4) Washingto
Slide 32: Portfolio map
Portfolio 0 /, thm “=== Kyushu Shinkansen Line == JR(conventional rail ines) —— Expressway Nagasaki @ Retail Office buildings Others @ Canal City Hakata @ Canal City Hakata-B © Park Place Oita @ SunLiveCity Kokura © Square Mall Kagoshima Usuki @ Kumamoto Intercommunity SC @ AEON Hara Shopping Center
Slide 33: Portfolio: Active retail
Portfolio : Active retail Appendix 31
Slide 34: Portfolio: Active retail
Portfolio : Active retail Appendix 32
Slide 35: Portfolio: Passive retail
Portfolio : Passive retail Appendix 33
Slide 36: Portfolio: Office buildings
Portfolio : Office buildings Appendix 34
Slide 37: Portfolio: Others
Portfolio : Others Appendix 35
Slide 38: Top tenants by leased floor area
Top tenants by leased floor area Appendix 36
Slide 39: Passive retail
Passive retail Keeping a stable NOI Appendix 37
Slide 40: Income and expenditure by properties (Active retail)
Income and expenditure by properties（Active retail） - unit : mm yen （Figures rounded down to nearest mm yen） 19h Total 18th Total Variation Forecast Variation Category Canal City Hakata Canal City Hakata・B Park Place Oita SunLive City Kokura A B A－B C A－C （＊1） 19th fiscal period（ September 1, 2013 〜
Slide 41: Income and expenditure by properties (Passive retail)
Income and expenditure by properties（Passive retail） - unit : mm yen （Figures rounded down to nearest mm yen） Square Mall Kagoshima Kumamoto Inter- AEON Hara Kurume Higashi K’s Denki 1９th Total 18th Total Variation Forecast Variation Category Community SC Shopping Center Hanahata SC Kushiwara SC Kag
Slide 42: 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 Taihaku Tenjin Gofukumachi Higashi Hie Tenjin North Business Sanix Hakata Street Nishi-Dori 1９th Total 1８thTotal Variation Forecast Variation Category Business Business Front Ce
Slide 43: Income and expenditure by properties (Others and Total)
Income and expenditure by properties（Others and Total） - unit : mm yen （Figures rounded down to nearest mm yen） Amex City House Aqualia Hotel 19th 18h 19th 18h Aqualia D-Wing Variation Forecast Variation Variation Forecast Variation Category Akasakamon Keyaki FORZA Total Total Total Total Kego Chiha
Slide 44: Cash flow statements
Cash flow statements (compared with previous fiscal period) - unit : mm yen （Figures rounded down to nearest mm yen） 18th 19th 〜Aug 31, 2013 〜Feb 28, 2014 Variation Category A B B－A Net cash provided by （used in） operating activities 3,609 3,699 90 Net income before income taxes 2,272 2,239 （32） Dep
Slide 45: Maintenance expenses, etc.
Maintenance expenses, etc. Floor expansion works in Park Place Oita: Completed in the 20th fiscal period - unit : mm yen （Figures rounded down to nearest mm yen） ■Maintenance expenses, capital expenditures, depreciation, and taxes and fees Appendix ◎Capital expenditures of the 19th fiscal period ◎Pl
Slide 46: CSR initiatives
CSR initiatives Fukuoka Realty initiatives to support and cooperate in enhancing the appeal of Kyushu and Fukuoka Appendix 44
Slide 47: IR initiatives
IR initiatives ■IR activities / Public relations activities Appendix 45
Slide 48: Asset management company's organization
Asset management company’s organization Appendix 46
Slide 49: Corporate governance
Corporate governance ■Investment guidelines (voluntary rules for related-party transactions) Appendix 47
Slide 50: Unitholders' data
Unitholders’ data Appendix 48
Slide 51: Unit price chart
Unit price chart ~ 69,890Units —— Investment unit price Turnover +2) @Market capitalization(as of February 28, 2014):118.266 bn yen uns) = 250,000 25,000 June 21, 2005 ital pube often pie 200,000 : Mtoe prern — 20,000 ofthe Sd asue March 1, 2011 Price per unit 150,000 ofthe 2nd issue 45,000 Septembe
Slide 52: Analysis of earthquake risk in Fukuoka
Analysis of earthquake risk in Fukuoka All properties owned by Fukuoka REIT are covered by earthquake insurance Property Inspector Report date PML (%)(*1) （A） 8.0 （A） Nov. 30, 2010 （B） 7.6 （B） Canal City Hakata(*2) Takenaka Corporation Jan. 21, 2011 （C） 5.3 （C） （D） 11.1 （D） （A） 8.2 （A） Apr. 15, 2008
Slide 53: Strengths of Fukuoka and Kyushu ①
Strengths of Fukuoka and Kyushu ① Inbound foreign visitors Appendix 51
Slide 54: Strengths of Fukuoka and Kyushu ②
Strengths of Fukuoka and Kyushu ② Vitalization of tourism in Kyushu with Fukuoka as the starting point Appendix 52
Slide 55: Strengths of Fukuoka and Kyushu ③
Strengths of Fukuoka and Kyushu ③ Increase in business demand due to companies expanding into or starting up in Fukuoka Appendix 53
Fukuoka REIT — 19th fiscal period Earnings Presentation on 6ix