Fukuoka Reit Corporation · TSE:8968
Fukuoka Reit — 21st fiscal period Earnings Presentation
56 slides from Fukuoka Reit's earnings presentation, October 2015
Slide 1: Overview of the 21st fiscal period performance
Fukuoka REIT Corporation Secunty code Overview of the 21st fiscal period performance [8968] September 152014~February 28,2015
Slide 2: Overview of the 21st fiscal period performance
Fukuoka REIT Corporation Overview of the 21st fiscal period performance 8968] September 1°*,2014~February 28¢h,2 Public offerings and new acquisition Financial statements Business forecasts Overview of retail operation Overview of office buildings operation - Financial strategy Current situation of
Slide 3: Public offerings and new acquisitions
Public offerings and new acquisitions 1 Growth and stability in dividends
Slide 4: Highlights of public offerings
Highlights of public offerings Acquired 3 properties in 21st and 22nd fiscal period ■Overview of newly acquired assets Public offerings and new acquisitions ■Growth of asset’s size and LTV 2
Slide 5: New acquisition in the 22nd fiscal period: LOGIPORT Island-City Hakata
New acquisition in the 22nd fiscal period Acquisition of one of the largest logistics properties in the Fukuoka area ■LOGIPORT Island-City Hakata Public offerings and new acquisitions 3
Slide 6: Current situation at Island city
Current situation at Island city The area expected future growth ■Current situation at Island city ■The logistics market in Fukuoka Public offerings and new acquisitions 4
Slide 7: New acquisition: Marinoa City Fukuoka
New acquisition in the 22nd fiscal period Acquisition from a sponsor of a highly competitive retail facility ■Marinoa City Fukuoka(Marina Side Building) Public offerings and new acquisitions 5
Slide 8: New acquisition in the 21st fiscal period: Granfore Yakuin Minami
New acquisition in the 21st fiscal period Acquisition of a residential property in the popular Yakuin-Hirao area ■Granfore Yakuin Minami Public offerings and new acquisitions 6
Slide 9: Financial highlights
Financial highlights Dividend per investment unit was : 3,435 yen - unit : mm yen (Figures rounded down to nearest mm yen) 17th 18th 19th 20th 21st 22nd 23rd Category Variation 〜 Aug. 31, 2015 〜 Feb. 29, 2016 〜 Feb. 28, 2013 〜 Aug. 31, 2013 〜 Feb. 28, 2014 〜 Aug. 31, 2014 〜 Feb. 28, 2015 B-A （foreca
Slide 10: Dividend's track record
Dividend’s track record Keeping a stable dividend ■Dividend results / forecasts 15th 16th 17th 18th 19th 20th 21st 22nd 23rd Category 〜 Feb. 29, 2012 〜 Aug. 31, 2012 〜 Feb. 28, 2013 〜 Aug. 31, 2013 〜 Feb. 28, 2014 〜 Aug. 31, 2014 〜 Feb. 28, 2015 〜Aug. 31, 2015 〜Feb. 29, 2016 (forecast) (forecast) Di
Slide 11: Balance sheets
Balance sheets （compared with the previous fiscal period） Acquisition of properties using cash reserves - unit : mm yen （Figures rounded down to nearest mm yen） 20th 21st 20th 21st Account 〜Aug. 31, 2014 〜Feb. 28, 2015 Variation Account 〜Aug. 31, 2014 〜Feb. 28, 2015 Variation A B B－A A B B－A Total c
Slide 12: Income statements (compared with previous fiscal period)
Income statements (compared with previous fiscal period) Increases in revenues and income attributable to new acquisitions and refinancing in the 20th fiscal period - unit : mm yen （Figures rounded down to nearest mm yen） Sign indicates impact on net income (unit : mm yen) Account 20th 21st Variatio
Slide 13: Income statements (compared with forecast)
Income statements (compared with forecast) Performance exceeding forecast resulting from new acquisitions and strong sales at Canal City Hakata - unit : mm yen （Figures rounded down to nearest mm yen） Sign indicates impact on net income (unit : mm yen) Previous 21st Variation Account Forecast 〜 Feb.
Slide 14: Historical occupancy rates
Historical occupancy rates Maintained high occupancy rates ■Historical occupancy rates (the weighted average during the period) Financial statements ■Occupancy rates(the weighted average during the period) 17th 18th 19th 20th 21st Investment Category 〜 Feb. 28, 2013 〜 Aug. 31, 2013 〜 Feb. 28, 2014 〜
Slide 15: Appraisal value
Appraisal value Unrealized gains（＊1） totaled 14,434 mm yen at the end of 21st fiscal period (increase of 3,337 mm yen compared with previous fiscal period) - unit : mm yen （Figures rounded down to nearest mm yen） Appraisal values Amount Variation Direct capitalization values Acquisition recognized F
Slide 16: Business forecast (the 22nd fiscal period)
Business forecast (the 22nd fiscal period) Dividends are grown although public offering during fiscal period ■Forecast in the 22nd fiscal period - unit : mm yen （Figures rounded down to nearest mm yen） Sign indicates impact on net income (unit : mm yen) 22nd 22nd 21st 22nd 21st Forecast Forecast res
Slide 17: Business forecast (the 23rd fiscal period)
Business forecast (the 23rd fiscal period) Acquired assets in the 22nd fiscal period full-period contribution / Dividend was increased 10 yen ■Forecast in the 23rd fiscal period - unit : mm yen （Figures rounded down to nearest mm yen） Sign indicates impact on net income (unit : mm yen) 22nd 23rd 22n
Slide 18: Active retail
Active retail Sales increase as a result of attracting inbound foreign visitors at Canal City Hakata and floor expansion and renovation at Park Place Oita and SunLive City Kokura Overview of retail operation 16
Slide 19: Current situation at Canal City Hakata (overall)
Current situation at Canal City Hakata (overall) Strong sales as a result of an increase in the number of cruise ship port calls 推 Overview of retail operation 17
Slide 20: Current situation at Park Place Oita
Current situation at Park Place Oita Opening of the Higashi-Kyushu Expressway (between Oita and Miyazaki) in March 2015 Overview of retail operation ■Annually attractive events(＊1) (＊1)These pictures are one example of events. 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 Continuation of the strong percentage rent results at Canal City Hakata achieved in the 20th fiscal period ■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 Recovery in the occupancy rate of Gofukumachi Business Center to 99.5% as of February 28, 2015 Overview of office buildings operation ＊Occupancy rates are calculated as a weighted average during period. ＊Total leasable floor space is figured
Slide 23: Fukuoka office market
Fukuoka office market Continuing decline in the average vacancy rate in Fukuoka City ■Average vacancy rates in major Japanese cities Overview of office buildings operation ■New supply in major cities 21
Slide 24: Key financing events in the 21st fiscal period
Key financing events in the 21st fiscal period Construction of a solid financial base through the fixing of a variable interest rate and the addition of a new bank Financial strategy 22
Slide 25: Financing condition
Financing condition Decrease in average interest rate paid during fiscal periods through refinancing in the 20th fiscal period Financial strategy 23
Slide 26: List of borrowings
List of borrowings Stable debt financing (As of February 28, 2015) Type Lender Balance（JPY） Drawdown Date Repayment Date Repayment Method Average Interest Rate Description ｰ - - - - - - Short-term debt Subtotal 0 Sumitomo Mitsui Banking Corporation 1,200,000,000 Jun.30,2010 Jun.30,2015 1.08091％（＊1)
Slide 27: The condition of Fukuoka City Center
The condition of Fukuoka City Center Preparation for redevelopment in the Tenjin area and the area fronting Hakata Station is progressing. Current situation of Fukuoka City 25
Slide 28: 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 Current situation of Fukuoka City 26
Slide 29: Appendix
i Appendix
Slide 30: Profile
Profile Profile Investment unit price ■Name Fukuoka REIT Corporation ■Unit price 227,000 yen (as of February 28, 2015) ■Asset manager Fukuoka Realty Co.,Ltd Licensed by Fukuoka Local Finance Branch Bureau ■Total number of investment units outstanding 690,000 units (as of February 28, 2015) (financia
Slide 31: 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 32: Population movement of Fukuoka city
Population movement of Fukuoka city The population of Fukuoka City continues to increase Appendix 30
Slide 33: Portfolio table
Portfolio table (as of February 28, 2015) 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 34: Portfolio
Portfolio Fukuoka C N Fukuoka ee17 Kyushu Shinkansen Line JR(conventional rail lines) Expressway Retail i Office buildings Others @ Cana! City Hakata @ Canal City Hakata-B @ Park Place Oita @ SunLiveCity Kokura @ Square Mall Kagoshima Usuki @ Kumamoto Intercommunity SC @ AEON Hara Shopping Center @
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 Keeping a stable NOI Appendix 39
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） 21st Total 20th 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） 21st fiscal period（ September 1, 2014
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） Square Mall Kagoshima Kumamoto Inter- AEON Hara Kurume Higashi K’s Denki 21st Total 20th Total Variation Forecast Variation Category Community SC Shopping Center Hanahata SC Kushiwara SC Kag
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 Taihaku Tenjin Gofukumachi Higashi Hie Tenjin North Business Sanix Hakata Street Nishi-Dori 21st Total 20th Total Variation Forecast Variation Category Business Business Front C
Slide 45: 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 Hotel Aqualia Aqualia D-Wing Tosu Granfore 21st 20th Variation Forecast Variation 21st 20th Variation Forecast Variation Akasaka- House FORZA Category mon Kego Chihaya Tower Logi
Slide 46: Cash flow statements (compared with previous fiscal period)
Cash flow statements (compared with previous fiscal period) - unit : mm yen （Figures rounded down to nearest mm yen） 20th 21st 〜Aug. 31, 2014 〜Feb. 28, 2015 Variation Category A B B－A Net cash provided by （used in） operating activities 3,890 3,735 （155） Net income before income taxes 2,263 2,370 107
Slide 47: 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 （＊1） Capital expenditures related to the expansion works at Park Place Oita. ◎Capital expenditures of the 21st fiscal period ◎Pla
Slide 48: CSR initiatives
CSR initiatives Fukuoka Realty initiatives to support and cooperate in enhancing the appeal of Kyushu and Fukuoka Appendix 46
Slide 49: IR initiatives
IR initiatives ■IR activities / Public relations activities Appendix 47
Slide 50: Asset management company's organization
Asset management company’s organization Appendix 48
Slide 51: Corporate governance
Corporate governance ■Investment guidelines (voluntary rules for related-party transactions) Appendix 49
Slide 52: Unitholders' data
Unitholders’ data Appendix 50
Slide 53: Unit price chart
Unit price chart i ee eeounis — Investment unit price i+ Turnover ‘*2) | j™Market capitalization(as of February 28, 2015):156,630 mm yen (yen) (umes) 300,000 ES 30,000 250,000 25,000 ‘June 21, 2005 inital pubic March 1, 2013 ni roe per unt 200,000 of te 3rd issve ff — 20,000 March 1, 2011 Price pe’
Slide 54: 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 Nov. 30, 2010 （B） 7.6 Canal City Hakata(*2) Takenaka Corporation （C） 5.3 Jan. 21, 2011 （D） 11.1 （A） 8.2 Canal City Hakata・B (*3) Takenaka
Slide 55: Strengths of Fukuoka and Kyushu ①
Strengths of Fukuoka and Kyushu ① Increase in business demand due to companies expanding into or starting up in Fukuoka Appendix 53
Slide 56: Strengths of Fukuoka and Kyushu ②
Strengths of Fukuoka and Kyushu ② Inbound of Fukuoka and Kyushu Appendix 54
Fukuoka REIT — 21st fiscal period Earnings Presentation on 6ix