Fukuoka Reit Corporation · TSE:8968
Fukuoka Reit — Investor Presentation (April 2006)
59 slides from Fukuoka Reit's investor presentation, April 2006
Slide 1: Fukuoka REIT Corporation: Introduction of Our REIT
Fukuoka REIT Corporation Introduction of Our REIT （8968） http://www.fukuoka-reit.jp
Slide 2: Investment Highlights
Investment Highlights Growing Fukuoka area Opportunity to invest backed by strong in a select retail/office inflow of portfolio in the region. younger population. Sophisticated AM/PM team Right timing to with strong invest in Fukuoka. local business support. 2
Slide 3: Profile
Profile Company Profile • Company Fukuoka REIT Corporation • Asset Management Company Fukuoka Realty • Sponsors Fukuoka Jisho, Kyushu Electric Power, Royal Holdings, The Bank of Fukuoka, The Nishi-Nippon City Bank, Nishi-Nippon Railroad, Saibu Gas, Kyudenko, Kyushu Railway Company • Listed date 6/21
Slide 4: Summary
Summary “Act Local, o Japan’s first region-specific REIT Think Global” o The Fukuoka metropolitan area boasts the top population “A Leader in Population growth rate of the four largest metropolitan areas in Japan Growth” o Vibrant, new and large properties represented by “Vibrant, Canal City Hakata
Slide 5: Concept: Act Local, Think Global
Concept : : : A c t L o c a l , T h i n k G l o b a l : : :
Slide 6: Concept: Characteristics of Fukuoka REIT
Concept Hometown Portfolio Strategy Appendix Concept: Characteristics of Fukuoka REIT 1 Act Local, Think Global 2 Differentiated Risks and Standout Returns Fukuoka REIT is primarily focused on retail properties in Fukuoka and Kyushu, giving it differentiated risk and standout return characteristics
Slide 7: Hometown: A Leader in Population Growth
Hometown : : : A L e a d e r i n P o p u l a t i o n G r o w t h : : :
Slide 8: Hometown: Where is Fukuoka/Kyushu
Concept Hometown Portfolio Strategy Appendix Hometown: Where is Fukuoka/Kyushu Tokyo Osaka Kyushu Region Fukuoka Pref. ■ 7 prefectures ■ 1.5h flight from Tokyo, Seoul, ■ “#16” GDP in the world Shanghai ■ 14mm Population ■ Population: 2.47mm ■ Industry (Metropolitan Area), 5mm －Semiconductor (Pref.)
Slide 9: Hometown: Size of the Fukuoka Metropolitan Area
Concept Hometown Portfolio Strategy Appendix Hometown: Size of the Fukuoka Metropolitan Area Populations of Major Japanese Metropolitan Areas Fukuoka Metropolitan Area Fukuoka City and municipalities from which 10% or more of the population commutes to school or work in Fukuoka City Fukuoka City pop
Slide 10: Hometown: Estimated Future Population Changes
Concept Hometown Portfolio Strategy Appendix Hometown: Estimated Future Population Changes Actual Values Projected Future Values 150 Medium estimates of the Actual values from National Institute of national census Population and Social Security Research 140 Tokyo Metropolian Area Nagoya Metropolitan
Slide 11: Hometown: Size of the Kyushu Economy
Concept Hometown Portfolio Strategy Appendix Hometown: Size of the Kyushu Economy Country Comparison of Kyushu’s GDP Source： Global Statistics 2005: National Economic Figures issued by the Statistics Bureau of the Ministry of Internal Affairs and Communications and the 2002 Prefectural Citizens Econ
Slide 12: Hometown: Kyushu's Industries, Automotives / IT
Concept Hometown Portfolio Strategy Appendix Hometown: Kyushu’s Industries ～Automotives / IT Distribution of Primary Automobile and IT Concentration of the Automobile Industry Companies in Kyushu (Trends of Toyota Parts Companies) Toyota Motors Kyushu Recent Trends in Kyushu of Toyota Parts Companie
Slide 13: Hometown: Land Price Trends
Concept Hometown Portfolio Strategy Appendix Hometown: Land Price Trends Highest Land Prices in Commercial Areas: Year-on-year Fluctuation of Highest Land Year-on-Year Variation Prices in Commercial Areas (yen per ㎡） （％） 30,000,000 30 Tokyo Nagoya Nagoya Osaka 25,000,000 20 Osaka Tokyo Sapporo Fukuo
Slide 14: Hometown: Land Price Trends, Fukuoka City 2004-2005
Concept Hometown Portfolio Strategy Appendix Hometown: Land Price Trends Fukuoka City (2004-2005) Year-on-year variation (%) Source: the Ministry of Land, Infrastructure and Transport 14
Slide 15: Hometown: Land Price Trends, Fukuoka City 2005-2006
Concept Hometown Portfolio Strategy Appendix Hometown: Land Price Trends Fukuoka City (2005-2006) Year-on-year variation (%) Source: the Ministry of Land, Infrastructure and Transport 15
Slide 16: Portfolio: Vibrant, New and Large
Portfolio : : : V i b r a n t , N e w a n d L a r g e : : :
Slide 17: Portfolio: Portfolio Table
Concept Hometown Portfolio Strategy Appendix Portfolio: Portfolio Table (as of 2/28/2006) Invest- Acquisi- Acquisi- Floor Appraisal Total ment tion tion Cap Area Lease Occu- Price Value Leasable Property Use Age Rate （％） Tenants （㎡） Area pancy (mm yen) Area (%) (mm yen) (Note2) (Note3) （㎡） （％） （㎡） (
Slide 18: Portfolio: Investment Type Classified Table
Concept Hometown Portfolio Strategy Appendix Portfolio: Investment Type Classified Table Category Definitions and Keys Key is to be located in popular downtown areas Urban Canal City Hakata Street shops, department stores and large specialty shops Suburban shopping center that draws customers fro
Slide 19: Portfolio: Portfolio Summary
Concept Hometown Portfolio Strategy Appendix Portfolio: Portfolio Summary (as of February 2006) Top Ten tenants （Based on the lease area） Variance of the Exp. Date of Rental Period （Based on the lease area） 35% Others SunLive 30% 28.2% 23.6% 25% Canal City OPA 20% 2.2% T・Joy JUSCO 15% 2.2% 22.5% San
Slide 20: Portfolio: Overview of Canal City Hakata
Concept Hometown Portfolio Strategy Appendix Portfolio: Overview of Canal City Hakata Characteristics • Acquisition of about 40%* of total 200,000m2 urban mall in the heart of Fukuoka City *including Canal City Business Center Building • Renowned tourist destination in Fukuoka with over 10 million v
Slide 21: Portfolio: Canal City Hakata, One of the Largest Entertainment Retail Properties
Concept Hometown Portfolio Strategy Appendix Portfolio: Canal City Hakata – One of the Largest Entertainment Retail Properties in Japan The portion owned by Fukuoka REIT Corporation is comprised of Canal City Business Center Building, United Cinema, Canal City Fukuoka Washington Hotel, Club Sega, Ra
Slide 22: Portfolio: New Acquisition, CCH Bridge Senior Equity
Concept Hometown Portfolio Strategy Appendix Portfolio: New Acquisition ～CCH Bridge Senior Equity As of 2/27/2006 • Acquisition Price: JPY3,400 mm • Estimated IRR: 8% Characteristics • An option contract to acquire the “Canal City Hakata SPC Section” of the subject real estate was also signed simult
Slide 23: Portfolio: Overview of Park Place Oita
Concept Hometown Portfolio Strategy Appendix Portfolio: Overview of Park Place Oita (as of March 31, 2006) Characteristics • Part of new town development next to Oita Prefectural Sports Park (World Cup Soccer Stadium) • Near Oita-Mera Interchange with parking for about 4,000 cars • Designed as an op
Slide 24: Portfolio: Overview of Park Place Oita
Concept Hometown Portfolio Strategy Appendix Portfolio: Overview of Park Place Oita (as of March 31, 2006) (million yen) Gross Sales History at Park Place Oita 3,000 Park Place Oita Mall with about 140 specialty 2,500 shops including Jusco and the T Joy cinema complex Oita Big Eye 2,000 (World Cup S
Slide 25: Portfolio: Property Overview
Concept Hometown Portfolio Strategy Appendix Portfolio: Property Overview (as of March 31, 2006) SunLiveCity Kokura Characteristics Lies along National Highway #10 and near the Kokura Higashi Interchange on the Kyushu Expressway with parking for about 2,000 cars Leading regional mall in Kitakyus
Slide 26: Portfolio: Overview of Gofukumachi Business Center
Concept Hometown Portfolio Strategy Appendix Portfolio: Overview of Gofukumachi Buisiness Center Characteristics Excellent location at the corner of Meiji Dori and Taihaku Dori, directly connected to Gofukumachi Subway Station Designed by Michael Graves, designer of the Museum of New York Top
Slide 27: Portfolio: Property Overview
Concept Hometown Portfolio Strategy Appendix Portfolio: Property Overview (as of March 31, 2006) Canal City Business Center Building Characteristics Pioneer of multi-use complexes Synergy between popularity and name recognition of Canal City Hakata Used by TOTO Ltd. as Fukuoka office and showr
Slide 28: Portfolio: Property Overview
Concept Hometown Portfolio Strategy Appendix Portfolio: Property Overview (as of March 31, 2006) Taihaku Street Business Center Characteristics • Superbly located with excellent accessibility / ten-minute walk from Hakata Station and a two-minute walk from Subway Station • Leading exemplary function
Slide 29: History of Occupancy Rate by Property
Concept Hometown Portfolio Strategy Appendix History of Occupancy Rate by Property (as of February 2006) (%) Canal City Hakata (%) Park Place Oita (%) SunLiveCity Kokura 100 100 100 80 98.7％ 80 99.8％ 80 100.0％ 60 60 60 40 40 40 20 20 20 0 0 0 2005.9 2005.1 2005.11 2005.12 2006.1 2006.2 2005.9 2005.1
Slide 30: Strategy: Proactive Sponsorship by Kyushu's Business Leaders
Strategy ::: Proactive Sponsorship by Kyushu’s Business Leaders :::
Slide 31: Strategy: Investment Strategy
Concept Hometown Portfolio Strategy Appendix Strategy: Investment Strategy 31 Focusing on Fukuoka Metropolitan Area & Retail Properties
Slide 32: Strategy: External Growth Roadmap
Concept Hometown Portfolio Strategy Appendix Strategy: External Growth Roadmap 32 Plan to Double our Asset Size by the End of 2008
Slide 33: Strategy: Proactive Support by Sponsors
Concept Hometown Portfolio Strategy Appendix Strategy: Proactive Support by Sponsors (as of April 21, 2006) Developments of the Fukuoka Jisho Group Riverwalk Kitakyushu Marinoa City Fukuoka DEODEO Fukuoka Higashi Store Tenjin Kirameki-dori Building Hakata Ekimae Nishijin Condominiums (New Iwataya Bu
Slide 34: Acquisition Strategies
Concept Hometown Portfolio Strategy Appendix Acquisition Strategies Price: JPY “Reasonable Price” 6,600 mm Price: JPY 1,100 mm Acquisition “High Quality” CAP: Acquisition CAP: 6.6% 5.4% SunLiveCity Kokura （as of 7/1/2005） City House Tenjin Keyaki Street （as of 3/31/2006） Price: JPY Price: JPY 4,400
Slide 35: Strategy: Acquisition of Properties Newly Developed by Sponsors
Concept Hometown Portfolio Strategy Appendix Strategy: Acquisition of Properties Newly Developed by Sponsors 35 Acquire and Develop Mid-Size Community Malls throughout Kyushu
Slide 36: Strategy: Revenue Growth by Value Added Renovation
Concept Hometown Portfolio Strategy Appendix Strategy: Revenue Growth by Value Added Renovation Park Place Oita Rooftop parking space turned into Kid’s park and 14 retail rental spaces (Construction Overview) Construction period: October 2004 - April 2005 (Opened on April 23, 2005) Content: Leas
Slide 37: Strategy: Revenue Growth by Value Added Renovation
Concept Hometown Portfolio Strategy Appendix Strategy: Revenue Growth by Value Added Renovation Park Place Oita has increased revenue through creative renovation 37
Slide 38: Borrowings (the 3rd Fiscal Period)
Concept Hometown Portfolio Strategy Appendix Borrowings (the 3rd Fiscal period) (as of February 28, 2006) Value Payment Interest Rate Borrowing Payment No. Lender Fixed / Collateral (million yen) date deadline method Variable Bullet 1 Development Bank of Japan 12,000 2004.11.9 2009.8.31 1.39% Fixed
Slide 39: Financial Strategy
Concept Hometown Portfolio Strategy Appendix Financial Strategy Term Ratio Variable Ratio Payment Deadline (100 mm yen) 117 120 140 120 -Long -Short Fixed 100 66 term term 36% Variable 80 34 55% 45% 60 64% 40 20 0 2006 2007 2008 2009 Repayment Period Fukuoka REIT Corporation Long-Term Issuer Rating
Slide 40: Summary
Summary “Act Local, o Japan’s first region-specific REIT Think Global” o The Fukuoka metropolitan area boasts the top population “A Leader in Population growth rate of the four largest metropolitan areas in Japan Growth” o Vibrant, new and large properties represented by “Vibrant, Canal City Hakata
Slide 41: Appendix 1 (Financial Data)
Appendix 1 (Financial Data)
Slide 42: Financial Account Settlement Highlights for the 3rd Fiscal Period
Concept Hometown Portfolio Strategy Appendix Financial Account Settlement Highlights (as of February 28, 2006) for the 3rd Fiscal Period 3rd period results 2nd period results (181 days) (actual management period: 296 days) Distribution per unit September 1, 2005 – September 1, 2004 – Settlement (abo
Slide 43: Profit and Loss Statement for the 3rd Fiscal Period
Concept Hometown Portfolio Strategy Appendix Profit and Loss Statement for the 3rd Fiscal Period (million yen) 3rd period results 2nd period results (181 days) (actual management period: 296 days) September 1, 2004 – August 31, 2005 Operating Profit September 1, 2005 – February 28, 2006 Percentage P
Slide 44: Balance Sheet for the 3rd Fiscal Period
Concept Hometown Portfolio Strategy Appendix Balance Sheet for the 3rd Fiscal Period (as of February 28, 2006) (million yen) (million yen) 3rd period 2nd period 3rd period 2nd period (as of February 28, (as of August 31, Variation (as of August 31, Variation (as of February 28, 2006) 2006) 2005) 200
Slide 45: Cash Flow Statement for the 3rd Fiscal Period
Concept Hometown Portfolio Strategy Appendix Cash Flow Statement for the 3rd Fiscal Period (million yen) (million yen) 3rd period (181 days) 2nd period (actual management period: 296 days) September 1, 2005 – February 28, 2006 September 1, 2004 – August 31, 2005 I. Cash flows from operating activiti
Slide 46: Distribution in the 3rd Fiscal Period
Concept Hometown Portfolio Strategy Appendix Distribution in the 3rd Fiscal Period The length of the second fiscal period is listed as September 1, 2004 to August 31, 2005, but assets began being acquired on November 9, 2004, thus the actual management period is 296 days Forecast for the 4th fiscal
Slide 47: Appendix: Leasing Business Income and Expenditures by property
Concept Hometown Portfolio Strategy Appendix Appendix: Leasing Business Income and Expenditures by property (3rd fiscal Period) (as of February 28, 2006) （mm yen） Sanix Kominedai Canal City Hakata Community SunLiveCity Gofukumachi Canal City Hakata Park Place Oita Business Center Building Mall Kokur
Slide 48: Appendix: Performance on Pricing
Concept Hometown Portfolio Strategy Appendix Appendix: Performance on Pricing (as of April 17, 2006) History of Investment Unit Price History of Relative Stock Prices （円） （through April 17, 2006） (June 21, 2005 =100) 900,000 15,000 110% 12,000 800,000 100% 9,000 Trade Volume Investment Unit Price 6,
Slide 49: Analysis of Investor Attributes
Concept Hometown Portfolio Strategy Appendix Analysis of Investor Attributes (as of February 28, 2006) Distribution by Investor Category Largest Investors (Breakdown of Investment Units) Financial institutions Securities companies 1.58% Investment Other corporations Rank Investors Units Held Share E
Slide 50: Appendix: Management Staff Leading the Act Local, Think Global Strategy
Concept Hometown Portfolio Strategy Appendix Appendix:Management Staff Leading the Act Local, Think Global Strategy Post Job Name Resume Entered Mitsui Fudosan and earned his MBA in Real Estate Finance at Pennsylvania University’s Wharton School; Transferred to President/ Masatoshi Lehman Brothers w
Slide 51: Appendix 2 (Others)
Appendix 2 (Others)
Slide 52: Appendix: Gateway to Asia
Concept Hometown Portfolio Strategy Appendix Appendix: Gateway to Asia Flight Time from Fukuoka Airport Distance from Fukuoka to Major Cities to Major Cities 〜1 hr Busan 1〜2 hrs Osaka Tokyo Seoul Shanghai Dalian Qingdao 2〜3 hrs Sapporo Shenyang Taipei Beijing 3〜4 hrs Guangzhou Hong Kong Manila 4 hrs
Slide 53: Appendix: Kyushu's Industries, Automotives/Semiconductors
Concept Hometown Portfolio Strategy Appendix Appendix: Kyushu’s Industries～Automotives/Semiconductors “Car Island” (10 thousand vehicles) Number of Passenger Cars Produced in Kyushu (%) 100 10 finished 80 8 60 6 40 4 20 2 0 0 1999 2000 2001 2002 2003 Passenger Cars Produced Share in Japan Source: Ou
Slide 54: Appendix: Office Vacancy Rate
Concept Hometown Portfolio Strategy Appendix Appendix: Office Vacancy Rate Vacancy Rate （%） Vacancy Rate (Overall Average) （%） (New Buildings Less than One Year in Age 14 50 Fukuoka Fukuoka Tokyo Tokyo 12 Nagoya Nagoya Osaka 40 Osaka Sapporo Sapporo Sendai Sendai 10 Sendai Fukuoka Sapporo 30 8 Osaka
Slide 55: Appendix: Average Office Rent
Concept Hometown Portfolio Strategy Appendix Appendix: Average Office Rent Average Rent Average Rent （yen/month/tsubo） （yen/month・tsubo） New Buildings Less than One year in Age 25,000 30,000 Tokyo 25,000 20,000 Tokyo 20,000 15,000 Osaka 15,000 Osaka Nagoya 10,000 Fukuoka Fukuoka Sendai Nagoya Sappor
Slide 56: Appendix: Description of Earthquake Insurance
Concept Hometown Portfolio Strategy Appendix Appendix: Description of Earthquake Insurance Content Classifications of Earthquake Insurance Total Building Portfolio Insurance Indemnifi- Property Property Repurchase PML Value cation No. Price Amount Canal City A-1 Hakata Canal City B-1 Business Center
Slide 57: Appendix: J-REIT Structure
Concept Hometown Portfolio Strategy Appendix Appendix: J-REIT Structure Properties Financial Loan institutions Investment Investment corporation Issuer of J-REIT investment securities and owner of Rental assets income Investment Fukuoka REIT Corporation Investment securities Advantage of reduced cor
Slide 58: Disclaimer
Disclaimer The contents of this document, including summary notes, quotes, data and other information, are provided solely for informational purposes and not intended for the purpose of soliciting investment in, or as a recommendation to purchase or sell, any specific products. Please be aware that
Slide 59: Act Local, Think Global
Act Local, Think Global Thank you for this opportunity to present our REIT 59