Fukuoka Reit Corporation · TSE:8968
Fukuoka Reit — 13th fiscal period Earnings Presentation
57 slides from Fukuoka Reit's earnings presentation, April 2011
Slide 1: Overview of the 13th fiscal period performance
is} a oo is) a oo o is) 7oo00 ooo o a Se Fukuoka REIT Corporation Overview of the 13th fiscal period performance [8968] September 1°" 2010~ February 28", 2011
Slide 2: Slide 2
Slide 3: Profile
Profile Profile Investment unit price ■Name Fukuoka REIT Corporation ■Unit price 604,000 yen (as of February 28, 2011) ■Asset manager Fukuoka Realty Co.,Ltd ■Outstanding units 107,050 units (as of February 28, 2011) Licensed by Fukuoka Local Finance Branch Bureau (financial instruments)No.10 64.6 bi
Slide 4: Contents
Financial statements 5 Appendix 31 The issuance of new investment units 12 ＊Regarding rounding of amounts, percentage, and ratios : unless otherwise noted, in these materials, monetary amounts are rounded down to the nearest whole unit, and percentages and ratios are rounded off to two decimal place
Slide 5: 13th fiscal period highlights
13th fiscal period highlights 4
Slide 6: Financial highlights
Financial highlights Operating revenues keep steady from the previous year. (unit : mm yen) 9th fiscal 10th fiscal 11th fiscal 12th fiscal 13th fiscal 14th fiscal 15th fiscal Variation period period Category period period period period A period B 〜 Aug 31, 2011 〜 Feb 29, 2012 〜 Feb 28, 2009 〜 Aug 31
Slide 7: Balance sheets
Balance sheets (compared with previous fiscal period) (unit : mm yen) Category 12th A 13th B Variation Category 12th A 13th B Variation Aug 31, 2010 Feb 28, 2011 B－A Aug 31, 2010 Feb 28, 2011 B－A Current assets 6,711 7,172 460 Current liabilities 11,027 10,998 (28) Cash and deposits 1,777 2,437 659
Slide 8: Income statements (compared with previous fiscal period)
Income statements (compared with previous fiscal period) Increased expenses by the large renovation of Canal City Hakata. (unit : mm yen) Sign indicates impact on net income (unit : mm yen) 12th 13th Variation Category A B B－A 〜 Aug 31, 2010 〜 Feb 28, 2011 Operation revenues 5,663 5,662 (1) Rental r
Slide 9: Income statements (compared with forecast)
Income statements (compared with forecast) The rent revenues are acheived over the forcast by the excess sales of Park Place Oita. (unit : mm yen) Sign indicates impact on net income (unit : mm yen) Budget 13th Variation Category B B－A A 〜 Feb 28,2011 Operating revenues 5,634 5,662 ① 27 Rental reven
Slide 10: Cashflow statements
Cashflow statements (compared with previous fiscal period) (unit : mm yen) Category 12th A 13th B Variation 〜 Aug 31, 2010 〜 Feb 28, 2011 B－A Net cash provided by (used in) operating activities 2,394 2,545 151 Income before income taxes 1,797 1,763 (34) Depreciation and amortization 953 958 5 Intere
Slide 11: Historical occupancy rates
Historical occupancy rates Maintained high occupancy rates in average compared with overall of J-REITs’. ■Historical occupancy rates Financial Statements ＊Calculated by weighted average ＊Overall of J-REITs’ occupancy rates are calculated by weighted average based on historical figures of The Investm
Slide 12: Appraisal value
Appraisal value Ended 13th fiscal period with unrealized gains of 6,989 million yen as appraisal values changed in response to updated engineering reports, etc. (unit : mm yen) Amount Latest appraisal value by the DCF 12th fiscal period-end 13th fiscal period-end Difference factor Acquisition recogn
Slide 13: Overview of the issuance of new investment units
Overview of the issuance of new investment units ■Details of the Issuance new investment units Authorization date February 7, 2011 The issuance new of investment units Pricing date February 16, 2011 Payment date March 1, 2011 Number of investment units issued 16,000 units Issuance price (offering pr
Slide 14: Rationale behind recent equity offering
Rationale behind recent equity offering Authorized on February 7, 2011 The issuance new of investment units 13
Slide 15: Overview of Canal City Hakata
14 The issuance new of investment units Overview of Canal City Hakata
Slide 16: Business forecast (14th fiscal period)
Business forecast (14th fiscal period) Projecting a dividend increase of 135 yen per unit by virtue of revenue growth stemming from acquisition of Canal City Hakata・B ■Forecast in 14th fiscal period (unit : mm yen) Sign indicates impact on net income (unit : mm yen) 14th 14th 12th 13th 14th 12th 13t
Slide 17: Business forecast (15th fiscal period)
Business forecast (15th fiscal period) Projecting increased maintenance and repair expenses in conjunction with anticipated large-scale tenant turnover ■Forecast in 15th fiscal period (unit : mm yen) Sign indicates impact on net income (unit : mm yen) 14th 13th 14th 12th 13th forecast 15th results f
Slide 18: History of dividends
History of dividends Keeping to maintain stable dividends ■Dividend forecast / results (unit : yen) Fiscal period 3rd 4th 5th 6th 7th 8th 9th 10th 11th 12th 13th 14th 15th Results 18,438 18,632 17,341 18,360 18,499 18,373 18,049 17,377 17,397 16,783 16,465 Business Forecasts Forecast (latest fiscal
Slide 19: Assets under management and LTV ratio
Assets under management and LTV (Interest bearing debt) ratio Steady asset growth and stable LTV ■Assets under management (acquisition-price basis) and LTV ratio Business Forecasts 18
Slide 20: Key financing events in 13th fiscal period
Key financing events in 13th fiscal period Newly obtained a AA− (stable) rating ■Key financing events in 13th fiscal period ■Breakdown of debt by lenders Financial Strategy ■Credit ratings (＊2) (＊1) Megabanks are Mizuho Corporate Bank, Sumitomo Mitsui Banking Corporation, and Bank of Tokyo-Mitsubish
Slide 21: Breakdown of borrowings
Breakdown of borrowings Maintaining the stable financial condition ■Duration (average time to maturity) ■Diversification of debt maturities Financial Strategy ■Average interest rate paid during fiscal periods ■Proportions of fixed-rate and floating-rate debt 20
Slide 22: List of borrowings
List of borrowings Stable debt raising (As of February 28, 2011) Type Lender Amount (JPY) Borrowing Date Repayment Maturity Payment Method Annual Interest Description ｰ - - - - - - Short-term dept Subtotal 0 The Bank of Fukuoka 2,000,000,000 2006/ 8/25 2011/ 7/29 2.05174％(＊2) The Nishi-Nippon City B
Slide 23: Active retail
Active retail Tenant sales are holding up well. ■Canal City Hakata Overview of Retail Operation 22
Slide 24: Renovation work in 13th fiscal period
Renovation work (at Canal City Hakata and Park Place Oita) in 13th fiscal period ■Common-area renovations at Canal City Hakata ■Renovation of tenant spaces and common areas at Park Place Oita Overview of Retail Operation 23
Slide 25: Passive retail
Passive retail Achieved stable operating income Overview of Retail Operation 24
Slide 26: Breakdown of rents from retail properties
Breakdown of rents from retail properties Variable rent is 15% out of 2.5 billion yen within active retail properties. ■Breakdown of rents by property ■Breakdown of total rents from retail properties with variable rent Overview of Retail Operation (＊1)Fixed rent is the sum total of property rental r
Slide 27: Top tenants by leased floor area
Top 10 tenants by leased floor area As of the 13th fiscal period Overview of Retail Operation （＊1）Remaining lease term data are current as of February 28, 2011, and rounded down to the nearest whole year. 26
Slide 28: Top tenants after acquiring Canal City Hakata B
Top 10 tenants by leased floor area （after acquiring Canal City Hakata・B） Top tenants after acquiring Canal City Hakata・B as of March 2, 2011. Overview of Retail Operation （＊1）Remaining lease term data are current as of February 28, 2011, and rounded down to the nearest whole year. 27
Slide 29: Historical and projected office occupancy rates
Historical and projected office building occupancy rates Projected to keep stable occupancy rates Overview of Office Operation ＊Note: Calculated as a weighted average. ＊Total leasable floor is figured as of the end of period. ＊Residential floor spaces are removed from Taihaku Street Business Center.
Slide 30: Fukuoka office vacancy rates and rents
Fukuoka office vacancy rates and rents ■Average vacancy rates in major Japanese cities（dating back approx. 20 years) Overview of Office Operation ■Average asking rents in major Japanese cities（dating back approx. 20 years) Source: Fukuoka Realty, based on data published by CB Richard Ellis Research
Slide 31: A-class office vacancy rate in Fukuoka city
The condition of A-class office vacancy rate in Fukuoka city The A-class vacancy rate is 0% due to no office completion. The existing office buildings held steady. ■Vacancy rate analysis : new & existing office buildings Overview of Office Operation Source: Fukuoka Realty, based on data published by
Slide 32: Appendix
[5 Appendix
Slide 33: A real estate investment trust specializing in regional properties
A real estate investment trust specializing in regional properties ■Sponsors ■Investment policy Appendix (＊1) Concluded MOU with Fukuoka Realty Corporation concerning pipeline support. (＊2) Concluded with FRC concerning provision of property information on owned real-estate assets. 32
Slide 34: Portfolio table
Portfolio table (As of February 28, 2011) Total Acquisition leasable Occupancy Number of Property name Age price Investment Acquisition timing Source space at end rate at end of tenants at Primary tenants at end of period (＊1) (mm yen) ratio (＊3) (＊2) of period period end of period （㎡） Washington Ho
Slide 35: Portfolio (1/8)
Portfolio（1/8） (＊1) (＊1) Acquired as of March 2, 2011 Appendix 34
Slide 36: Portfolio (2/8) Canal City Hakata
Portfolio (2/8) Active retail @Canal City Hakata @ Address: 1-chome,Sumiyoshi,Hakata-ku, Fukuoka City ll Total leasable space : 45,990.34 Mi Built: April 15,1996 @ Property manager: Fukuoka Jisho Gion Stn. Nakasu oN Canal City “6. Hakata Hakata ekimae Street The Nishi-Nippon, Sumiyoshi City Bank 4 s
Slide 37: Portfolio (3/8)
Portfolio（3/8） （＊1) （＊1) space is as of November 30, 2010 Appendix 36
Slide 38: Portfolio (4/8) Park Place Oita
Portfolio (4/8) (Park Place Oita ll Address : 2-chome,Koen Dori Nishi, Oita City I Total leasable space: 103,963.52 Built: March 26,2002/April 17,2002 April 28,2004/April 9,2007 March 31,2008 @ Property manager: Park Place Oita -—4200m Oita High Schoo! $ Takio Stn Joho Kagaktt High Schoo! Mt. Takao
Slide 39: Portfolio (5/8) SunLive City Kokura
Portfolio (5/8) @SunLive City Kokura @ Address: 2-chome,Kami Kuzuhara,Kokura-ku, Kitakyushu City I Total leasable space:61,450.22ni Built: April March17,2005 @ Property manager: Fukuoka Jisho Abeyamakoen Stn Shimosone Stn. > = JRNippouline é SunLiveCity é Kokura & on tO Ss crite! Yokoshiro: iy Entra
Slide 40: Portfolio (6/8)
Portfolio (6/8) Passive retail Square Mall Kagoshima Usuki Passive retail @5)Kumamoto Intercommunity SC Passive retail (DAEON Hara Shopping Center Passive retail (@)Hanahata SC 1 Address : 2-chome,Usuki, Kagoshima City Wl Total leasable space: 14,661.72m Built: September 19,2006 @ Property manager:
Slide 41: Portfolio (7/8)
Portfolio (7/8) Passive retail Passive retail (3)Canal City Business center Buildinng (Kurume Higashi Kushiwara SC] | ()K’s Denki Kagoshima @Gofukumachi Business Center @ Address: Higashi kushiwara-cho, Kurume City @ Address : Tokai-cho,Kagoshima City @ Address: 1-chome, Sumiyoshi, Hakata-ku, @ Addr
Slide 42: Portfolio (8/8)
Portfolio (8/8) Other @®Sanix Hakata Building ©®yTaihaku Street Business Center @bHigashi Hie Business Center (®Amex Akasakamon Tower @ Address: 2-chome, Hakataekihigashi, Hakata-ku, Fukuoka City @ Total leasable space :6,293.76m @ Built:March 31, 2001 @ Property manager: Fukuoka Jisho \eaaniiill” w
Slide 43: Income and expenditure by properties (Active retail, Passive retail)
Income and expenditure by properties（Active retail, Passive retail） (unit : mm yen) 13th Total 12th Total Variation Forecast Variation Category Canal City Hakata Park Place Oita SunLive City Kokura A B A－B C A－C 13th fiscal period (September 1, 2010 〜 February 28, 2011) (Length) 181 days 181 days 18
Slide 44: Income and expenditure by properties (Office, Others and Total)
Income and expenditure by properties（Office, Others and Total） (unit : mm yen) Canal City 13th Total Gofukumachi Sanix Hakata Taihaku Street Higashi Hie 12th Total Variation Forecast Variation Category Business Center Building Business Center Building Business Center Business Center A B A－B C A－C 13
Slide 45: Capital expenditures, repair & maintenance expenses, depreciation
Capital expenditures, repair & maintenance expenses, depreciation, and taxes & fees Major renovations of Canal City Hakata and Park Place Oita planned in 13th fiscal periods ■Capital expenditures, repair & maintenance expenses, depreciation, and taxes & fees Appendix (＊1) Capital expenditures relate
Slide 46: Unitholders' data
Unitholders’ data ■Distribution by investor category (breakdown of investment units) ■Major investors (end of the 13th fiscal period) (As of February 28, 2011) Appendix 45
Slide 47: Unit price chart
Unit price chart ■Change in investment unit price Appendix 46
Slide 48: Asset management company's organization
Asset management company’s organization Appendix 47
Slide 49: Fukuoka Realty's CSR initiatives (1)
Fukuoka Realty's CSR initiatives (1) Proactively conducting CSR activities in response to stakeholders' expectations or requests ■The main theme and detail activities for CSR Appendix 48
Slide 50: CSR initiatives (2): contributing to society
Fukuoka Realty's CSR initiatives (2): contributing to society Advancing a project to promote Fukuoka's growth (Fukuoka Urban Growth Strategy Project) ■Project overview The Fukuoka Urban Growth Strategy Project is broadly pursuing four approaches to stimulate international travel and migration based
Slide 51: CSR initiatives (3): global environment
Fukuoka Realty's CSR initiatives (3): global environment Environmentally friendly property management (Canal City Hakata) Canal City Hakata is actively engaged in environmental initiatives. It was awarded a 2007 Kyushu Environmental Industry Bureau Award for energy efficiency and a 2008 Fukuoka Eco-
Slide 52: Fukuoka Realty's IR activities
Fukuoka Realty's IR activities ■Award-winning website ■Media exposure Appendix ■Fukuoka Realty's website redesign 51
Slide 53: Fukuoka's infrastructural growth potential
Fukuoka’s infrastructural growth potential Full opening Kyushu Shinkansen (Bullet train) in March 2011, continuing the potential growth of Fukuoka's infrastructure. Appendix ＊For the to property numbers on map, see page 34 52
Slide 54: Fukuoka's demographics
Fukuoka's demographics Fukuoka's population growth rate is tops among major Japanese cities Fukuoka still has the highest population growth rate among Japan's four largest metropolitan areas. Fukuoka's population is projected to remain in a growth trend until around 2020 even as other cities' popula
Slide 55: Earthquake effects (1)
Earthquake effects (1) ■Major destructive earthquakes that have occurred in Japan's vicinity Appendix 出典：地震ハザードステーション（J-SHIS）を基に株式会社福岡リアルティにて作成。 54
Slide 56: Earthquake effects (2)
Earthquake effects (2) ■Media reports on recent earthquake’s ■Fukuoka's industrial structure impact on Fukuoka economy Appendix 55
Slide 57: Disclaimer
Disclamer HU —NERERA wtatt BRUIT = fal] U— hi A me = ‘7 I facebook. lewitter Fukuoka Realty facebook card fukuokareit8968 FukuokaRealty http://twitter.com/fukuokareit8968 http:/Awww.facebook.com/fukuokarealty Those materials may contain future performance, plans, management targets and strategies. t
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