Fukuoka Reit Corporation · TSE:8968
Fukuoka Reit — 28th fiscal period Earnings Presentation
62 slides from Fukuoka Reit's earnings presentation, November 2018
Slide 1: Overview of the 28th fiscal period performance
Security code Overview of the 28th fiscal period performance 8968 March 1st,2018 August 31st,2018
Slide 2: Contents and disclaimer
Financial statements 1 Business forecasts 9 Overview of retail operation 11 Overview of office buildings operation 16 Financial strategy 19 Asset’s growth 22 Current situation of Fukuoka and Kyushu 23 Sustainability 30 Appendix 31 ＊Regarding rounding of amounts, percentage, and ratios : unless other
Slide 3: Topics of the 28th fiscal period
Topics of the 28th fiscal period Dividend Growth by acquiring new properties ■Acquisition of New properties ■Dividend Growth ◎Assets grew to 193.1 bn yen due to the acquisition of new properties, （yen） The 5th public offering 3,593 3,600 Aiming for continued growth in the future 3,600 in March 2018
Slide 4: Financial highlights
Financial highlights Dividend per unit was 3,593 yen - unit : mm yen （Figures rounded down to the nearest mm yen） 24 th 25 th 26th 27th 28th Difference 29th 30th Category 〜 Aug. 31, 2016 Feb. 28, 2017 〜 Aug. 31, 2017 Feb. 28, 2018 〜 Aug. 31, 2018 B A Feb. 28, 2019 Aug. 31, 2019 A B forecast forecast
Slide 5: Dividend's track record
Dividend’ s track record Keeping a stable dividend The 28th fiscal period end August 31, 2018 Days in fiscal period 184 （semi-annual periods ending every February and August） Dividend （actual） 3,593 yen per unit Dividend yield 4.2％ { Dividend / days in fiscal period × 365 / Unit price} as of August
Slide 6: Statements of Income (compared with previous fiscal period)
Statements of Income （compared with previous fiscal period） Increase in income and profit by new acquisition - unit : mm yen （Figures rounded down to the nearest mm yen） Sign indicates impact on profit unit : mm yen 27 th 28 th Difference ■Operating profit and loss Account Feb. 28, 2018 〜 Aug. 31, 2
Slide 7: Statements of Income (compared with forecast)
Statements of Income （compared with forecast） Dividend was 3,593 yen, 23 yen more than forecast - unit : mm yen （Figures rounded down to the nearest mm yen） Previous Forecast 28th Difference Account 〜 Aug. 31, 2018 A B B A Total operating revenues 9,173 9,178 4 Leasing revenues-real estate 8,478 Oth
Slide 8: 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 （％） 99.8 99.7 99.6 99.6 99.8 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 99.0 99.0 99
Slide 9: Appraisal value
Appraisal value Maintained unrealized gains （＊1） for all properties - unit : mm yen （Figures rounded down to the nearest mm yen） Appraisal value Difference Direct capitalization values Acquisition Acquisition Book value From From Name of Property name price 28th 27th 28th 27th Difference cap rate at
Slide 10: Historical appraisal values (unrealized gains)
Historical appraisal values （unrealized gains） Maintained continuously since the 3rd fiscal period （Unrealized gains totaled 29,467 mm yen, 16.2% ratio of unrealized gains （＊1） at the 28th） ■Historical appraisal values （mm yen） Book value at the end of period（*2） Unrealized gains = (latest appraisal
Slide 11: Business forecast (29th fiscal period)
Business forecast （the 29th fiscal period, Feb. 2019） The forecast dividend is at the 3,600 yen level for the first time since the 9th fiscal period ■Forecast in the 29 th fiscal period - unit : mm yen （Figures rounded down to the nearest mm yen) Sign indicates impact on profit （unit : mm yen） 29th
Slide 12: Business forecast (30th fiscal period)
Business forecast （the 30th fiscal period, Aug. 2019） The dividend will be 3,550 yen despite the onset of municipal property tax on properties acquired in the 28th fiscal period ■Forecast in the 30 th fiscal period - unit : mm yen （Figures rounded down to the nearest mm yen) Sign indicates impact on
Slide 13: Active retail
Active retail Stable rent levels maintained over the long term Canal City Hakata Sales（annual total（ 3）） Park Place Oita Sales（annual total） Canal City Hakata B Sep. 2016 – Aug. 2017 Sep. 2017 – Aug. 2018 Sep. 2016 – Aug. 2017 Sep. 2017 – Aug. 2018 31.8 bn yen 31.5 bn yen 25.2 bn yen 25.1 bn yen Con
Slide 14: Current situation at Canal City Hakata overall
Current situation at Canal City Hakata overall Aiming to be an international SC shopping center that is the most fun in Asia. ■“Canal defense operation! Protect the canal with your smartphone!” ■Sales of Canal City Hakata （16 th FP ［Aug. 2012］〜 28 th FP ［Aug. 2018］） Renovation of the OPA Zone ◎Aqua
Slide 15: Current situation at Park Place Oita
Current situation at Park Place Oita ■Acquisition of Park Place Oita Daiichi Parking ■New tenants’ conditions and Events ◎IKINARI STEAK opens in Park Place Oita; ◎Summer events Park Place Oita Lots owned by FRC Lots owned by FRC Land with leasehold the restaurant’ s first opening in Oita Prefecture!
Slide 16: Current situation at Konoha Mall Hashimoto
Current situation at Konoha Mall Hashimoto Aiming to become a commercial property that is more rooted in the community with additional capex initiatives ■Additional new capex initiatives ■Historical sales・Characteristics of visitors Air play space “TOBANNE” New parking lot control systems ◎Historica
Slide 17: Breakdown of active retail rents
Breakdown of active retail rents Breakdown of rents by property ■Breakdown of variable rents ■鑑定評価額の推移 Fixed rents Variable rent s ◎27th Variable rents： The entire portfolio： mm yen 3,000 2,773 2,838 2,759 mm yen 3,000 834 mm yen 7,725 mm yen 506 590 530 300 298 318 10.8％ （＊） （＊） （＊） 20.2％ Overview
Slide 18: Fukuoka office market
Fukuoka office market Supported by firm demand, the vacancy rate fell to the 2% level ■Fukuoka business district / Vacancy rates and supply and demand of office buildings ■Fukuoka office market / Trend of leasable floor space and occupancy floor space tsubo Completed floor spaceotal floor space left
Slide 19: Historical and projected office buildings' occupancy rates
Historical and projected office buildings’ occupancy rates Keeping to maintain well occupancy rate （％） 100.0 Canal City Business 1 Center Building 90.0 100.0 99.8 100.0 98.2 98.9 99.4 100.0 Total leasable floor space 23,031.09㎡ 80.0 100.0 Gofukumachi 2 Overview of office buildings operation 99.8 99.
Slide 20: Office building rent revisions and tenant replacement situation
Office building rent revisions and tenant replacement situation Upward trend in revenues has continued due to the increase in rent per unit area ■Change in monthly rent due to rent revisions and tenant replacements ＊1 ＊2 ■Floor area subject to rent increase and number of properties subject to rent i
Slide 21: Key financing events in the 28th fiscal period
Key financing events in the 28th fiscal period Achievement of both interest cost reduction and borrowing term extension and diversification ■28 th fiscal period long-term financing and repayments ■Issuance of investment corporation bonds Financing overview Repayment overview ◎Issued 20-year super-lo
Slide 22: Financing condition
Financing condition A stable network of sponsor banks and other lenders ■Breakdown of debt by lenders ■借入金融機関の分布状況 ■A regional bank transaction network ■Fixed and floating rate Investment Sponsor banks corporation bonds ◎Sharing of information networks unique to regional banks to Megabanks ,Trust ba
Slide 23: List of borrowings
List of borrowings (As of August 31, 2018) 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 Current Sumitomo Mitsui Banking C
Slide 24: Historical trends of asset's size by investment type
Historical trends of asset’ s size by investment type Expansion of asset size to 193,144 million yen （28 properties） Retail Office buildings Residence Logistics Hotel ■28th Konoha Mall Hashimoto 10,000 ■17th ■26 th Higashi Hie Business Center Ⅱ 4,230 Tenjin Nishi-Dori Center Building 2,600 LOGICITY
Slide 25: 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 550 線 蔵本 吉塚1丁目 博多小学校 崎 地 中呉服町 A B C D E F 福岡高校 天神北出入口 Yutaka 1chome Kamigofuku Naraya-machi -machi 552 Shiminkaikan-mae Fukuoka Dai-ichi Gofuku machi Gofukumachi Katakasu Katakasu 100m e. 1ch
Slide 26: The condition of suburb area in Fukuoka
The condition of suburb area in Fukuoka A B C D E F Ka Nis izu hite 1km ka ts ine Lin u ichi L 500m way am e Island City Logistics Development Project min onak JR U press 1 hu Ex Current situation of Fukuoka and Kyushu Kyushu Sangyo Vegefru stadium Kyus University (Fresh produce market) Uminonakamic
Slide 27: 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 ①Deregulation of floor space ratios through a district development plan ②Relaxation of restri
Slide 28: Reference: Fukuoka Jisho Group
Reference :Fukuoka Jisho Group ■Major properties owned by Fukuoka Jisho Group Total floor ■Tenjin Business Center Project ■Naha Business Center ■Canal City Hakata East Building Use Name Year of completion space Current situation of Fukuoka and Kyushu Hakata Ekimae Business Center 1999 24,731㎡ Office
Slide 29: Current situation of Fukuoka and Kyushu (1)
Current situation of Fukuoka and Kyushu① ■Change in number of overseas visitors Fukuoka City ■Breakdown of overseas visitors 2017 （thousands） Fukuoka Airport （calls） Others 3,500 328 326 （＊） 350 2.9％[92,000] Port of Hakata Current situation of Fukuoka and Kyushu Number of persons landing on ships on
Slide 30: Current situation of Fukuoka and Kyushu (2)
Current situation of Fukuoka and Kyushu② ■Increasing number of international conventions ■Number of International Conventions in Fukuoka City by Field ◎Ranked 2nd for eight consecutive years （Number of conventions） （Number of conventions） 2014[336] 2015[363] 2016[383] 400 Rank 2009 2010 2011 2012 20
Slide 31: Current situation of Fukuoka and Kyushu (3)
Current situation of Fukuoka and Kyushu③ ■Number of population growth in Fukuoka City ■Top-ranking cities for growth potential Number of population in Fukuoka City Number of population growth in Fukuoka City （thousands） Number of natural population growth in Fukuoka City people Rank City Rank 1 Fuku
Slide 32: Sustainability
Sustainability ■Sustainability Policy ■Initiatives of the 28th fiscal period ◎Receiving the ratings of “Green Star” and “4 Stars 5-star scale ” in the GRESB survey ◎Sustainability Policy The Global Real Estate Benchmark “GRESB” survey is an As the asset management company for Fukuoka REIT Corporatio
Slide 33: Appendix
サステナビリティへの取り組み 31 Appendix
Slide 34: Profile
Profile ■Special features of Fukuoka REIT Corporation Portfolio summary （＊1） ◎Investment type Proven track record over 28 fiscal periods as a region-specific REIT 1 （based on acquisition price） Number of properties / Asset management leveraging our in-depth knowledge of the real estate environment A
Slide 35: 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.
Slide 36: 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 ■Youth and working-age population ratios of nationwide and major cities [2015] ■全国及び各主要都市の若者率及び生産年齢人口比率 （index） 150 （％） 【Fukuoka City】 Act
Slide 37: Analysis of earthquake risk in Fukuoka
Analysis of earthquake risk in Fukuoka All properties owned by Fukuoka REIT are covered by earthquake insurance ■Probabilistic earthquake prediction map ■Overview of earthquake risk analysis Probability of occurrence of an earthquake with a magnitude of nearly 6 or Property Inspector Report date PML
Slide 38: ESG (Environment)
ESG（Environment） Environment Initiatives of owned properties ■Major initiatives by each property ■DBJ Green Building Certification Fukuoka REIT has obtained DBJ Green Building ■Canal City Hakata Certification, a system by Development Bank of Japan Inc. DBJ to certify real estate properties ◎Canal Wa
Slide 39: ESG (Society)
ESG （Society） ■Asset management company’ s work style reform On August 28, 2018, Fukuoka Realty Co., Ltd. was certified as a “Fukuoka ‘Work Style Reform’ Promotion Company.” This is a system to recognize companies that have achieved at least a certain number of the “initiative items” selected by Fuk
Slide 40: ESG (Governance 1)
ESG （Governance①） ■Formulation of a basic policy on customer-oriented business conduct ■Governance structure Fukuoka Realty Co., Ltd. has adopted all seven principles set forth in the Principles for Customer-Oriented Business Conduct, announced by the Financial Services Agency on March 30, 2017, and
Slide 41: ESG (Governance 2)
ESG（Governance②） ◎Fukuoka Realty Co.,Ltd. Organization and preparation of plans for investment and management projects ◎External specialists ■Initiatives on Risk Management and Detailed assessment by the Company's qualified staff and staff with investment experience / Evaluation Reports of third par
Slide 42: IR initiatives
IR initiatives ■IR activities ◎The 8th General meeting of unitholders ◎For institutional investors ◎For overseas investors ◎For individual investors 10 times （＊） May 24, 2018 ■Resolved Matters ・Results briefing Tokyo Participation of domestic global conference Tokyo, Fukuoka Kyushu IR fair Partial a
Slide 43: 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. 3 15052 is
Slide 44: Unitholders' data
Unitholders’ data ■Distribution by investor category [breakdown of investment units] ■Major investors [at the end of the 28th FP] （units） 796,000 （As of August 31, 2018） 800,000 Percentage of total Investment number of investment 747,000 747,000 747,000 747,000 10.61% Rank Name units held [84,462] u
Slide 45: Unit price chart
Unit price chart Investment unit price （ 1） Turnover （ 2） ■Market capitalization as of Aug. 31, 2018 ：135,638 mm yen （yen） （units） 300,000 72,000 28th April 27, 2015 4th PO 250,000 60,000 June 21, 2005 March 1, 2018 Listing 5th PO March 1, 2013 Appendix 200,000 3rd PO 48,000 March 1, 2011 2nd PO 150
Slide 46: Portfolio table
Portfolio table (As of August 31, 2018) Acquisition Price Investment Acquisition Source Total leasable Occupancy Tenants Real estate property name Age floor space Primary tenants （mm yen） ratio timing （＊3） rate （＊4） （＊1） （＊2） （㎡） Canal City Hakata 22yr 4m 32,000 16.6％ Nov.9, 2004 Sponsor 46,604.75 9
Slide 47: Portfolio map
Portfolio 1 Canal City Hakata Fukuoka metropolitan area 4 Fukuoka metropolitan area Wajiro Stn. 2 Canal City Hakata・B ay ressw ine iL ic h 3 Park Place Oita u Exp Fukuoka N ak a m o- K yush i-n Saga 26 志賀島 Oita JR Um Vegefru 4 SunLive City Kokura 25 Stadium 9 （fruit and vegetable market） Konoha Mall
Slide 48: Portfolio: Retail
Portfolio:Retail Active retail Active retail Active retail ① Canal City Hakata ② Canal City Hakata B ③ Park Place Oita Address： 1-chome,Sumiyoshi,Hakata Ward, Fukuoka City Address： 2-chome,Koen Dori Nishi, Oita City, and others Appendix 46
Slide 49: Portfolio: Retail
Portfolio:Retail Active retail Active retail ④ SunLive City Kokura ⑤ Konoha Mall Hashimoto Address： 2-chome,Kamikuzuhara, Kokura Minami Ward, Kitakyushu City Address： 2-chome,Hashimoto, Nishi Ward, Fukuoka City Appendix Victoria Golf youme Mart Kokurahigashi shop G-pala Nitori Fukuoka SUBARU SunLive
Slide 50: Portfolio: Retail
Portfolio:Retail Retail Others Retail Others Retail Others Retail Others ⑥ Square Mall Kagoshima Usuki ⑦ Kumamoto Intercommunity SC ⑧ Hanahata SC ⑨ Kurume Higashi Kushiwara SC Address：2-chome, Usuki, Kagoshima City ■Address 1-chome, Kozono, Higashi Ward, ■Address 4-chome, Hanahata, Minami Ward, ■Add
Slide 51: Portfolio: Office buildings
Portfolio:Office buildings Office buildings Office buildings Office buildings Office buildings ⑫Canal City Business Center Building ⑬Gofukumachi Business Center ⑭Sanix Hakata Building ⑮ Taihaku Street Business Center ■ Address：1-chome, Sumiyoshi, Hakata Ward, ■ Address：Kamigofukumachi, Hakata Ward,
Slide 52: Portfolio: Others
Portfolio:Others Others Residence Others Residence Others Residence Others Residence Others Residence ⑳Amex Akasakamon Tower ㉑ City House Keyaki Dori ㉒Aqualia Chihaya ㉓ D-Wing Tower ㉔Granfore Yakuin Minami ■Address：2-chome, Maizuru, Chuo Ward, ■Address：2-chome, Kego,Chuo Ward, ■Address：4-chome, Chih
Slide 53: Logistics market in Northern part of Kyushu
Logistics market in Northern part of Kyushu Market formation centered on Hakata Port, Fukuoka Interchange, and Tosu Junction ■Major logistics area ■Properties Northern Kyushu LOGICITY Minato Kashii LOGICITY Hisayama Tosu Logistics Center Iizuka [Hakata Port area] [Fukuoka IC area] [Tosu JCT area] Ha
Slide 54: Top tenants by leased floor area
Top tenants by leased floor area Ordinary lease Fixed-term lease Lessee Tenant Share of total 29th 30th 31st Remaining lease term leased space （＊1） 〜Feb. 28, 2019 〜Aug. 31, 2019 〜Feb. 28, 2020 (years) （＊2） ●SunLive City Kokura 6 1 SunLive Co., Ltd. SunLive 11.3％ ●Konoha Mall Hashimoto 12 2 AEON Kyus
Slide 55: 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） 27th 28th Difference 27th 28th Difference Account Feb. 28, 2018 Aug. 31, 2018 Account Feb. 28, 2018 Aug. 31, 2018 A B B－A A B B－A Total current assets 8,200 9,397 1,196 Total curren
Slide 56: 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） 27th 28th Difference Category 〜Feb. 28, 2018 〜Aug. 31, 2018 A B B－A Net cash provided by （used in） operating activities 4,292 4,149 （142） Profit before income taxes 2,624 2,861 236
Slide 57: 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 1,789 1,800 1,602 1,611 1,625 1,470 1,455 1,474 1,500 1,376（＊） 1,200 997 665 741
Slide 58: Income and expenditure by properties (Retail 1)
Income and expenditure by properties （Retail①） - unit : mm yen （Figures rounded down to the nearest mm yen） SunLive City Konoha Mall 28th 27th Difference Forecast Difference Category Canal City Hakata Canal City Hakata・B Park Place Oita Total Total Kokura Hashimoto A B A B C A C （＊） 28 th FP （Mar. 1
Slide 59: Income and expenditure by properties (Retail 2)
Income and expenditure by properties （Retail②） （- unit : mm yen （Figures rounded down to the nearest mm yen） Marinoa City Difference Forecast Difference Square Mall 28th 27th Category Kumamoto Inter- Kurume Higashi K’ s Denki Fukuoka Kagoshima Hanahata SC Total Total Community SC Kushiwara SC Kagosh
Slide 60: 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 Taihaku Tenjin Forecast Difference Gofukumachi Higashi Hie Tenjin North Higashi Hie 28th 27th Difference Business Sanix Hakata Street Nishi-Dori Category Business Business
Slide 61: 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 28th 27th Difference Forecast Difference City House Aqualia D-Wing LOGICITY Category Akasakamon Yakuin FORZA Logistics Minato Total Total Keyaki Dori Chihaya T
Slide 62: Income and expenditure by properties (Total)
Income and expenditure by properties （Total） （- unit : mm yen （Figures rounded down to the nearest mm yen） 28th 27th Difference Forecast Difference Category Total Total B A A B C A C （＊） （Length） 184 days 181 days 3 days ①Total leasing business revenues 9,178 8,194 984 9,173 4 Leasing revenue-real e
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