Overview of the 31St Fiscal Period Performance
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Security code Overview of the 31st fiscal period performance[8968]September 1st,2019~February 29th,2020 Topics of the 31st fiscal period or later 1 New Acquisition properties [scheduled] 3 Financial statements 7 Business forecasts 9 Portfolio overview 11 Financial strategy 18 Appraisal value 21 Situation of Fukuoka and Kyushu 23 Sustainability 27 Appendix 28 *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 one decimal places. These materials may contain future performance, plans, st Overview of the 31 fiscal period performance management targets and strategies. These forward-looking descriptions are based on present assumptions on future events [Security code ]September 1st,2019~February 29th,2020 and trends in the business environment, but such assumptions 8968 may not necessarily be accurate. Actual results may differ mate- rially due to various factors. Neither Fukuoka REIT Corporation nor Fukuoka Realty shall be liable for the accuracy, rationality and completeness of information contained in these materials, whether they were prepared by Fukuoka REIT Corporation or Fukuoka Realty or provided by a third party. These materials have not been prepared to entice investment. When applying to purchase investment units issued by Fukuoka REIT Corporation, do so based on your own judgment and responsibility. Topics of the 31st fiscal period or later Owned properties [The 31st FP] New acquisition properties [The 32nd FP] ◎Retail ◎Two new properties to be acquired in the 32nd fiscal period [total: 4,990 million yen] Canal City Hakata (*1) ■ Fewer tourists from South Korea plus self-restraint on going out and fewer Office building Logistics % Year-on-year comparison of sales 96.5 inbound tourists due to COVID-19 infection since late February impacted sales. Other three active retail properties(* 2) ■ Sales dropped slightly year-on-year, affected by consumption % Year-on-year comparison of sales 97.7 tax hike and weak apparel sales due to warm winter, etc. *Year-on-year changes for March 2019 through February 2020 are described. (*1)Combined sales of Canal City Hakata and Canal City Hakata・B. (*2)The properties refer to Park Place Oita, SunLiveCity Kokura and Konoha Mall Hashimoto. ◎Office buildings The weighted average occupancy % ■Maintained high occupancy rate Property name Higashi Hie Business Center Ⅲ LOGICITY Wakamiya rates during the fiscal period 99.1 Acquisition date scheduled May 29, 2020 Jun. 30, 2020 Rate of increase in rent per unit area ( ) % ■ New move-ins occupying approx. 700 tsubo [approx. 2,314㎡ ] at tenant replacement +17.8 Source Sponsor Outside party Increase in monthly rent Location Hakata Ward, Fukuoka City, Fukuoka Miyawaka City, Fukuoka ■ + mm yen Upward rent revision for 7 straight fiscal periods at rent revision 3.4 Acquisition price 3,290 mm yen 1,700 mm yen ■ Market rent continued to rise mildly. Promoted upward rent revision NOI yield (*6) Rent gap (*3) 4.4% 6.7% (30.4)% to close the gap with portfolio rent. (*6)The indicated figure is based on the NOI described in the appraisal report. (*3)Rent gap indicates the gap between current rent : contract rent with common charges and market rent, and is calculated as "current rent - market rent / current rent". (yen) 4,000 3,593 3,687 3,693 3,642 3,650 3,422 3,512 3,150 st Financial Management [The 31 FP] 3,000 ◎Promoted long-term, fixed-interest rate debt financing and kept LTV at a conservative level. 2,000 ◎Lengthened the period of the committed line of credit agreement from 2 years to 3 years with The Nishi-Nippon City Bank serving as the agent. The credit limit of committed line set at 13,000 mm yen. 1,000 Fixed rate Average remaining LTV (*4) duration to maturity st 0 31 % th th th th 92.4% 6.1 years 39.8 26 27 28 29 30th 31st 32nd 33rd J-REITs' average :4.3 years(*5) J-REITs' average :44.1% (*5) Aug. 2017 Feb. 2018 Aug. 2018 Feb. 2019 Aug. 2019 Feb. 2020 Aug. 2020 Feb. 2021 [forecast] [forecast] (*4)LTV is calculated as Interest-bearing debt amount divided by Total assets. (*5)Indicates the average value of the latest account settlement figures of all investment corporations as of December 2019, Dividend per unit compared with (51) yen [(1.4)%] calculated by Fukuoka Realty based on their disclosure materials. previous fiscal period st The actual of the 31 FP[Feb. 2020] 3,642yen compared with forecast (8) yen [(0.2)%] Topics of the 31st fiscal period or later 1 Actual fixed and variable rents for the 31st FP and projections for the 32nd and the 33rd FP Expected to be affected by the new COVID-19 infections in the rent assumptions for the 32nd and the 33rd fiscal periods Year-on-year comparison of fixed and variable rents for the 31st fiscal period Year-on-year changes in monthly sales of active retail properties (*1) ( ) ◎Breakdown of fixed and variable rents Variable rents % Canal City Hakata/ Other three active retail properties SC Sales Statistic [nationwide] 1,109 30 [12.9%] Canal City Hakata ・ B 29th Fixed rents 7,495 20 Feb. 2019 [87.1%] 10 Variable rents 974 [ 11. 4 % ] 0 31st Fixed rents 7,540 Feb. 2020 [88.6%] (10) 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 (20) (mm yen) (30) Canal City Hakata/ Konoha Mall Hashimoto Park Place Oita SunLive City Kokura Tissage Hotel Naha Mar. Apr. May Jun. Jul. Aug. Sept. Oct. Nov. Dec. Jan. Feb. ◎Breakdown of variable rents ・ Canal City Hakata B 27 21 2019 2019 2019 2019 2019 2019 2019 2019 2019 2019 2020 2020 (*) Source: Prepared by Fukuoka Realty Co., Ltd. based on data from SC Sales Statistics Survey Report by the Japan Council of Shopping Centers. th 29 628 219 212 Feb. 2019 Parking fee 296 (Fukuoka Airport and Port of Hakata[excl. cruise ships]) 18 32 Change in number of overseas visitors (*) 31st (thousand people) Total of Fukuoka Airport and Port of Hakata [excl. cruise ships] 505 208 208 250,000 Feb. 2020 Parking fee 299 0 200 400 600 800 1,000 1,200 200,000 The Kumamoto Earthquake (*)Tissage Hotel Naha was acquired in December, 2018. (mm yen) 150,000 Rents' assumption for the 32nd and the 33rd FP 100,000 Drop in the number of ◎ tourists from South Korea Breakdown of rents by investment type Retail Office Buildings Others 50,000 Impact of COVID-19 31st 5,416 2,261 836 0 Feb. 2020 1 2 3 4 5 6 7 8 9 1011 12 1 2 3 4 5 6 7 8 9 1011 12 1 2 3 4 5 6 7 8 9 1011 12 1 2 3 4 5 6 7 8 9 1011 12 1 2 3 4 5 6 7 8 9 1011 12 1 2 (m) (368) +105 (13) 2015 2016 2017 2018 2019 Source: Prepared by Fukuoka Realty based on data from Statistics on Legal Migrants (Ministry of Justice) . nd 32 5,048 2,366 823 Aug. 2020 43 ● Since February 2020, impact on variable rents linked to sales and earnings of owned properties +226 +73 +65 surfaced due to the government’s request for self-restraint and restrictions on travel from abroad, etc. due to the global spread of COVID-19 infection. rd 33 5,274 2,439 888 Feb. 2021 91 53 ● Rents for the 32nd and 33rd fiscal periods are projected assuming that the impact of New Acquisition[Higashi Hie Business Center �] New Acquisition[LOGICITY Wakamiya] self-restraint on going out and fewer inbound tourists, etc. on sales and earnings of owned 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 properties will continue through around December 2020. (mm yen) * "Rent" is indicated the total amount of leasing revenues-real estate * "Fixed rent" is indicated the amount of "leasing revenues-real estate" - "variable rents". * "Variable rents" are the sum of the portion of rents collected from tenants with variable and GOP rents that varies as a function of the tenants’ sales.Variable rents are included Canal City Hakata, Canal City Hakata・B, Park Place Oita, SunLive City Kokura, Konoha Mall Hashimoto and Tissage Hotel Naha. (*1) Active retails are five owned properties as large retail facilities, Canal City Hakata, Canal City Hakata・B, Park Place Oita, SunLive City Kokura, Konoha Mall Hashimoto, that is affected by fluctuations in sales of leasing revenues-real estate. Topics of the 31st fiscal period or later 2 New acquisition property for the 32nd FP Higashi Hie Business Center III ~a new office building with high specifications near "Higashi Hie" Station〜 ◎Overview of the property Acquisition date May 29, 2020 ● Close to the entrance of the "Higashi Hie" scheduled ( ) Station, which is located between the Acquisition price "Hakata" Stn. and the "Fukuoka Airport" Stn. (planned) 3,290 mm yen of the Fukuoka City Subway Kuko Line, and has an excellent accessibility. Fukuoka Jisho Co., Ltd. Source (Sponsor) ● The Higashi-Hie area where the property is 4-45 Higashi-hie, Hakata Ward, Location located has seen several office building Fukuoka City developments in addition to the property since the completion of Higashi Hie Business Center Built timing March 2020 in February 2009, on top of these, gaining competitiveness as an office area. Tenants 4 (*1) ● A new office building with high specifications NOI yield 4.4% (*2) completed in March 2020 (*1) The number of tenants is indicated as of April 1, 2020.