Overview of the 30Th Fiscal Period Performance

Security code Overview of the 30th fiscal period performance ［8968］March 1st,2019～August 31st,2019 Financial statements 1 Business forecasts 4 Portfolio overview 6 Asset’s growth 14 Financial strategy 16 Appraisal value 18 Situation of Fukuoka and Kyushu 20 Sustainability 23 Appendix 24 ＊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, management targets and strategies. These forward-looking th Overview of the 30 fiscal period performance descriptions are based on present assumptions on future events and trends in the business environment, but such assumptions ［Security code 8968］ March 1st,2019～August 31st,2019 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 30th fiscal period 3,693 3,650 3,687 3,680 Internal Growth ◎Canal City Hakata 3,593 ・While some tenants were affected by the decline in the number of tourists from South Korea from July, new Aqua Panorama content and new stores have successfully attracted more customers. ・We expect a possible reduction in tourist arrivals from South Korea after the 31st FP 3,512 （yen） 3,500 ◎Office buildings ・Achieved record rent increase following rent revision, and steady rent increases are also expected in the 31st fiscal period and beyond. 3,422 Monthly rent increase following rent revision （30th FP） mm yen 3,398 2.0 ・Though downtime occurred during tenant switchovers, rent per unit area increased with tenant replacements 3,700 3,680 （ th ）％（＊1） Rate of increase in rent through tenant replacement 30 FP 32.0 （＊1） ◎Property profitability enhanced through utility expense reductions External Growth ◎Full-year contribution from Tissage Hotel Naha, acquired in December 2018（ 29th FP） ◎Consider continuation of carefully selected investments in line with the investment ratio changes by investment type Financial Management ◎Green finance Drafted green finance framework and procured green loans worth 2.2 bn yen 3,000 th th th th th th st nd 25 26 27 28 29 30 31 32 Average interest Average remaining LTV Feb. 2017 Aug. 2017 Feb. 2018 Aug. 2018 Feb. 2019 Aug. 2019 Feb. 2020 Aug. 2020 rate paid （＊2） duration to maturity Fixed rate （30th Aug. 2019）（forecast）（forecast） 0.72％ 6.0 years 90.2％ 39.7％ Dividend per unit compared with previous fiscal period ＋6yen The actual of 30th FP （Aug. 2019） 3,693yen compared with forecast ＋13 yen （＊1）Forecast at the financial results of 29th fiscal period （＊2） Interest rates are rounded off to the second decimal place. Financial statements 1 Statements of Income （compared with previous fiscal period） Dividend is 3,693 yen, up 6 yen compared to previous fiscal period, despite municipal property taxation on properties acquired in 28th and 29th fiscal periods - unit : mm yen （Figures rounded down to the nearest mm yen） Sign indicates impact on profit（ unit : mm yen） 29th A 30th B Difference ■Operating profit and loss Account 〜Feb. 28, 2019 〜Aug. 31, 2019 B－A ① Full-period contribution of Tissage Hotel Naha ＋48 Total operating revenues 9,242 9,231 ① （11） Canal City Hakata （47）［ -of which, a seasonal factor of variable rents （32）] （） Leasing revenues-real estate 8,604 8,530 74 Canal City Hakata・B （36） -of which, a seasonal factor of variable rents （37）] Other leasing revenues-real estate 637 700 62 ［ Operating profit and loss Park Place Oita ＋10 Total operating expenses 5,936 5,913 （23）［ -of which, increase in income from utilities ＋11] Canal City Business Center Building （7） Expenses related to leasing business 5,274 5,250 ② （23） Office buildings（others）＋26 Asset management fees 532 540 8 ［ -of which, increase in leasing revenues-real estate ＋12] Ordinary profit and loss ［ -of which, increase in income from utilities, etc. ＋14] Asset custody fees 7 7 0 Others （5）（） Administrative service fees 54 55 1 Total : 11 Director’s compensations 9 9 - ② Decrease in expenses from utilities ＋18 Decrease in repair & maintenance expenses ＋98 Other operating expenses 59 50 （8） Increase in taxes and fees （72） th th （）] Operating income 3,306 3,318 12 ［ -of which, acquired properties at the 28 FP and the 29 FP 58 Increase in depreciation and amortization expenses （29） Total non-operating revenues 2 0 （1）［ -of which, acquired a property at the 29th FP （12）] Non-Operating profit and loss ＋ Total non-operating expenses 372 379 ③ 6 Decrease in other expenses 8 Total : ＋23 Interest expenses 275 279 4 （ incl. investment corporation bonds） Financing related expenses 91 93 1 ■Non-Operating profit and loss Others 5 5 - ③ Increase in non-operating expenses （6） Ordinary income 2,935 2,939 3 ［ -of which, increase in debt-related expenses （6）] Profit before income taxes 2,935 2,939 3 Total income taxes 1 0 （0） Profit 2,934 2,939 4 Total dividends 2,934 2,939 4 Dividend Dividend per unit（ yen） 3,687 3,693 6 Financial statements 2 Statements of Income （compared with forecast） The dividend of 3,693 yen is 13 yen higher than forecast - unit : mm yen （Figures rounded down to the nearest mm yen） Sign indicates impact on profit（ unit : mm yen） 30th A 30th B Difference ■Operating profit and loss Account Previous Forecast 〜Aug. 31, 2019 B－A ① Canal City Hakata・B （25） Total operating revenues 9,305 9,231 ① （73） Park Place Oita （12）［ -of which, decrease in income from utilities （11）] Leasing revenues-real estate 8,530 SunLive City Kokura （8） Other leasing revenues-real estate 700 Konoha Mall Hashimoto ＋3 Operating profit and loss ［ -of which, decrease in income from utilities （2）] Total operating expenses 5,993 5,913 ② （80） Canal City Business Center Building （14） Others （17） Expenses related to leasing business 5,250 ［ -of which, decrease in income from utilities （12）] Asset management fees 540 Total :（73） Ordinary profit and loss Asset custody fees 7 ② Decrease in expenses from utilities ＋34 ＋ Administrative service fees 55 Decrease in repair & maintenance expenses 19 Decrease in other expenses ＋27 Director’s compensations 9 Total :＋80 Other operating expenses 50 Operating income 3,311 3,318 7 Total non-operating revenues 0 0 （0） Non-Operating profit and loss Total non-operating expenses 381 379 （2） Interest expenses 279 （ incl. investment corporation bonds） Financing related expenses 93 Others 5 Ordinary income 2,930 2,939 9 Profit before income taxes 2,930 2,939 9 Total income taxes 1 0 （0） Profit 2,929 2,939 9 69 Total dividends 2,929 2,939 10 Dividend Dividend per unit（ yen） 3,680 3,693 13 Financial statements 3 Business forecast （the 31st fiscal period, Feb. 2020） Dividend revised to 3,650 yen in anticipation of possible drop in the number of travelers to Japan from South Korea Forecast in the 31st fiscal period - unit : mm yen （Figures rounded down to the nearest mm yen) Sign indicates impact on profit （unit : mm yen） ■ th 31st 31st 30th 31st Difference between the 30 FP actual 30th st Forecast Forecast Actual Forecast and the 31 FP forecast Account Actual at 29th at 30th difference difference ① Canal City Hakata ＋9 A B C C-A C-B ［ -of which, a seasonal factor of variable rents ＋16] Canal City Hakata・B ＋48 ［ -of which, a seasonal factor of variable rents ＋24] Operating revenues 9,231 9,321 9,270 ① 39 （50） Park Place Oita （8）［ -of which, decrease in income from utilities （10）] Office buildings ＋1 Operating expenses 5,913 5,993 5,989 ② 76 （3）［ -of which, increase in leasing revenues-real estate ＋19] ［ -of which, decrease in income from utilities, etc. （18）] Others （11） Operating income 3,318 3,328 3,281 （36）（46） Total : ＋39 ② Decrease in expenses from utilities ＋39 Increase in repair & maintenance expenses （64） Non-operating revenues 0 0 0 0 - Increase in depreciation and amortization expenses （10） Increase in selling general and administrative expenses （38） Increase in other expenses （3） Non-operating expenses 379 382 375 （4）（7） Total : （76） Ordinary income 2,939 2,946 2,907 （32）（39） Profit 2,939 2,945 2,906 （33）（39） Total dividends 2,939 2,945 2,905 （34）（39） Dividend per unit （yen） 3,693 3,700 3,650 （43）（50） Business forecasts 4 Business forecast （the 32nd fiscal period, Aug. 2020） Operating revenues expected to increase due to office rent increases Forecast in the 32nd fiscal period - unit : mm yen （Figures rounded down to the nearest mm yen) Sign indicates impact on profit （unit : mm yen） st 31st 32nd 31st ■Variance from updated the 31 FP forecast Forecast Forecast Forecast Account ① Canal City Hakata （24） at 30th at 30th difference ［ -of which, a seasonal factor of variable rents （16）] A B B-A Canal City Hakata・B （20）［ -of which, a seasonal factor of variable rents （24）] ＋ Operating revenues 9,270 9,350 ① 80 Park Place Oita 33 ［ -of which, increase in income from utilities ＋19] Office buildings ＋64 ［ -of which, increase in leasing revenues-real estate ＋45] Operating expenses 5,989 6,041 ② 52 ［ -of which, increase in income from utilities, etc.

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