Fukuoka REIT Corporation Introduction of Our REIT （8968） http://www.fukuoka-reit.jp 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 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 6/21/2005 (Tokyo Stock Exchange, Fukuoka Stock Exchange) Financial Highlights • Equity Market Cap JPY 94,593 million (as of 2/28/2006) • Total Debt JPY 33,700 million (as of 2/28/2006) • Debt Ratings A- (S&P) Dividend Information • Previous Fiscal Period End 2/28/2006 (semi-annually, every February and August) • Cash Dividend (actual) JPY 18,438 per share • Yield (actual) 4.19% (as of 4/17/2006) • Yield Gap (actual) 2.24% (Comparison with 10-year JGB as of 4/17/2006) Current Pricing • Stock Price JPY 887,000 (as of 4/17/2006) • Outstanding Units 92,050 • 52 Week High JPY 910,000 (6/21/2005) • 52 Week Low JPY 763,000 (9/15/2005) Portfolio Summary • Asset Types Retail 64.6%, Office 35.4% (as of 2/28/2006) • Asset Areas Kyushu, Japan (mainly Fukuoka metropolitan area) • Properties 7 (as of 2/28/2006) Two more properties newly acquired on march 2006 • Total Leasable Area 260,470.9 m2 (as of 2/28/2006) • Occupancy 99.0% (as of 2/28/2006) 3 Summary “Act Local, o Japan’s first region-specific REIT Think Global” oThe 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 New and Large” o Pipeline support by the Fukuoka Jisho Group, Kyushu’s largest integrated developer “Proactive Sponsorship by Kyushu’s o Proactive participation by leaders of Kyushu’s business world Business Leaders” including Kyushu Electric Power 4 Concept ::: A c t L o c a l , T h i n k G l o b a l ::: 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 that differ from REITs investing in the Tokyo metropolitan office market 6 Hometown ::: A L e a d e r in P o p u l a t i o n G r o w t h ::: 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.) －Automotive ■ Strong history of commerce with －Processed food Korea and China of more than products 1,000 years 8 Kyushu, Westernmost Island of the 4 Main Japanese Islands, is the Closest to Asia 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 population: 1.34 million Fukuoka metropolitan area population: 2.37 million Tokyo Metropolitan Area 30.28 million people osaka Metropolitan Area 12.20 million people Fukuoka Metropolitan Area 2.47 million people Nagoya Metropolitan Area 5.46 million people Source：Tabulated by the Japan Economic Research Institute based on the 2000 National Census conducted by the Ministry of Internal Affairs and Communications 9 Fukuoka is the Fourth Largest Metropolitan Area in Japan following Tokyo, Osaka and Nagoya 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 Area Osaka Metropolitan Area 130 Fukuoka Metropolitan Area Nation Wide 120 110 100 90 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 Source: Fukuoka Shintoshin Kaihatsu Co., Ltd. prepared based on the established national census figures of the Ministry of Internal Affairs and Communications (MIC) for 1985-2000, unverified figures for the 2005 national census by MIC, Estimated Future Japanese Population (medium estimates) of the National Institute of Population and Social Security Research compiled in January 2002 and December 2003 figures for the “Estimated Future Population of Japanese Municipalities” issued by the same body. Note) Graph formed after establishing the national and municipal populations in 1985 as 100 10 Fukuoka Metropolitan Area’s Population will Continue to Grow 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 Economic Figures issued by the Cabinet Office’s Economic and Social Research Institute International Comparison of Kyushu Economy with Countries Note: Kyushu’s land area is based on investigations by Japan’s Geographic Survey Institute. Figures of foreign countries are those of 2000. Kyushu’s population is based on the Citizen Registers of 2004. Those of foreign countries are estimates of 2003. Export and import values are for 2002 for both Kyushu and foreign countries, calculated at 1US$ = 122 yen. 11 Kyushu’s GDP is Near Australia’s in Size 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 Companies (Wakamiya City, Fukuoka Prefecture) DENSO Kitakyushu Plant (Kitakyushu City) Nissan Motor, Kyushu Plant Building a new diesel vehicle fuel injection (Kanda-machi,Fukuoka Prefecture) DENSO device plant at an investment of about 20 Toyota Motors Kyushu, Kanda Plant billion yen (Kitakyushu City) (Kanda-machi, Fukuoka Prefecture) ROHM Fukuoka (Yukuhashi City, Fukuoka Prefecture) Expanded the line of its subsidiary to Power Device Division, increase the car part production capacity AISIN SEIKI Mitsubishi Electronic Daihatsu Auto Body by 50% (Jonan Town, Kumamoto (Fukuoka City) (Nakatsu City, Oita Prefecture) Prefecture) Built a new plant for interior materials of Oita Canon doors, etc. and began operating it in Tokyo Electron Kyushu (Kunisaki City, Oita Prefecture) (Tosu City, Saga Prefecture) TOYOTA BOSHOKU summer 2005. The investment was about 4 billion yen (Miyawaka City, Fukuoka Prefecture) Toshiba, Oita Plant (Oita Prefecture) Opened a new plant that produces air bag Nagasaki Technology Center, NEC Kyushu TOYODA GOSEI modules, etc. in September 2005 Sony Semiconductor Kyushu (Kumamoto Prefecture) (Kitakyushu City) (Isahaya City, Nagasaki Prefecture) Asahi Kasei KOITO Building a new plant for lighting equipment Aishin Kyushu Microsystems Kyushu MANUFACTURING to open in October 2006 (plan) (Saga City) (Jonan Town, Honda Motor, (Nobeoka City, Kumamoto Prefecture) Kumamoto Plant Miyazaki Prefecture) FUTABA To open a new press component plant by Fuji Photo Film the end of this year (Nogata City, Fukuoka (Kikyuyo Town, INDUSTRIAL Prefecture) Kumamoto Prefecture) Miyazaki Oki Electric Fujitsu Integrated Expanded plant for producing window (Kiyotake Town, Miyazaki Prefecture) SHIROKI Microtechnology, Kyushu Plant regulators (Kitakyushu City) (Satsuma-Sendai City, Kagoshima Prefecture) KYOCERA Corporation Kagoshima Kokubu Plant TOYOTA IRON Opened new press welded parts, etc. plant (Kirishima City, Kagoshima Prefecture) in September 2005 (Miyawaka City, WORKS Fukuoka Prefecture) Automobile IT Rich in Human Resources and Blessed by Nature, 12 Kyushu Has a Huge Connection of Semiconductor and Automotive Plants 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 25,000,000 20 Osaka Osaka Tokyo Sapporo Fukuoka Sendai Tokyo Hiroshima 10 20,000,000 Fukuoka Sendai Sapporo 0 Hiroshima 15,000,000 -10 10,000,000 Tokyo -20 Nagoya Osaka Osaka Nagoya Sapporo Fukuoka 5,000,000 Sendai -30 Hiroshima Sapporo Fukuoka Sendai 0 -0.4 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 Source : Official Announcement of Land Price by the Ministry of Land, Infrastructure and transport 13 Fukuoka Land Prices Are Following the Path of Tokyo 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 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 Portfolio ::: V i b r a n t , N e w a n d L a r g e ::: Concept Hometown Portfolio Strategy Appendix Portfolio: Portfolio Table (as of 2/28/2006)