Fukuoka REIT Corporation
Q&A Summary for the 39th Fiscal Period (Period Ended February 2024)
Earnings Briefing Session for Institutional Investors/Analysts
Date: April 17, 2024 (Wed.), 15:30 – 16:17 (web conference)－－－－－－－－－－－－－－－－－－－－－－－－－－－－－－－－－－－－－－－－－－－－
Q1
Sales of Canal City Hakata increased. Do you expect sales to continue to expand in thefuture, rather than it being due to the special demand from the opening of Alpen FUKUOKA?
A1
Although there was an impact of the opening, we expect the trend will continue as sales ofAlpen FUKUOKA were also much better than expected. No other store in the area has such alarge floor space that handles sports products in general, so it has a competitive advantage and isalso functioning to accommodate the inbound demand. Therefore, we expect sales of the facility tostay strong. Further upside can be expected if the inbound flow from China returns.
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Do you already have some concrete plans in mind for future asset expansion?

A2
There is no change in our policy of acquiring mainly logistics facilities, residences, andoffices with a superior location and high specifications. Since the stock of development propertiesof the sponsors is also expanding, we believe we can continue to have positive discussions in thefuture. In addition, we leverage our unique sourcing capability to collect information. In particular,for logistics, TSMC in Kumamoto plans to continue to expand, resulting in new properties otherthan those of the sponsors also emerging from Fukuoka to Kumamoto areas, so we believe there
will be opportunities for acquisition. Rather than starting research from now, we think an
important point is how we will acquire specific projects going forward.
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You said Alpen FUKUOKA of Canal City Hakata continues to be performing well. Whatkind of products are selling, including for inbound demand?
A3
We understand there are many wealthy Korean customers, in particular, and expensive golf
equipment is selling better than expected. We hear some customers go to golf courses directly withthe golf clubs they have just bought at Alpen FUKUOKA. The boom in outdoor products has
subsided a little as the COVID-19 pandemic settled down; however, running shoes and apparel,etc. are selling well mainly among inbound customers from Asia due in part to the effect of theweaker yen.
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Q4

What are the characteristics of the tenant occupancy trend in office properties?

A4
As Tenjin Big Bang and Hakata Connected bring a large supply of new offices, taking an
example of Hakata FD Business Center which was newly acquired during the 39th fiscal period,
we feel there is a strong positive demand for new bases, expansion, relocation and others.
Properties in a good location with price competitiveness are performing strongly, and rents forexisting buildings are being raised as a result of the new opening of buildings with a unit priceper tsubo (3.3 square meters) of 30,000 yen. We should not be overly optimistic about the market,
but we think the properties owned by Fukuoka REIT will remain solid because there is room for
an increase in rent.
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How about the effect of renovation of La Festa in Canal City・OPA around last fall?

A5
By changing the business type in such a way to fully capture inbound demand, it recorded
the highest ever sales for the zone as a whole, and an increase in the number of customers has
had a ripple effect on the food and drinks zone and others. Together with Alpen FUKUOKA, weview the renovations as having been successful so far. In particular, it has added stores that
inbound customers would prefer, such as subcultures, to differentiate itself from the competitors.
We believe this is also an advantage.
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Q6
What are your thoughts on the introduction of CPI-linked and tiered rents, etc. for logistics
facilities to deal with inflation?
A6
We believe that there is still a rent gap of 10% or more in current rents, so we are in fairly
strong negotiations about increasing rents at the time of contract renewal. We should be able toachieve a firm increase in rents. On the other hand, we think that going as far as switching toCPI-linked contracts still poses a high hurdle. We will work to raise rents steadily for internal
growth.
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Q7
What do you think of acquiring new properties to compensate for absence in NOI as a resultof the disposition of the buildings in Marinoa City Fukuoka?
A7
The 40th and 41st fiscal periods are forecasted to be impacted by a decrease in NOI as aresult of the disposition of the buildings, but we expect the impact will not be as large if the landlease business is able to collect full rents. Since we divested the buildings only this time, we willconsider how to put the sales proceeds, including cash on hand, at work in the future. If there isa good property, we will consider acquiring it as an alternative. That said, there are no immediateplans to buy something directly from the sponsors in exchange for the transaction.
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Is the impact of the sale of Marinoa City Fukuoka the only reason why the planned timingof reaching DPU of 3,800 yen shifted from previously announced 2026 to 2027? Or, are there anyother effects?
A8
It is solely due to the impact of the sale of Marinoa City Fukuoka. There have been noparticular negative factors from the previous briefing. Rather, positive factors have been
accumulating a little bit more. Due to the large impact of a decrease in NOI during thedevelopment period, we had to postpone the timing of reaching the target dividend in normal
operation of 3,800 yen slightly from what was previously announced. On the other hand, there
still remains the positive factor of internal growth as a driver, so we plan to use it as well toachieve 3,800 yen early.
－－－－－－－－－－－－－－－－－－－－－－－－－－－－－－－－－－－－－－－－－－－－*This material contains statements on future business performance, plans, management targets, and strategies, etc. These forwardlooking statements are based on the latest judgments made by Fukuoka REIT Corporation and Fukuoka Realty Co., Ltd., and the actual
results of Fukuoka REIT Corporation may differ materially from those in the forward-looking statements due to various factors.
Therefore, Fukuoka REIT Corporation and Fukuoka Realty Co., Ltd. do not guarantee their respective future performances described inthis material or explanations based on this material. Although Fukuoka REIT Corporation and Fukuoka Realty Co., Ltd. have preparedthis material based on information that is believed to be reliable, no guarantee is made as to the accuracy, rationality, or completenessof the content. Please note that all the descriptions of this material are effective as of the date when this material was prepared, andmay be subject to change without prior notice. This material is solely for the purpose of providing information to investors, and is notintended for soliciting investment or other activities. When making a final decision on investment, investors are kindly requested to doso based on their own judgment and responsibility, fully recognizing and understanding the investment-related risks including adecrease in investment value.