39th Fiscal Period
Report on Performance andManagement Status (Semiannual Report)

Security Code 8968

September 1, 2023 to February 29, 2024

Fukuoka REIT
Corporation

8968

I. Overview of Fukuoka REIT Corporation

I. Overview of Fukuoka REIT Corporation
To Our Unitholders

Status of the Investment Corporation

We would like to express our sincere appreciation to all
unitholders for your continued support of Fukuoka REIT Corporation (FRC).
We are pleased to report on the performance results andmanagement status of FRC for the 39th fiscal period (September 1, 2023 to February 29, 2024).
During the fiscal period under review (the 39th fiscal period), despite a recent standstill, the Japanese economy
showed a mild pickup trend. Looking to the future, the economy is expected to keep recovering due in part to the effectsof various political measures amid improvements in the employment and income environment. On the other hand, with
monetary tightening and other measures continuing globally, a
downturn in overseas economies poses a risk of placing
downward pressure on the domestic economy.
Under such circumstances, FRC’s portfolio achieved solid
performance overall across all asset types in the fiscal period.
Among them, Canal City Hakata, a city-center retail property,
in particular, brought results of the replacement of existing
shops by new ones due to the renewal of the South building,in addition to the still-recovering inbound tourism in Asia (except for China).
FRC posted operating revenues of 9,326 million yen, operating income of 3,462 million yen, ordinary income of 3,031
million yen, and profit of 3,030 million yen for the fiscal period
under review. The dividend per unit came to 3,807 yen, a record high, which represents an increase of 52 yen over thedividend forecast of 3,755 yen disclosed at the time of theannouncement of the financial results for the 38th fiscal period.
With regard to external growth, as a result of an endeavor
to achieve an asset size of 250 billion yen while diversifying
risks in terms of the portfolio structure, FRC acquired an officebuilding, Hakata FD Business Center (acquisition price: 14.1
billion yen), on September 1, 2023. With these acquisitions,the ratio of retail properties in the entire portfolio has decreased to less than 50%.
As for internal growth, and among retail properties record-

FRC is Japan's first REIT specializing in regional properties. FRC manages a portfolio centering on retail facilities featuring excellent design and entertainment qualities and superior office buildings throughout all of Kyushu. With a central focus on Fukuoka,
and in Yamaguchi Prefecture and Okinawa Prefecture, we are utilizing our strength of knowing the local characteristics of realestate, which is a very regional-specific business.

Overview of the Investment Corporation
Zenji Koike
Executive Director
Fukuoka REIT Corporation
President and CEO
Fukuoka Realty Co., Ltd.

ed higher sales. Meanwhile, upward rent revisions have beenachieved upon tenant replacement and contract renewal,
mainly for residential properties. In terms of “initiatives on sustainability,” one of the key measures of FRC, we have endeavored to “maintain and enhance building performance and environmental performance,” which covers the E (environment)
area. This has resulted in the ratio of properties certified as
green buildings to the entire portfolio standing at 84.6%,
against the 2030 goal of 85% or more. As an external evaluation, we have obtained “4 Stars” for three consecutive years
and “Green Star” in the GRESB Real Estate Assessment forsix consecutive years. We will continue our proactive endeavors to reduce CO2 emissions, coordinate with local communities, and provide sustainability information to our unitholders
through the issuance of integrated reports and other measures.
As a REIT specializing in regional properties, FRC continuously strives to maintain and enhance dividend per unit in astable manner by conducting steady asset management andquickly responding to market changes while receiving support
and cooperation from powerful sponsors leading the Kyushu
business world. We are resolved to make the utmost efforts tosecure stable earnings over the medium to long term andcontinuously offer stable dividends into the future based on
our management philosophy of “Act Local, Think Global.”
We greatly appreciate your continued support and cooperation.

Name: Fukuoka REIT Corporation
Representative: Zenji Koike, Executive Director
Asset manager: Fukuoka Realty Co., Ltd. (Fukuoka Local Finance Branch Bureau (financial instruments) No. 10)
Listed date: June 21, 2005 (Tokyo Stock Exchange Inc., and Fukuoka Stock Exchange)

Sponsors

5%

5%

5%

THE BANK OFFUKUOKA, LTD.

THE NISHI-NIPPON CITY BANK, LTD.

Development Bank of Japan Inc.

55%

Director

Fukuoka Realty Co., Ltd.

FUKUOKA JISHO
CO., LTD. (Note)

Overview of Fukuoka REIT Corporation
To Our Unitholders ........................................................................................................ 1
Profile .............................................................................................................................................. 2
Trend of Growth in Asset Size of FRC / Financial Summary ......................................................... 3
Portfolio Overview .......................................................................................................................... 5
Initiatives on Sustainability ............................................................................................................. 7
II. Semiannual Report ............................................................................................................... 9III. Independent Auditor's Report ...................................................................................... 26

IV. Balance Sheet ....................................................................................................................... 29
V. Statement of Income ......................................................................................................... 31
VI. Statement of Changes in Net Assets ........................................................................ 32
VII. Statement of Cash Distributions ................................................................................. 33
VIII. Cash Flow Statement ........................................................................................................ 34
IX. Notes to Financial Statements ..................................................................................... 35
X. Supplementary Schedules ............................................................................................. 47

FUKUOKA REIT CORPORATION

1

10%Outsidedirector

Kyushu Electric Power Co., Inc.

(Asset Manager)

5%

5%

5%

5%

SAIBU GAS HOLDINGS CO., LTD.

Kyudenko Corporation

Nishi-Nippon Railroad Co., Ltd.

Kyushu Railway Company(Note) Concluded MOU with Fukuoka REIT Corporation and Fukuoka Realty Co., Ltd. concerning pipeline support.

Overview of the Asset Manager
Name: Fukuoka Realty Co., Ltd.
Representative: Zenji Koike, President and CEO
Address: 1-2-25, Sumiyoshi, Hakata Ward, Fukuoka City

Telephone: +81-92-272-3900
Established: December 26, 2003
Capital: 200,000,000 yen

Portfolio
Investment type (based on acquisition price)

CONTENTSI.

ProfileRetail48.4%

Investment area (based on acquisition price)

Office buildings Others

37.8%

Total leasable floor space

13.8%

590,409.24 m2

Fukuoka metropolitan area

79.1%

Occupancy rate at end of period

*Figures are based on properties owned as of February 29, 2024.

FUKUOKA REIT CORPORATION

2

Other
Kyushu areas

20.9%

98.8%

I. Overview of Fukuoka REIT Corporation

I. Overview of Fukuoka REIT Corporation

Trend of Growth in Asset Size of FRC
FRC More than Doubled Asset Size and Diversified Investment Types Since
The asset size stood at 220.9 billion yen (on an acquisition price basis) in the 39th fiscal period. FRC aims to achieve 250 billion yen,
Retail (left axis)(mm yen)

Office buildings (left axis)

Logistics (left axis)

Residence (left axis)

Hotels (left axis)

Listing
while working to dissipate risks through the portfolio as a diversified REIT.

(properties)

Number of investment properties (right axis)

2.0%

225,000

Acquired from Sponsor

16200,000

150,000

35

Sponsor

64.4%

properties* Higashi Hie Business Center, which FRC acquired in the10th fiscal period ended August 2009, was acquired bothfrom an outside seller and a sponsor. Accordingly, the acquisition price of the property has been evenly divided andadded to the acquisition price from outside sources and theacquisition from the sponsor, respectively. As for the numberof properties, it has been added as a single property to thenumber of acquisitions from the sponsor.

142,290

Other thansponsorAs ofmillion yen
February 29, 2024

35.6%

220,91478,62431

million yen

million yen

23

19
100,000

11

15

32

33

33

4.5%
7.3%
35

7.8%
30

27

14

31

32

2.1%
4.8%
35

16

15

16

16

17

16

23

24

27

28

27

25

25

26

29

29

29

26

33.5% 37.8%

20

20

17

11
51.9% 48.4%

50,000

7

40

10

8

5

0

5th

10th

15th

20th

25th

30th

35th

39th

(Feb. 2007)(Aug. 2009)(Feb. 2012)(Aug. 2014)(Feb. 2017)(Aug. 2019)(Feb. 2022)(Feb. 2024)(Note) As the senior equity interest in an anonymous partnership managed by CCH Bridge Y.K. was redeemed in the 14th fiscal period, it is excluded from the total acquired assets from the 14th fiscal period onward.
Since interest in the anonymous partnership managed by Limited Liability Company FRC1 was redeemed in the 26th fiscal period, it is excluded from the total acquired assets from the 26th fiscal period onward.

Financial Summary
 inancial Highlights for 39th Fiscal Period and Business Forecasts forF
40th and 41st Fiscal Periods
Category

39th fiscal period

40th fiscal period

41st fiscal period(September 1, 2023 to February 29, 2024)(March 1, 2024 to August 31, 2024)(September 1, 2024 to February 28, 2025)

ActualForecast

Forecast

Operating revenues

mm yen

9,326

9,305

9,242

Operating expenses

mm yen

5,864

5,999

5,941

Operating income

mm yen

3,462

3,305

3,301

Ordinary income

mm yen

3,031

2,866

2,866

Profitmm yen

3,030

2,865

2,865

Dividend per unityen (1)

3,807

–

–

yen (2)

3,755

3,600

3,600

yen (1)-(2)

52

–

–

796,000

796,000

796,000

Latest dividend forecast per unit
Difference from forecast
Total number of investment units outstanding(at end of period)

units

0

FUKUOKA REIT CORPORATION

3

Dividend Performance
39th fiscal period end

February 29, 2024 (semiannual periods ending every February and August) 39th fiscal period days 182 days

39th fiscal period dividend 3,807 yen per unit

Dividend yield

4.6% {(Dividend / Days × 365) / Unit price (as of February 29, 2024)}

(yen)

3,807

4,000

3,600 3,600

3,000

2,000

1,000

0

5th

Feb.
[2007
]

10th

Aug.
[2009
]

15th

Feb.
[2012
]

20th

Aug.
[2014
]

25th

Feb.
[2017
]

30th

Aug.
[2019
]

*FRC implemented a 5-for-1 split of its investment units with March 1, 2014 as the effective date. Dividend per unit indicates the value after the 5-for-1 split.

FUKUOKA REIT CORPORATION

4

35th

Feb.
[2022
]

39th 40th 41stFeb. Aug. Feb.
[2024][2024][2025](Forecast)(Forecast)I. Overview of Fukuoka REIT Corporation

I. Overview of Fukuoka REIT Corporation
Purchase of earthquake
insurance

Portfolio Overview
1

Retail2

Canal City Hakata

6

RetailRetail3

Canal City Hakata·B

7

Retail4

RetailPark Place Oita

8

FRC has purchased earthquake insurance
for all the properties (buildings) it owns.

RetailSunLive City Kokura

9

RetailRetail5

RetailOthers31 (residence)

Konoha Mall Hashimoto

10 Retail

Others33 (residence)

Others32 (residence)

D-Wing Tower

34 Others(hotel)Axion Befu-Ekimae
Premium

Granfore Yakuin Minami

35 Others(hotel)Hotel FORZA Oita

Tissage Hotel Naha

OthersA (logistics)

Total Acquisition
Price

220.9
12 Office Building

Hanahata SC

13 Office Building

K’s Denki Kagoshima

14 Office Building

Marinoa City Fukuoka(Marina Side Building)

15 Office Building

18 Office Building

19 Office Building

Higashi Hie BusinessCenterSaga

20 Office Building

24

Nagasaki

22

,
ay e
sw L in
resCit ypx daE no k sl aku 6 IF u u teRo

Fukuoka
Oita

34
3

7

KumamotoeLin

17 Office Building

Sanix Hakata Building

Taihaku Street BusinessCenter

26

25
A Island City

27 4

ii
sh
Ka
JR

16 Office Building

Gofukumachi BusinessCenterssway
Kyushu Expre

Fukuoka
Metropolitan Area

Canal City BusinessCenter Building(Note) Scheduled to be acquired on March 31, 2029.

30
MiyazakiFukuoka
Metropolitan
Area

Sh
in
ka
ns
en

11 Office Building

Kumamoto
Intercommunity SC

Sa
ny
o

Square Mall
Kagoshima Usuki

billion yen(as of February 29, 2024)

Island City Minato Bay relatedsite (Land with leaseholdinterest) (tentative) (Note)3

Fukuoka IC

Kagoshima

Tenjin Nishi-Dori Center
Building

21 Office Building

Tenjin North Front
Building

22 Office Building

Higashi Hie BusinessCenter II

23 Office Building

Higashi Hie BusinessCenter III

3

6
9

Tenjin Nishi-Dori BusinessCenter (Land with leasehold interest)

Hakata Bay

KyushuArea

Okinawa

35
Others24 (logistics)

Fukuoka Expressway,
Route 1 (Loop Line)FUKUOKA
PayPay DOMEOthers28 (residence)

Others29 (residence)

202

LOGICITY
Minato Kashii

Tenjin29

32

33
SubwayNanakumaLine

202

Others30 (residence)NishOmitetut su
a Te
Lin nj
e in

263

5

Fukuoka Airport

LOGICITY Hisayama

LOGICITY Wakamiya

Amex Akasakamon
Tower

FUKUOKA REIT CORPORATIONCity House Keyaki Dori

5

Aqualia Chihaya

01km

Fukuoka
E

xpr
ess
wa

y R oute

op Line)5 (LoFukuoka metropolitan area
Other Kyushu areas(including Okinawa and Yamaguchi prefectures)

0 - 10% Others

Investment type

(Logistics, Residence, Hotels and Other facilities)

8

FUKUOKA REIT CORPORATION

Investment area

40 - 70% Retail
20 - 50% Office buildings
0 - 30% Others

385
202

Investment Policy
60 - 90%
10 - 30%

ine
aL
im
sh
go
Ka

202

18
13 1915
3
21

Hakata1
11
2JROthers27 (logistics)

Tosu Logistics Center

28
31 20
16

ay
sw
es ne
pr Li
Ex ifu
an za
rb a
U D

Others26 (logistics)

Hakata FD BusinessCenter

Line

12
23 14

17

Ohori Park

SubwayKuko Line

Kumamoto East Front
Building

JR Sasaguri

Others25 (logistics)

10

Hakata Chikushi-Dori
Center Building

Kyushu University Fukuoka Ex pr
Hakozaki Campus R oute 4 Kas essway,
uya Line
Site

6I. Overview of Fukuoka REIT Corporation

I. Overview of Fukuoka REIT Corporation

Initiatives on Sustainability
Certification From External Organizations and Information Disclosure

Endorsement of TCFD
(Task Force on
Climate-related Financial
Disclosures)(September 2022)

In September 2022, we endorsed the recommendations of the TCFD (Task Force on Climate-related Financial Disclosures), which was established by the Financial Stability Board (FSB) to
examine climate-related disclosures and how financial institutions should respond. At the sametime, we joined the TCFD Consortium, an organization of endorsing Japanese companies.

Materially significant issues

Policies and targets

Reduction ofenvironmental load

● Coordinate with property management and building management companies
on promotion of management and reduction of energy consumption, greenhouse gas emissions, water consumption, and waste output

Environmental

Principles for Responsible
Investment (PRI)(September 2018)

Refers to the six basic principles advocated in 2006 by Kofi Annan, the United Nations Secretary-General at the time, for the purpose of reflecting environmental, social and governance(ESG) factors to the investment process, as well as the international network of financial
institutions that affirm the principles.
The Asset Manager became a signatory to the Principles for Responsible Investment (PRI) in
September 2018 in order to implement practices at an international level when it promotes ESG
awareness in real estate investment and management operations.

Materially Significant Issues

DBJ Green Building
Certification

The DBJ Green Building Certification is a certification system established in 2011 as an initiative
to support real estate featuring “environmental and social considerations” and entities that own
and operate such estate. The system evaluates real estate sustainability from five ESG-based
perspectives.
FRC has acquired the certification for 13 properties.

CASBEE(Comprehensive Assessment
System for Built Environment
Efficiency)

CASBEE (Comprehensive Assessment System for Built Environment Efficiency) is a method forevaluating and rating the environmental performance of buildings. It is a system that comprehensively evaluates the quality of buildings including not only environmental consideration such as
using materials and equipment that save energy or achieve smaller environmental loads but also
features like interior comfort and scenic aesthetics. 4 properties owned by FRC were certified.
BELS is a system in which third parties evaluate and indicate the energy conservation performance of non-residential buildings based on the Evaluation Guidelines for the Building Energy-efficiency Labeling System for Non-Residential Buildings (2013).
FRC has acquired the certification for 5 properties.

BELS

SocialGRESB

35% reduction in CO2 emissions(compared with 2019, basic unit)● Carry out performance and function evaluation of properties on a regular basis ● (by 2030)
and ameliorate any deterioration in performance, etc.
85% Green Building Certification rate or

Maintenance andenhancement ofenvironmental andconstruction performance● Maintain and improve competitiveness by acquiring green building certifications and through visual representation of building performancehigher● Improve quality of operations by enhancing and expanding employee education system and promoting acquisition of qualifications● Training per employee(number of times)● Continue to improve office environments and work on providing pleasantworking environments● Improve office environment(number of cases)● Give consideration to work-life balance and boost employee satisfaction
Creation ofpleasant workplaces(Tenant)● Promote improvement of employee satisfaction and work towards increasing
job satisfaction of tenant employees● Conduct regular tenant satisfaction
surveys (all properties)

Contribution to boosting
attractiveness andvitalization of Fukuoka andKyushu● Enhance dissemination of information regarding strengths and charms of
Fukuoka and Kyushu● Join and participate in local economic
organizations● Support research and studies on local economy and industries and promote
attractive urban development in collaboration with local business circles● Host local community events(number of times)

Involvement inlocal community

Governance

GRESB is a benchmark evaluation system that annually assesses the environmental, social andgovernance (ESG) awareness of real estate companies and funds, as well as the name of theorganization that operates it. GRESB was established in 2009 mainly by major European pension
funds that led the Principles for Responsible Investment (PRI). FRC has been a participant since
2018.
GRESB Real Estate Assessment: “4 Stars” and “Green Star.” Disclosure Assessment: the highest“A Level”● (by 2030)

75% waste recycling rate

Creation ofpleasant workplaces(Asset manager)

Principles for Financial Action towards a Sustainable Society (Principles for Financial Action for
Principles for Financial Action
the 21st Century) refers to the principles prepared in October 2011, with the Ministry of the
towards a Sustainable Society
Environment serving as the secretariat, as action guidelines for financial institutions that want to(Principles for Financial Action
fulfill the responsibilities and roles necessary for forming a sustainable society.
for the 21st Century)
The Asset Management Company became a signatory in September 2018, affirming the ideas(September 2018)of the Principles.

KPIs and targets

Information disclosureand dialogue
with stakeholders

Compliance /Risk management● Deepen dialogue and collaboration with local community through participation ● Join and participate in area management
organizations
in community activities and various initiatives using properties under ourmanagement to grow and develop together with the local community● Continued participation in activities that
contribute to the community(number of times)● Disclose financial and non-financial information to stakeholders in an
appropriate and timely manner● Dialogue with investors(number of times)● Build relationships of trust through proactive dialogue with stakeholders andreflect stakeholder feedback in management strategy● Sustainability training for employees(number of times)● Ensure thorough compliance including compliance with laws and ordinancesand elimination of conflict of interest with interested parties, and develop andoperate an appropriate internal risk management system to maintain andimprove corporate value● Compliance training(number of times)

Environmental

Green Building Certification
Green Building certification obtained for 84.6% of entire
portfolio atio of Environmental Certification
R
Acquisition
BELS Evaluation
Certification

14.2%

CASBEE
Certification forReal Estate

0.5%

Certificatedproperties

84.6%● Ratio of green buildings

DBJ Green Building Certification
13 properties owned by FRC were certified(One property has been newly certified, and two properties
have been recertified.)
Newly certified
in Sept. 2023

● Acquired CASBEE Real Estate Assessment Certification(S rank and A rank) for two properties owned

84.6 %

Re-certified in Dec. 2023
80.0%

5.6%
Taihaku Street Business Center
LOGICITY Minato Kashii

DBJ Green Building
Certification

78.5%*As of February 29, 2024 (based on total floor space)certified7

39th
Fiscal Period
Feb. 2024
Rank S (office portion) Rank A (residential portion)

Hakata FD Business Center
FUKUOKA REIT CORPORATION

37th
Fiscal Period
Feb. 2023

Hakata Chikushi-Dori Center Building

LOGICITY Hisayama

FUKUOKA REIT CORPORATION

8

Rank S

II. Semiannual Report

II. Semiannual Report

Overview of Asset Management

Overview of Asset Management

2. Management assessment(1) Brief history of the investment corporation

1. Changes in operating results and financial position
Fiscal Period(unit)

Operating revenues

mm yen[Leasing business revenues]

mm yen38th fiscal period

39th fiscal period(September 1, 2022 toFebruary 28, 2023)(March 1, 2023 toAugust 31, 2023)(September 1, 2023 to
February 29, 2024)

mm yen

9,037[8,921]
5,813[5,147]
3,223
2,851
2,849
201,442[0.1]
83,900101,788[0.0]
98,9389,284[8,852]
5,912[5,231]
3,372
2,988
2,987
203,868[1.2]
86,450101,926[0.1]
98,9389,326[9,088]
5,864[5,166]
3,462
3,031
3,030
214,390[5.2]
96,350101,969[0.0]
98,938

units

796,000

796,000

796,000

796,000

796,000(d)/(e)yen(f)

mm yen127,818
2,804
3,523[3,523][–]

127,875
2,849
3,580[3,580][–]128,048
2,987
3,753[3,753][–]

128,102
3,030
3,807[3,807][–]mm yenmm yenmm yenmm yen(a)

mm yen(b)

mm yen[Change from previous period]%(c)

mm yen(d)

mm yen[Change from previous period]%

Unitholders’ equity
Total number of investment
units outstanding
Net assets per unit
Total dividend
Dividend per unit

37th fiscal period(March 1, 2022 toAugust 31, 2022)

8,830[8,830]5,648[4,974]
3,181
2,805
2,804
201,223[1.2]
83,900101,743[(0.0)]
98,938[Expenses related to leasing business]

Interest-bearing debt
Net assets

36th fiscal period(September 1, 2021 to
February 28, 2022)

8,658[8,658]5,472[4,810]
3,185
2,816
2,814
198,745[(0.5)]
82,400101,753[(0.0)]
98,938Operating expenses
Operating income
Ordinary income
ProfitTotal assets

35th fiscal period(e)[Earnings dividend per unit]

yen[Dividend in excess of earnings per unit]

yen

127,8312,814
3,536[3,536][–](Note 2)%

1.4 [2.9]

1.4 [2.8]

1.4 [2.9]

1.5 [2.9]

1.4 [2.9](Note 2)%

2.8 [5.6]

2.8 [5.5]

2.8 [5.6]

2.9 [5.8]

3.0 [6.0](d)/(b)

%

51.2

50.6

50.5

50.0

47.6

%

Ratio of ordinary income to total
assetsReturn on net assets
Ratio of net assets to total
assets(f)/(e)(Note 2)

%

[0.3]
100.0

[(0.6)]
100.0[(0.1)]
100.0[(0.5)]
100.0[(2.4)]
100.0(c)/(b)

%

41.5

41.7

41.6

42.4

44.9

properties

32

33

33

35

35

m2

572,288.25

578,255.35

577,161.81

580,272.77

590,409.24

%

99.4

99.4

97.9

99.1

98.8

mm yen

1,486

1,514

1,499

1,531

1,609

mm yen

600
5,334
181
4,301
5,403

1,946
5,370
184
4,318
5,425

385
5,274
181
4,234
5,319

1,602
5,152
184
4,086
5,133

970
5,531
182
4,401
5,529

[Change from previous period]

Payout ratio
Ratio of interest-bearing debt tototal assets at end of period (LTV)[Other reference information]
Number of investment
properties (at end of period)
Total leasable floor space(at end of period)

Occupancy rate
(at end of period)

Depreciation and amortization
expensesCapital expenditures
Leasing NOI
Days in fiscal period
FFO (Funds from Operation)
FFO per unityen

(Note 2)mm yendays(g)(Note 2) mm yen(g)/(e)yen(Note 1) In the above table, monetary amounts are rounded down to the nearest specified unit and percentage figures are rounded off to one decimal place.
(Note 2) The indicators are calculated by using the following methods. Furthermore, the figures in square brackets represent annualized value based on the number of days in each fiscal period.
Ratio of ordinary income to total assets
Return on net assets
Payout ratio
Leasing NOIFFO (Funds from Operation)

Ordinary income / average total assets
Average total assets = (Total assets at beginning of period + total assets at end of period) / 2
Profit / average net assets
Average net assets = (Net assets at beginning of period + net assets at end of period) / 2
Dividend per unit (excluding dividend in excess of earnings) / profit per unit
Profit per unit = Profit / total number of investment units outstanding
Leasing business revenues – expenses related to leasing business + depreciation and amortization expenses
Profit + depreciation and amortization expenses + impairment loss - gain or loss on sales of real estate property

FUKUOKA REIT CORPORATION

9

Based on the “Act on Investment Trusts and Investment Corporations” (Act No. 198 in 1951 including later revisions, hereinafter
the “Investment Trusts Act”), FRC was established on July 2, 2004 as Japan’s first real estate investment trust specializing inregional properties, investing in real estate throughout Kyushu (including Okinawa Prefecture), with a central focus on Fukuoka
City, and Yamaguchi Prefecture (hereinafter the “Fukuoka and Kyushu areas”) by using its strength of expertise in regional characteristics, a feature in the real estate industry. FRC started asset management activities on November 9, 2004 after acquisitionof four properties comprising retail properties and an office building, and listed on the Tokyo Stock Exchange, Inc. and the Fukuoka Stock Exchange on June 21, 2005 as the nation’s (code number: 8968).
As of the end of the 39th fiscal period (February 29, 2024), FRC manages a total of 35 properties comprising 10 Retail, 13
Office buildings (including land with leasehold interest for an office building) and 12 Others.

(2) Investment environment and portfolio performance
The Japanese economy showed a mild recovery during the fiscal period under review (the 39th fiscal period) despite the recent
standstill. Looking ahead, with the employment and income environment improving, the economy is expected to continue recovering moderately due to various political measures proving effective, among other factors. However, a downturn in overseas
economies, including the impact of global monetary tightening and concerns about the outlook of the Chinese economy, posesa risk of placing downward pressure on the domestic economy. In addition, attention should be paid to the rising prices, thesituation in the Middle East, and changes in the financial and capital markets as well as the impact of the 2024 Noto Peninsula
earthquake on the economy.
In the Fukuoka and Kyushu area, the core investment target area for FRC, the economy is recovering moderately despite
weaknesses in some areas. Consumer spending remains strong despite the impact of rising prices. Production activities haverecently been weak. The employment and income conditions are improving moderately. As we foresee, we must be wary of the
impact of trends in overseas economies and prices, high costs and their spillovers, labor supply and demand and income formation of employees on the economic and financial conditions in the region.
As for land price trends, according to the 2024 Prefectural Land Price Survey, the combined average price for residential andcommercial land as well as residential land price and commercial land price increased for the third consecutive year, respectively, on a national basis, with the rate of increase expanding. Meanwhile, in Fukuoka City, the central area of FRC’s investment
targets, land prices rose 12.6% year-on-year for commercial land and 9.6% year-on-year for residential land.
Under such circumstances, FRC’s portfolio as a whole achieved generally solid performance in the 39th fiscal period. Amongthem, Canal City Hakata, a city-center retail property, in particular reflected the results of new store replacements due to the renovation of the South Building, in addition to the inbound tourism from Asia (except for China) that continues to be on a recovery trend.
Furthermore, FRC acquired Hakata FD Business Center on September 1, 2023 and disposed Kurume Higashi Kushi󠄀wara  SC (30% co-ownership interest) on November 30, 2023.
When analyzing FRC’s portfolio (on an acquisition price basis) as of the end of the 39th fiscal period by investment target area,
the investment ratio in the Fukuoka metropolitan area accounted for 79.1%; when analyzing by property type, Retail, Officebuildings, and Others accounted for 48.4%, 37.8% and 13.8%, respectively.
Fukuoka Realty Co., Ltd. to which FRC entrusts its asset management (the Asset Manager) has established the Sustainability
Policy and Regulations Concerning Sustainability Management to promote sustainability through environmental, social and governance (ESG) considerations. In the 39th fiscal period, FRC newly acquired DBJ Green Building Certification for one and CASBEE for Building Certification for two of its owned properties. The ratio of properties certified as green buildings to the entire
portfolio was 84.6% against the 2030 target of 85% or more.

(3) Summary of fundraising
In the 39th fiscal period, FRC conducted refinancing of 4,000 million yen as well as new financing of 12,400 million yen and repayment of 2,500 million yen. These led to the balance of its interest-bearing debt outstanding (including investment corporation
bonds) at the end of the period totaling 96,350 million yen. The loan-to-value ratio (ratio of interest-bearing debt (including investment corporation bonds) to total assets) was 44.9% and the ratio of fixed interest rate debt (ratio of fixed-interest rate debt (including investment corporation bonds) to total interest-bearing debt) stood at 90.9% at the end of the 39th fiscal period. In addition, with regard to the commitment line agreement (credit limit: 7,000 million yen) with The Nishi-Nippon City Bank, Ltd. serving
as the agent, FRC extended the commitment period by a year, lengthening the remaining term of commitment to three years.
While endeavoring to reduce refinancing risks by dispersing debt repayment dates and other measures, FRC will investigate mitigating the possible increase in financing costs in accordance with higher interest rates, including reduction of financing periods.
FUKUOKA REIT CORPORATION

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II. Semiannual Report

Overview of Asset Management

Overview of Asset Management

Moreover, the credit ratings assigned to FRC as of the end of the 39th fiscal period are as follows:
Credit Rating Agency
Rating and Investment Information, Inc. (R&I)
Japan Credit Rating Agency, Ltd. (JCR)

Rating Type
Issuer Rating
Long-term Issuer Rating



RatingA+
AA−

Rating Outlook
StableStableFiscal period(4) Summary of performance and dividend
As a result of these management efforts, operating revenues totaled 9,326 million yen and operating income after excluding
operating expenses such as expenses related to leasing business and asset management fees totaled 3,462 million yen. Ordinary income was 3,031 million yen and profit amounted to 3,030 million yen. Management decided to make a dividend of 3,807
yen per unit to meet the requirements of special tax measures for an investment corporation (as stipulated in Article 67-15 of the
Act on Special Measures Concerning Taxation of Japan [Act No. 26 in 1957 including later revisions]). Under this act, an investment corporation is allowed to deduct the maximum amount of dividends paid to investors from its taxable income.

Changes in unitholders’ capital from the incorporation of FRC to the end of the 39th fiscal period are as follows:

July 2, 2004
November 8, 2004
June 20, 2005
July 21, 2005
September 7, 2006
March 1, 2011
March 1, 2013
March 1, 2014
April 27, 2015
March 1, 2018

Item
Established through private placement
Additional issue of investment units through private offering
Additional issue of new investment units through public offering
Additional issue of new investment units through third-party allotment
Additional issue of new investment units through public offering
Additional issue of new investment units through public offering
Additional issue of new investment units through public offering
Split of investment units
Additional issue of new investment units through public offering
Additional issue of new investment units through public offering

Number of investment units
issued (units)
Increase
Balance250
250
82,80083,0507,000
90,0502,000
92,05015,000107,050
16,000123,050
14,950138,000
552,000
690,000
57,000747,000
49,000796,000(mm of yen) (Note 11)

Increase
125
41,4005,944
1,698
11,096
8,913
10,263–
11,701
7,795(Note 1)
(Note 2)
(Note 3)(Note 4)(Note 5)(Note 6)(Note 7)(Note 8)(Note 9)(Note 10)35th fiscal period

36th fiscal period

37th fiscal period

38th fiscal period

39th fiscal period(September 1, 2021 to
February 28, 2022)(March 1, 2022 toAugust 31, 2022)(September 1, 2022 toFebruary 28, 2023)(March 1, 2023 toAugust 31, 2023)(September 1, 2023 to
February 29, 2024)

173,500 yen
153,200 yen

176,100 yen
160,400 yen

168,200 yen
157,000 yen

174,700 yen
156,200 yen

4. Results of dividend, etc.
With respect to the dividend for the 39th fiscal period, FRC determined to distribute the whole unappropriated surplus (except
for the fraction amount, which is the dividend per unit of less than 1 yen) to be eligible for special tax measures for an investment
corporation (as stipulated in Article 67-15-1 of the Special Taxation Measures Act) that allow FRC to deduct the maximum
amount of earnings dividend from its taxable income. Accordingly, dividend per unit for the fiscal period was 3,807 yen.
FUKUOKA REIT CORPORATION

11

38th fiscal period

39th fiscal period(September 1, 2022 toFebruary 28, 2023)(March 1, 2023 toAugust 31, 2023)(September 1, 2023 to
February 29, 2024)

ProfitUnappropriated surplus
Undistributed earnings
Total dividends[Dividend per unit]

Earnings dividends[Earnings dividend per unit]

Contribution refund[Contribution refund per unit]

Of the contribution refund, distribution of thereserve for temporary difference adjustments(Of the contribution refund per unit, distribution per unit of thereserve for temporary difference adjustments)

2,814,814
2,814,821
165
2,814,656[3,536 yen]
2,814,656[3,536 yen]–[–]

2,804,394
2,804,559
251
2,804,308[3,523 yen]
2,804,308[3,523 yen]–[–]

2,849,927
2,850,179
499
2,849,680[3,580 yen]
2,849,680[3,580 yen]–[–]

2,987,191
2,987,690
302
2,987,388[3,753 yen]
2,987,388[3,753 yen]–[–]

3,030,221
3,030,524
152
3,030,372[3,807 yen]
3,030,372[3,807 yen]
–
[–]

–
[–]

–
[–]

–
[–]

–
[–]

–
[–]

–
[–]

–
[–]

–
[–]

–
[–]

–
[–]

Remarks

Balance
125
41,52547,46949,16760,264
69,17779,441
79,441
91,142
98,938The highest and lowest (closing price) market prices on the Real Estate Investment Trust Section of the Tokyo Stock Exchange,
Inc., on which FRC’s investment certificates are listed, in each fiscal period are as follows:

176,000 yen
153,400 yen

37th fiscal period(March 1, 2022 toAugust 31, 2022)

Unitholders’ capital[Changes in market price of investment certificates]

HighestLowest36th fiscal period(September 1, 2021 to
February 28, 2022)(Of the contribution refund per unit, distribution per unit
through the reduction in unitholders’ capital for tax purposes)(Note 1) FRC was established with an issue of investment units at 500,000 yen per unit.
(Note 2) New investment units were issued through private offering at the issue price of 500,000 yen per unit for the purpose of procuring funds for acquiring new properties, etc.
(Note 3) New investment units were issued through public offering at the issue price of 880,000 yen per unit (purchase price of 849,200 yen) for the purpose of procuring funds for acquiring new properties, etc.
(Note 4) New investment units were issued through third-party allotment at the purchase price of 849,200 yen per unit.
(Note 5) New investment units were issued through public offering at the issue price of 766,360 yen per unit (purchase price of 739,772 yen) for the purpose of procuring funds for acquiring new properties, etc.
(Note 6) New investment units were issued through public offering at the issue price of 576,083 yen per unit (purchase price of 557,078 yen) for the purpose of procuring funds for acquiring new properties, etc.
(Note 7) New investment units were issued through public offering at the issue price of 710,580 yen per unit (purchase price of 686,529 yen) for the purpose of procuring funds for acquiring new properties, etc.
(Note 8) FRC implemented a 5-for-1 split of its investment units.
(Note 9) New investment units were issued through public offering at the issue price of 212,257 yen per unit (purchase price of 205,290 yen) for the purpose of procuring funds for acquiring new properties, etc.
(Note 10) New investment units were issued through public offering at the issue price of 164,414 yen per unit (purchase price of 159,102 yen) for the purpose of procuring funds for acquiring new properties, etc.
(Note 11) No consideration has been given to the change in unitholders’ capital due to distribution of dividend in excess of earnings that came from reserve for temporary difference adjustments. The same shallapply hereafter.

Fiscal period

35th fiscal period

Of the contribution refund, distribution throughthe reduction in unitholders’ capital for tax
purposes

3. Change in the number of investment units issued
Date(thousands of yen)

5. Future portfolio management policy and vital issues
FRC will further reinforce management and leasing capabilities by cooperating with property management companies including
sponsor companies, and secure and maintain the stable operation of the properties by making the most use of their advantages.
FRC will make investments based on the basic policy stipulated in its Articles of Incorporation and its basic philosophy: focusing on “specialized areas in which FRC can demonstrate its competitive edge” that are in “high growth potential markets.” Bygeographic location, of Fukuoka and Kyushu areas, FRC will invest 60% to 90% of its assets in the Fukuoka metropolitan area
since the Fukuoka metropolitan area is expected to have a high population growth rate in the future. In addition to the Fukuoka
metropolitan area, management has decided to actively acquire properties in major cities if there are regions or properties where
FRC can generate investment merits from community-oriented viewpoints. FRC will acquire high-quality properties with adequate use of its advantages, such as information gathering ability in the areas, good knowledge of regional properties and close
relations with the local business community including its sponsors and governments, so that investors can continue to invest in
FRC with assurance.
Meanwhile, FRC will build stronger relationships with financial institutions to realize stable fundraising and try to maintain asolid financial structure.

6. Significant events that have occurred after the end of the 39th fiscal period
No relevant items.
(Reference information)

Disposition of Asset
On September 2, 2024, FRC is scheduled to dispose the following real estate trust beneficiary interest.
Type of asset to
be disposed

Property name

Use

Real estate trust
beneficiaryinterest

Marinoa City Fukuoka(Marina Side Building)(Building)RetailDisposition
price(planned)

Disposition
date(planned)

Impact on gain or loss

2-12-30 Odo, Nishi Fukuoka Jisho Co.,783 mm yen
Ltd. and an
Ward, Fukuoka City,(Note 2)undisclosed
company
Fukuoka Prefecture(Note 1)

September
2, 2024

FRC plans to record gain on sales ofreal estate of approximately 0 million
yen as operating revenues for the
fiscal period ending February 2025.

Location

Buyer(Note 1) The name is not disclosed as consent has not been obtained from the buyer.
(Note 2) The disposition price (planned) does not include disposition expenses, the amount equivalent to the settlement of property taxes and city planning taxes, etc. and consumption taxes.
(Note 3) The beneficiary interest disposition agreement for the disposition (the "Disposition Agreement") falls under the category of forward commitment, etc. (a postdated transaction agreement where thesettlement and delivery are to take place one month or more after the conclusion of the agreement as well as other similar agreements). If FRC or the buyer violates the obligations in the Disposition
Agreement, the counterparty may terminate the Disposition Agreement in whole or in part by giving written notice specifying the violation to the party that violated the obligations in the Disposition
Agreement, unless the said violation is resolved within 30 days after receipt of the notice.

FUKUOKA REIT CORPORATION

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II. Semiannual Report

II. Semiannual Report

Overview of the Investment Corporation

Overview of the Investment Corporation

1. Summary of unitholders’ capital
Fiscal period
Total number of authorized investment units
Total number of investment units outstanding
Number of unitholders

35th fiscal period

36th fiscal period

37th fiscal period

38th fiscal period

39th fiscal period

as of February 28, 2022

as of August 31, 2022

as of February 28, 2023

as of August 31, 2023

as of February 29, 2024

10,000,000 units
796,000 units
13,641

10,000,000 units
796,000 units
13,55410,000,000 units
796,000 units
13,52410,000,000 units
796,000 units
14,16410,000,000 units
796,000 units
13,957

FRC has entered into a directors and officers liability insurance agreement as follows:
Scope of the insured

Executive Director andSupervisory Directors

2. Matters related to investment units
The following table sets forth the major unitholders of FRC as of February 29, 2024.
(units)Percentage of total number ofinvestment units outstanding

214,864
85,925
78,13637,27914,76013,294
11,833
10,2279,130
7,670
483,118

26.99
10.79
9.81
4.68
1.85
1.67
1.48
1.28
1.14
0.96
60.69

Investment units held

Name

4. Matters concerning directors and officers liability insurance agreement

Custody Bank of Japan, Ltd. (Trust account)
The Master Trust Bank of Japan, Ltd. (Trust account)
Fukuoka Jisho Co., Ltd.
The Nomura Trust and Banking Co., Ltd. (Investment trust account)
The Shinkumi Federation BankSTATE STREET BANK WEST CLIENT – TREATY 505234
JP MORGAN CHASE BANK 385771
MetLife, Inc.
Shikoku Railway Company
The Joyo Bank, Ltd.
Total(%) (Note)

Overview of agreement[Overview of insured event covered by the insurance]
The directors and officers liability insurance agreement covers such losses as compensation payment and dispute costs to be borne by the
insured when they receive a claim for compensation for the actions they have taken based on their positions at FRC.
[Measures to ensure the appropriateness of the execution of duties]
When the insured suffer damages by actions which they executed while recognizing that it may constitute criminal act or violate the laws andregulations, the loss is not subject of the protection.

5. Names of asset management company, asset custodian and generaladministrators as of the end of the 39th fiscal period
The following table sets forth the asset management company, asset custodian and general administrators of FRC as of February 29, 2024.
Category of entrustment
Asset Management Company
Asset Custodian
General Administrator (accounting matters, etc.)
General Administrator (administration of unitholders’ list)
General Administrator (administration of investment corporation bonds registry)
General Administrator (administration of investment corporation bonds registry)(Note) Percentage of total number of investment units outstanding is rounded down to the nearest specified unit.

Name
Fukuoka Realty Co., Ltd.
Mitsubishi UFJ Trust and Banking Corporation
Mitsubishi UFJ Trust and Banking Corporation
Sumitomo Mitsui Trust Bank, Limited
Sumitomo Mitsui Banking Corporation
Mizuho Bank, Ltd.

3. Matters related to directors(1) The names of FRC’s directors, etc. and their fees for the 39th fiscal period are as
follows:
Title

Name of directors, etc.

Major concurrent assignments

Total fee for each title for the39th fiscal period(thousands of yen) (Note 2)

Executive Director
Supervisory Directors
Independent Auditor

Zenji Koike
President and CEO, Fukuoka Realty Co., Ltd.
Yasuo Kawasho
Representative Partner, Kawasho Authorize Accountant Office
Takashi Tanabe
Representative attorney at law at Tanabe Law OfficePricewaterhouseCoopers Japan–
LLC (Note 3)

–
3,600
8,900

(Note 1) Zenji Koike, the Executive Director, possesses 13 investment units of FRC under his own name. The Supervisory Directors do not possess investment units of FRC under their own name or under another person’s name. Although there are cases where the Supervisory Directors may be directors of companies other than those stated above, none of the companies or those stated above have vested
interest in FRC.
(Note 2) The fees for the Executive Director and Supervisory Directors are the amounts paid to them in the 39th fiscal period, and the fee to the Independent Auditor is the amount payable to it for audits pertaining to the 39th fiscal period. Aside from the above, 6,600 thousand yen was paid to parties who belong to the same network as the Independent Auditor based on their non-audit services.
(Note 3) PricewaterhouseCoopers Japan LLC conducted a merger with PricewaterhouseCoopers Aarata LLC as the surviving audit firm and PricewaterhouseCoopers Kyoto as the dissolving audit firm on December 1, 2023, and changed its name to PricewaterhouseCoopers Japan LLC on the same date.

(2) Policy on deciding to dismiss and not to reappoint the Independent Auditor
FRC will review at its Board of Directors meetings decisions regarding the dismissal of the Independent Auditor in accordancewith the provisions of the Investment Trusts Act, and review decisions not to reappoint the Independent Auditor following thecomprehensive consideration of the audit quality, audit fee and other various conditions.

FUKUOKA REIT CORPORATION13FUKUOKA REIT CORPORATION

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II. Semiannual Report

Status of FRC’s Assets under Management

Status of FRC’s Assets under Management

1. FRC’s asset structure
Type of asset

Real estate

Real estate trust
beneficiary interest

Use

3. Details of real estate properties in the portfolio

Area(Note 1)39th fiscal period

as of August 31, 2023

as of February 29, 2024

The following table provides details of the real estate properties owned by FRC as of February 29, 2024.

Total value of
properties owned

Percentage of
total assets

Total value of
properties owned

Percentage of
total assets(mm of yen) (Note 2)(%) (Note 3)(mm of yen) (Note 2)(%) (Note 3)

–
–
–
1,518
–
2,108
66,55235,31258,966–21,158
5,296
12,954

–
–
–
0.7
–
1.0
32.6
17.3
28.9
–
10.4
2.6
6.4

–
–
–
1,510
–
2,093
66,14734,64872,970–21,163
5,284
10,572

–
–
–
0.7
–
1.0
30.9
16.2
34.0
–
9.9
2.5
4.9

203,868[190,922]

100.0[93.7]

214,390[203,834]

100.0[95.1]

Fukuoka metropolitan area
RetailOther Kyushu areas
Fukuoka metropolitan area
Office buildings
Other Kyushu areas
Fukuoka metropolitan area
OthersOther Kyushu areas
Fukuoka metropolitan area
RetailOther Kyushu areas
Fukuoka metropolitan area
Office buildings
Other Kyushu areas
Fukuoka metropolitan area
OthersOther Kyushu areas
Deposits and other assets
Total amount of assets (Note 4)

38th fiscal period(Note 1) “Fukuoka metropolitan area” refers to cities, towns and villages where 10% or more of the population commute to Fukuoka City for school and work, according to the 2020 census, which states “thenumber of workers and students aged 15 years or older (students including those aged 14 years or younger: particular reference) commuting between their homes and places of work or school” conducted by Fukuoka City and the Statistics Bureau of the Ministry of Internal Affairs and Communications. “Other Kyushu areas” refers to all other parts of Kyushu (excluding the Fukuoka metropolitan area).
(Note 2) “Total value of properties owned” is based on the value on the balance sheet (the value of real estate and real estate trust beneficiary interest is the book value after depreciation).
(Note 3) Concerning the “Percentage of total assets,” the figures are rounded off to one decimal place. The total of individual percentages in the above table may not equal 100%.
(Note 4) Figures in square brackets for “Total amount of assets” refer to the value and percentage of real estate owned in effect to the total amount of assets.

2. Major assets owned by FRC
The following is an overview of the major assets (top ten properties on a book value basis) owned by FRC as of February 29,
2024.
Real estate property name (Note 1)
Canal City Hakata
Canal City Hakata·B
Park Place Oita
Hakata FD Business Center (Note 4)
Canal City Business Center Building
Konoha Mall Hashimoto
Gofukumachi Business Center
Tenjin Nishi-Dori Business Center(Land with leasehold interest)
LOGICITY Minato Kashii
Taihaku Street Business Center
Total

29,73020,38920,316
14,093
12,601
9,799
8,586

48,176.33
31,141.44
121,184.16
12,102.05
23,031.14
22,191.52
19,905.34

47,953.27
29,214.26
120,995.81
10,466.76
22,709.44
22,023.34
19,732.18

99.5
93.8
99.8
86.5
98.6
99.2
99.1

Percentage of total
leasing businessrevenues (%) (Note 3)
11.8
10.5
12.8
1.7
7.2
9.2
6.5

7,754

1,343.51

1,343.51

100.0

1.8

Office buildings

7,579
5,669
136,520

43,233.72
14,677.35
336,986.56

43,233.72
14,573.54
332,245.83

100.0
99.3
98.6

Undisclosed (Note 6)
3.7–

Others
Office buildings–

Total leasable
floor space (m2)Book value(mm of yen)

(Note 5)

Total leased floor Occupancy rate(%) (Note 2)
space (m2)Main use
RetailRetailRetailOffice buildings
Office buildings
RetailOffice buildings(Note 1) The properties listed above are owned in the form of trust beneficiary interest.
(Note 2) “Occupancy rate” refers to the percentage of leased floor space to leasable floor space and the figures are rounded off to one decimal place.
(Note 3) “Percentage of total leasing business revenues” is rounded off to one decimal place.
(Note 4) The asset is the beneficiary interest in trust for the 77% co-ownership interest in the building and the land (part of the building’s leasehold land; so-called “partial ownership”). The figures reflecting thepercentage of ownership interest are indicated. The same shall apply hereafter.
(Note 5) The total leasable floor space indicates the land area recorded in the real estate registry. The same shall apply hereafter.
(Note 6) The figures are not disclosed as no consent to disclosure has been obtained from the tenants.

Real estate property name
Canal City Hakata
Canal City Hakata·B
Park Place Oita
SunLive City Kokura
Konoha Mall Hashimoto
Square Mall Kagoshima Usuki
Kumamoto Intercommunity SC
Hanahata SC
K’s Denki Kagoshima
Marinoa City Fukuoka(Marina Side Building) (Note 2)

Location

Form ofownership

2-22, 1-chome, Sumiyoshi, Hakata
Ward, Fukuoka City
2-1, 1-chome, Sumiyoshi, Hakata
Ward, Fukuoka City1, 2-chome, Koen Dori Nishi, Oita City,
Oita
14-1, 2-chome, Kami Kuzuhara,
Kokura Minami Ward, Kitakyushu City
27-2, 2-chome, Hashimoto, Nishi
Ward, Fukuoka City
2-18, 2-chome, Usuki, Kagoshima
City, Kagoshima
1-5, 1-chome, Kozono, Higashi Ward,
Kumamoto City
9-12, 4-chome, Hanahata, Minami
Ward, Fukuoka City
4-12, Tokai-cho, Kagoshima City,
Kagoshima
12-30, 2-chome, Odo, Nishi Ward,
Fukuoka City

Trust beneficiaryinterest
Trust beneficiaryinterest
Trust beneficiaryinterest
Trust beneficiaryinterest
Trust beneficiaryinterest
Trust beneficiaryinterest
Trust beneficiaryinterest
Trust beneficiaryinterest
Trust beneficiaryinterest
Trust beneficiaryinterest

2-25, 1-chome, Sumiyoshi, Hakata
Ward, Fukuoka City
10-10, Kami Gofukumachi, Hakata
Gofukumachi Business Center
Ward, Fukuoka City
1-23, 2-chome, Hakataeki Higashi,
Sanix Hakata Building
Hakata Ward, Fukuoka City
3-21 Gokushomachi, Hakata Ward,
Taihaku Street Business Center
Fukuoka City
1-2, 3-chome, Higashi Hie, Hakata
Higashi Hie Business Center
Ward, Fukuoka City
5-28, 2-chome, Tenjin, Chuo Ward,
Tenjin Nishi-Dori Center Building
Fukuoka City
4-20, 4-chome, Tenjin, Chuo Ward,
Tenjin North Front Building
Fukuoka City
5-13, 1-chome, Higashi Hie, Hakata
Higashi Hie Business Center II
Ward, Fukuoka City45, 4-chome, Higashi Hie, Hakata
Higashi Hie Business Center III
Ward, Fukuoka City
Tenjin Nishi-Dori Business Center
149, 2-chome, Tenjin, Chuo Ward,
Fukuoka City
(Land with leasehold interest)
2-chome, Hakataekiminami, Hakata
Hakata Chikushi-Dori Center Building 5,
Ward, Fukuoka City
5-15, 1-chome, Shinyashiki, Chuo
Kumamoto East Front Building
Ward, Kumamoto City
2-1 Tsunabamachi, Hakata Ward,
Hakata FD Business Center
Fukuoka City

City House Keyaki Dori
Aqualia Chihaya
D-Wing Tower
Granfore Yakuin Minami
Axion Befu-Ekimae Premium
Hotel FORZA Oita
Tissage Hotel Naha
Tosu Logistics Center
LOGICITY Minato Kashii
LOGICITY Hisayama
LOGICITY Wakamiya

4-23, 2-chome, Maizuru, Chuo Ward,
Fukuoka City
16-21, 2-chome, Kego, Chuo Ward,
Fukuoka City
3-12, 4-chome, Chihaya, Higashi
Ward, Fukuoka City
10-38, 2-chome, Daimyo, Chuo Ward,
Fukuoka City
11-20, 1-chome, Hirao, Chuo Ward,
Fukuoka City
296-1, 3-chome, Befu, Jonan Ward,
Fukuoka City
5-18, 1-chome, Chuo-cho, Oita City,
Oita
14-1, 2-chome, Nishi, Naha City,
Okinawa
1607 Aza Momota, Himekata-cho,Tosu City, Saga
3-4, 2-chome, Minato Kashii, Higashi
Ward, Fukuoka City
2335-3 Oaza Yamada, Hisayamamachi, Kasuya County, Fukuoka
1406 Shimoaruki, Miyawaka City,
Fukuoka

Others subtotal:
Total
FUKUOKA REIT CORPORATION

15

48,176.33

29,00029,73031,141.44

21,70020,389Tanizawa Sogo Appraisal
Co., Ltd.
Tanizawa Sogo Appraisal
Co., Ltd.

121,184.16

20,20020,316

Japan Real Estate Institute61,450.22

8,530

5,483

Japan Real Estate Institute22,191.52

10,1009,799

Tanizawa Sogo Appraisal
Co., Ltd.

14,602.88

4,660

4,158

Japan Real Estate Institute6,968.66

2,840

1,892

Japan Real Estate Institute2,801.15

1,220

939

7,296.17

3,490

2,797

Tanizawa Sogo Appraisal
Co., Ltd.
Tanizawa Sogo Appraisal
Co., Ltd.
Tanizawa Sogo Appraisal
Co., Ltd.

33,069.82

5,264

5,289

107,004

100,796

Trust beneficiaryinterest
Trust beneficiaryinterest
Trust beneficiaryinterest
Trust beneficiaryinterest
Trust beneficiaryinterest
Trust beneficiaryinterest
Trust beneficiaryinterest
Trust beneficiaryinterest
Trust beneficiaryinterest
Trust beneficiaryinterest
Trust beneficiaryinterest

23,031.14

19,10012,601

19,905.34

16,1008,586

Tanizawa Sogo Appraisal
Co., Ltd.
Tanizawa Sogo Appraisal
Co., Ltd.

6,293.75

7,210

3,674

Japan Real Estate Institute

14,677.35

10,400

5,669

Japan Real Estate Institute13,482.02

9,220

4,279

Tanizawa Sogo Appraisal
Co., Ltd.

3,339.32

3,400

2,622

Japan Real Estate Institute5,261.64

5,180

2,266

Japan Real Estate Institute6,214.77

4,880

3,785

2,981.14

3,520

3,160

Tanizawa Sogo Appraisal
Co., Ltd.
Tanizawa Sogo Appraisal
Co., Ltd.

1,343.51

8,770

7,754

Japan Real Estate Institute5,994.41

4,560

4,476

Real estate

3,114.07

1,500

1,510

Tanizawa Sogo Appraisal
Co., Ltd.
Tanizawa Sogo Appraisal
Co., Ltd.

Trust beneficiaryinterest

12,102.05

16,10014,093

Japan Real Estate Institute117,740.51

109,940

74,481

4,821.25

2,100

1,583

2,710.86

1,170

842

5,619.69

2,060

1,133

Japan Real Estate Institute7,187.59

4,030

2,687

2,496.06

1,430

1,118

1,937.75

1,570

1,643

Tanizawa Sogo Appraisal
Co., Ltd.
Tanizawa Sogo Appraisal
Co., Ltd.
Daiwa Real EstateAppraisal Co., Ltd.

5,785.44

1,870

1,484

Japan Real Estate Institute3,758.76

2,940

2,691

Tanizawa Sogo Appraisal
Co., Ltd.

4,173.29

1,640

1,108

Japan Real Estate Institute43,233.72

11,4007,579

24,505.65

5,930

4,575

Tanizawa Sogo Appraisal
Co., Ltd.
Tanizawa Sogo Appraisal
Co., Ltd.
Tanizawa Sogo Appraisal
Co., Ltd.

Office buildings subtotal:
Amex Akasakamon Tower

Real estate appraiser

348,882.35

Retail subtotal:
Canal City Business Center Building

Period-end
Book value atTotal leasable
appraisal value end of period
floor space (m2) (mmof yen) (Note 1)(mm of yen)

Trust beneficiaryinterest
Trust beneficiaryinterest
Trust beneficiaryinterest
Trust beneficiaryinterest
Trust beneficiaryinterest
Trust beneficiaryinterest
Trust beneficiaryinterest
Trust beneficiaryinterest
Trust beneficiaryinterest
Trust beneficiaryinterest
Trust beneficiaryinterest
Real estate

17,556.32

2,590

2,093

123,786.38
590,409.24

38,730255,674

28,541
203,818FUKUOKA REIT CORPORATION

16

Daiwa Real EstateAppraisal Co., Ltd.
Daiwa Real EstateAppraisal Co., Ltd.

II. Semiannual Report

II. Semiannual Report

Status of FRC’s Assets under Management

Status of FRC’s Assets under Management(Property to be acquired)Real estate property nameLocation

Island City Minato Bay related site (Land with Part of 32-1, Minato Kashii 3-chome,
Higashi-Ward, Fukuoka City (Note 5)
leasehold interest) (tentative) (Note 3) (Note 4)

Form ofownership

Period-end
Book value atTotal leasable
appraisal value end of period
floor space (m2) (mmof yen) (Note 1)(mm of yen)

Real estate

Approx. 39,142

8,210(Note 6)

Real estateappraiser
Tanizawa Sogo
Appraisal Co., Ltd.

−

(Note 1)	“Period-end appraisal value” refers to the evaluation value based on appraisals by a real estate appraiser in conformity with the method and standards for asset evaluation stipulated in FRC’s Articles ofIncorporation and rules stipulated by The Investment Trusts Association, Japan.
(Note 2)	The building is scheduled to be disposed on September 2, 2024. The land portion (26,917.74 m2) that will continue to be owned is scheduled to be leased to Fukuoka Jisho Co., Ltd., which is one of
the buyers of the building. The period-end appraisal value of the building as of February 1, 2024 was 754 million yen and the period-end appraisal value of the land as of February 29, 2024 was 4,510
million yen. The period-end appraisal value indicates the total of such amounts.
(Note 3)	The acquisition of the property falls under the category of forward commitment, etc. as provided by the “Comprehensive Guidelines for Supervision of Financial Instruments Business Operators, etc.” set
forth by the Financial Services Agency. As a reservation deposit, FRC paid the amount equivalent to 5% (approximately 4 million yen) of the purchase price corresponding to its acquisition ratio at thetime of applying to the Fukuoka City Government for the purchase. If FRC withdraws from the purchase of the property, the deposit shall be used as cancellation penalty.
(Note 4) The property is planned for delivery on March 31, 2029 (which may be changed depending on the situation of its foundation enhancement work and other factors).
(Note 5) The location and total leasable floor space are to be finalized after measurement surveys to be conducted later and registration of subdivided lots.
(Note 6) The property to be acquired indicates the property for which a letter of agreement has been concluded as of the end of the 39th fiscal period.

Real estate property name39th fiscal period(September 1, 2023 to February 29, 2024)

99.5
93.8
99.8
100.0
99.2
99.1
100.0
100.0
−
100.0
100.0

1,070
951
1,160
292
840
248
89
40
13
105
177

11.8
10.5
12.8
3.2
9.2
2.7
1.0
0.4
0.1
1.2
1.9

55.0

1 (24)
1 (37)
1 (99)
1
1 (121)
12
2
2
−
1
1
23 [300]

99.2

4,990

54.9

656
594
209
331
372
86
152
162
98

7.4
6.7
2.4
3.7
4.2
1.0
1.7
1.8
1.1

1 (62)
35
16
1 (70)
1 (24)
1
12
2
6

98.6
99.1
100.0
99.3
99.4
100.0
100.0
100.0
100.0

652
586
207
333
368
86
150
161
97

7.2
6.5
2.3
3.7
4.1
1.0
1.7
1.8
1.1

100.0

159

1.8

1 (Note 7)

100.0

159

1.8

All real estate and real estate trust beneficiary interests owned by FRC have been entered under “3. Details of real estate properties in the portfolio” on page 16. There is no incorporation of other specified assets as of the end of the 39th fiscal period.

1 (13)
6−
82 [249]

92.8
82.0
−

146
44
−

1.7
0.5
−

89.6
75.4
86.5

140
47
151

1.6
0.5
1.7

9. Status of owned assets by country and region

98.4

3,014

34.1

1 (13)
6
1 (13)
84 [261]

96.8

3,145

34.6

Amex Akasakamon Tower
City House Keyaki Dori
Aqualia Chihaya
D-Wing Tower
Granfore Yakuin Minami
Axion Befu-Ekimae Premium
Hotel FORZA Oita
Tissage Hotel Naha

1 (67)
1 (42)
1 (101)1 (131)
1 (96)
1 (15)
1
1

100.0
100.0
95.7
96.1
97.0
55.1
100.0
100.0

97.0
97.8
98.9
98.9
99.0
74.3
100.0
100.0

1

100.0

0.8
0.4
0.7
1.3
0.4
0.2
0.7
0.5
Undisclosed

1 (65)
1 (41)
1 (104)
1 (135)
1 (98)
1 (20)
1
1

Tosu Logistics Center

67
39
60
117
38
13
63
45
Undisclosed(Note 8)

100.0

0.7
0.4
0.7
1.3
0.4
0.2
0.7
0.4
Undisclosed(Note 8)

1

67
39
60
117
39
21
61
33
Undisclosed(Note 8)(Note 8)

Undisclosed

2

100.0

Undisclosed

Undisclosed(Note 8)(Note 8)1

100.0

Undisclosed

Undisclosed(Note 8)(Note 8)1

100.0

Undisclosed

Undisclosed(Note 8)(Note 8)

Office buildings subtotal:

97.6
96.7
99.9
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0

850
942
1,197
278
856
253
89
40
74
105
177

9.6
10.6
13.5
3.1
9.7
2.9
1.0
0.5
0.8
1.2
2.0

99.3

4,868

1 (64)
34
16
1 (70)
1 (24)
1
12
2
6

100.0
97.7
100.0
99.2
99.4
100.0
100.0
100.0
100.0

1 (Note 7)

1 (22)
1 (42)
1 (101)1
1 (124)
13
2
2
1
1
1
25 [310](Note 2)

(Note 2)

(Note 1)

6. Securities incorporated in the portfolio(%) (Note 5)

Canal City Business Center Building
Gofukumachi Business Center
Sanix Hakata Building
Taihaku Street Business Center
Higashi Hie Business Center
Tenjin Nishi-Dori Center Building
Tenjin North Front Building
Higashi Hie Business Center II
Higashi Hie Business Center III
Tenjin Nishi-Dori Business Center(Land with leasehold interest)
Hakata Chikushi-Dori Center Building
Kumamoto East Front Building
Hakata FD Business Center(%) (Note 5)

No relevant items.

(mm of yen)
(Note 4)Retail subtotal:(mm of yen)
(Note 4)

No relevant items.

(%) (Note 3)

Canal City Hakata
Canal City Hakata·B
Park Place Oita
SunLive City Kokura
Konoha Mall Hashimoto
Square Mall Kagoshima Usuki
Kumamoto Intercommunity SC
Hanahata SC
Kurume Higashi Kushiwara SC (Note 6)
K’s Denki Kagoshima
Marinoa City Fukuoka (Marina Side Building)(%) (Note 3)

4. Details of renewable energy generation facilities in the portfolio
5. Details of the rights to operate public facilities, etc. in the portfolio

38th fiscal period(March 1, 2023 to August 31, 2023)

Total leasing Percentage ofTotal leasing Percentage of
Number ofOccupancy
business
Number ofOccupancy
businesstotal
leasing
total leasing
tenants at end rate at end ofrevenues
tenants at end rate at end ofrevenues
businessbusinessof period
periodduring periods
ofperiodperiodduringperiods
revenues
revenues(Note 1)

(Note 1) “Number of tenants” is based on the total number of sections stipulated in the tenancy agreements for retail and office buildings among relevant properties. For the number of tenants in pass-throughmaster leasing properties, the number of sections stipulated in the tenancy agreements with end tenants is shown in square brackets. The Taihaku Street Business Center is an office building with aresidential tower. Its number of tenants comprises 13 for the office building and 57 for the residence in the 39th fiscal period (13 for the office building and 57 for the residence in the 38th fiscal period).
(Note 2) The total of all the tenants in other than pass-through master leasing properties and the total number of sections stipulated in the tenancy agreements with end tenants for pass-through master leasing
properties is shown in square brackets in the subtotal and total columns for “Number of tenants.”(Note 3) “Occupancy rate” refers to the percentage of leased floor space to leasable floor space and the figures are rounded off to one decimal place.
(Note 4) “Total leasing business revenues” indicates the total of real estate leasing revenues and other revenues from real estate rent in the current fiscal period.
(Note 5) “Percentage of total leasing business revenues” is rounded off to one decimal place, and the total of individual percentages in the above table may not equal 100%.
(Note 6) FRC disposed Kurume Higashi Kushiwara SC (30% co-ownership interest) on November 30, 2023. All three dispositions have been completed with this disposition.
(Note 7) The number of tenants indicates the number of the lessee of the land with leasehold interest.
(Note 8) The figures are not disclosed as no consent to disclosure has been obtained from the tenants.

(Note 2)

(Note 2)LOGICITY Minato Kashii

2

100.0

Undisclosed(Note 8)(Note 8)LOGICITY Hisayama

1

100.0

Undisclosed

Undisclosed(Note 8)(Note 8)LOGICITY Wakamiya

1

100.0

Undisclosed

Undisclosed(Note 8)(Note 8)Others subtotal:

13 [459](Note 2)

98.8

969

10.9

13 [470](Note 2)

99.3

953

10.5

Total

120 [1,018]

100.0

120 [1,031]

98.8

9,088

100.0

(Note 2)

99.1

8,852

FUKUOKA REIT CORPORATION

17(Note 2)

No relevant items.

7. List of specific transaction and forward exchange transaction contract
amount and status of fair value
The following table provides the contract amount of FRC’s specific transactions and the status of its fair value as of February 29, 2024.
Category
Off-market transaction

Contract amount, etc. (mm of yen)
Of which, exceeding 1 year

Type

(Note 1)

Interest rate swap transaction(Receivable floating; Payable fixed)
Total

Fair value(mm of yen) (Note 2)

16,70016,700380

16,70016,700380(Note 1) The contract amount, etc. of the interest rate swap transaction is based on the notional principal amount.
(Note 2) The fair value is calculated by the counterparty of the transaction contract based on the actual interest rate on the market and other factors.

8. Status of other assets

As of the end of the 39th fiscal period, no overseas real estate properties in countries or regions other than Japan are incorporated into FRC’s portfolio.

Capital Expenditures for Owned Real Estate
1. Planned capital expenditures
The following table provides amounts of major items of capital expenditures associated with currently planned renovations, etc.
for real estate properties owned by FRC as of the date of this Semiannual Report. The planned construction costs indicatedbelow may be partly classified as expenses. In addition, FRC will implement renewal construction work in order to maintain andimprove the competitiveness of properties in the market as well as tenant satisfaction, on top of the construction, facilities andreplacement work for which expenditures will be made regularly.
FUKUOKA REIT CORPORATION

18

II. Semiannual Report

II. Semiannual Report

Capital Expenditures for Owned Real Estate

Expenses and Liabilities
1. Details of expenses related to asset management

Planned construction cost
Real estate property nameLocation

Purpose(mm of yen)

Schedule

Construction
Amountcost
already paid

Total
Canal City Hakata

Replacement of central monitoring
devices and equipment
Third phase of renovation of external
walls of Grand Building
Replacement of central monitoring
devices and equipment
Third phase of renovation of external
walls of Grand Building
Replacement of equipment A on the 4th
floor
Switching to LED lighting in exclusive
areas

From April 2023 toApril 2024

173

–

–

From January 2024 toNovember 2024

94

–

–

From April 2023 toApril 2024

223

Chuo Ward, Fukuoka City
Chuo Ward, Fukuoka City

Hakata Ward, Fukuoka City

Canal City Hakata

Hakata Ward, Fukuoka City

Canal City Hakata·B
Canal City Hakata·B

Hakata Ward, Fukuoka City
Hakata Ward, Fukuoka City

Canal City Hakata·B

Hakata Ward, Fukuoka City

Higashi Hie Business Center

Hakata Ward, Fukuoka City

Tenjin Nishi-Dori Center
Building
Tenjin Nishi-Dori Center
Building
LOGICITY Wakamiya

Miyawaka City, Fukuoka

–

–



(thousands of yen)Item544,383(b) Asset custody fees

7,616

7,603

(c) Administrative service fees

58,481

58,817(d) Directors’ compensations

3,600

3,600

(e) Other operating expenses

66,05569,974680,136

697,551

121––

From July 2024 to
February 2025

84

–

–

From August 2023 toMarch 2024

101

–

–

Renovation of external walls

From October 2024 to
February 2025

144

–

–

Replacement of elevator

From October 2024 to
December 2024

81

–

–

2. Status of debt

Renovation of external walls

From August 2024 to
December 2024

63

–

–

As of the end of the 39th fiscal period (February 29, 2024), FRC has the following debt from respective financial institutions.

Total(Note) Aside from the amounts of the asset management fees shown above, 14,875 thousand yen for asset management, capitalized in the acquisition costs, related to the acquisition of Kumamoto East Front
Building and Axion Befu-Ekimae Premium, as well as 7,535 thousand yen for asset management related to the disposition of Kurume Higashi Kushiwara SC (55% co-ownership interest) were paid in the
38th fiscal period, and 35,250 thousand yen for asset management, capitalized in the acquisition costs, related to the acquisition of Hakata FD Business Center, as well as 4,110 thousand yen for asset
management related to the disposition of Kurume Higashi Kushiwara SC (30% co-ownership interest) were paid in the 39th fiscal period.

Location

PurposeCanal City Hakata·B

Hakata Ward, Fukuoka City

Park Place Oita

Oita City, Oita

SunLive City Kokura

Kokura Minami Ward,
Kitakyushu City

Construction cost

PeriodFirst and second phase of renovation of external walls ofGrand Building
First and second phase of renovation of external walls ofGrand Building(mm of yen)

2,000

–

0.420

February 29, 2024

February 29, 2016

2,000

–

0.442

February 29, 2024

February 29, 2016

500

–

0.440

February 29, 2024

July 29, 2016

700

700

0.400

July 31, 2024

February 29, 2016

–

2,000

0.620

February 28, 2025

Subtotal

February 28, 2025

Sumitomo Mitsui Trust Bank

September 30, 2016

300

300

0.418

September 30, 2025

December 30, 2016

1,500
100
100
100
200
100

1,500
100
100
100
200
100

0.718

December 30, 2025

87

Development Bank of JapanThe Oita Bank
The Kagoshima Bank
The Kitakyushu BankThe Juhachi-Shinwa Bank
The Hiroshima Bank128

The Bank of Fukuoka

December 30, 2016

1,500

1,500

0.424

December 30, 2026

Long-term MUFG Bank
debt
Resona Bank

March 31, 2017

800

800

0.481

March 31, 2025

March 31, 2017

600

600

0.658

March 31, 2027

The Higo Bank

March 31, 2017

300

300

0.481

March 31, 2025

The Bank of Fukuoka
The Nishi-Nippon City BankThe Oita Bank
The Kitakyushu Bank
The Miyazaki BankThe Juhachi-Shinwa BankThe Iyo Bank

June 30, 2017

1,300
1,000
700
700
700
1,100
500

1,300
1,000
700
700
700
1,100
500

0.777

June 30, 2026

Development Bank of Japan

June 30, 2017

1,800

1,800

0.650

December 31, 2026

The Bank of Fukuoka

July 31, 2017

2,000

2,000

0.792

July 31, 2027

The Nishi-Nippon City Bank

July 31, 2017

2,000

2,000

0.892

July 31, 2027

Renovation of parking lot on the 3rd floor

From September 2023 to December
2023

85

Taihaku Street Business Center Hakata Ward, Fukuoka City

Renovation of external walls of the office building

From May 2023 to December 2023

127

Taihaku Street Business Center Hakata Ward, Fukuoka City

Renovation of external walls of the residential tower

From August 2023 to February 2024

D-Wing Tower

Chuo Ward, Fukuoka City

Renovation of external walls

From July 2023 to February 2024

Hotel FORZA Oita

Oita City, Oita

Replacement of air-conditioning units

From August 2023 to October 2023

65

3. Reserves for long-term repair and maintenance plans
FRC has deposited the following amounts from the cash flows generated during the 39th fiscal period in order to fund largescale repair and maintenance work in the medium- to long-term, based on long-term repairs and maintenance plans preparedfor respective properties.
(millions of yen)
35th fiscal period

36th fiscal period

37th fiscal period

38th fiscal period

39th fiscal period(September 1, 2021 to
February 28, 2022)(March 1, 2022 toAugust 31, 2022)(September 1, 2022 toFebruary 28, 2023)(March 1, 2023 toAugust 31, 2023)(September 1, 2023 to
February 29, 2024)19(%) (Note 1)

0.620

99

FUKUOKA REIT CORPORATION(mm of yen)–

From December 2023 to February
2024

1,000
–
–
1,000

(mm of yen)February 29, 2016

2,700

Replacement of water receiving tank facilities

1,000
–
–
1,000

Repayment
date

2,000

47

1,000
–
–
1,000

Averageinterest
rate

5,200

From May 2023 to November 2023

1,000
–
–
1,000

The Nishi-Nippon City Bank
Current
maturities Mizuho Bankof longSBI Shinsei Bank
term debt
Development Bank of Japan

Balance as ofFebruary 29,
2024

February 29, 201636

Balance of deposits at beginning of period
Deposits during the period
Amounts used from deposits during the period
Deposits carried forward to the next period

The Bank of Fukuoka

Balance as of
September 1,
2023

Development Bank of Japan

From May 2023 to November 2023

Fiscal period

Drawdown
dateLenderCapital expenditures for the real estate properties owned by FRC totaled 970 million yen in the 39th period. Furthermore, FRC
incurred construction costs of 1,172 million yen in total in the period, including 191 million yen in repair and maintenance expenses classified as expenses on the Statement of Income and 9 million yen in expenses for restoration to former state. The following
table provides the overview of major construction work that was completed in the 39th fiscal period.

Hakata Ward, Fukuoka City

557,556

From January 2024 toNovember 2024

2. Capital expenditures during the 39th fiscal period

Canal City Hakata

39th fiscal period(September 1, 2023 to February 29, 2024)(a) Asset management fees (Note)

Category

Real estate property name38th fiscal period(March 1, 2023 to August 31, 2023)

1,000
–
–
1,000

FUKUOKA REIT CORPORATION

20

Repayment
methodLump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity

Lump-sum uponmaturity

Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity

Lump-sum uponmaturity

Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity

Use offunds
Refinance fund
Refinance fund
Refinance fund
Refinance fund
Refinance fund

Refinance fund
Refinance fund

Refinance fund

Refinance fund
Refinance fund
Refinance fund
Refinance fund

Refinance fund

Refinance fund
Refinance fund
Refinance fundDescription
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee

No collateral/
No guarantee

No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee

No collateral/
No guarantee

No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guaranteeII. Semiannual Report

II. Semiannual Report

Expenses and Liabilities
Category
LenderDrawdown
date

Expenses and Liabilities

Balance as of
September 1,
2023

Balance as ofFebruary 29,
2024

Averageinterest
rate(mm of yen)

(mm of yen)(%) (Note 1)

500
500
100
100
200
100

500
500
100
100
200
100

0.850

Repayment
date

The Nishi-Nippon City Bank
The Bank of Fukuoka
The Oita Bank
The Kitakyushu BankThe Juhachi-Shinwa Bank
The Hiroshima Bank

August 31, 2017

Resona Bank

September 29, 2017

2,000

2,000

0.493

September 30, 2027

The Bank of Fukuoka

December 29, 2017

1,500

1,500

0.812

December 30, 2027

Development Bank of Japan

December 29, 2017

500

500

0.680

December 30, 2027

The Nishi-Nippon City Bank

February 28, 2018

1,900

1,900

0.750

February 29, 2028

Sumitomo Mitsui Trust Bank

February 28, 2018

1,100

1,100

0.600

February 26, 2027

MUFG Bank

February 28, 2018

1,500

1,500

0.500

February 27, 2026

Resona Bank

February 28, 2018

600

600

0.567

February 29, 2028

Development Bank of Japan

March 1, 2018

2,500

2,500

0.720

March 1, 2028

MUFG Bank

March 30, 2018

600

600

0.480

March 31, 2026

The Nishi-Nippon City Bank

March 30, 2018

600

600

0.802

March 31, 2028

The Bank of Fukuoka

March 30, 2018

500

500

0.802

March 31, 2028

Mizuho Bank
Sumitomo Mitsui Banking
Corporation
MUFG Bank

March 30, 2018

500

500

0.630

March 31, 2028

March 30, 2018

500

500

0.504

March 31, 2025

March 30, 2018

500

500

0.490

March 31, 2027

August 31, 2027

March 30, 2018

400

400

0.576

March 31, 2027

The Oita Bank

March 30, 2018

400

400

0.646

March 31, 2028

March 30, 2018

400

400

0.646

March 31, 2028

March 30, 2018

300

300

0.400

March 31, 2025

January 31, 2019

500

500

0.655

January 31, 2029

January 31, 2019

500

500

0.590

January 31, 2028

The Nishi-Nippon City Bank

January 31, 2019

400

400

0.422

January 31, 2029

The Bank of Fukuoka

January 31, 2019

300

300

0.422

January 31, 2029

The Oita Bank

February 28, 2019

200

200

0.334

February 27, 2026

The Kagoshima Bank

February 28, 2019

200

200

0.334

February 27, 2026

The Higo Bank

February 28, 2019

200

200

0.334

February 27, 2026

Resona Bank

February 28, 2019

200

200

0.488

February 28, 2029

Mizuho Bank
The Bank of Saga
The Higo Bank
The Norinchukin Bank

Use offunds

Balance as of
September 1,
2023

Balance as ofFebruary 29,
2024

Averageinterest
rate(mm of yen)

(mm of yen)(%) (Note 1)

July 31, 2020

500

500

0.526

The Iyo Bank

July 31, 2020

200

200

0.526

July 31, 2030

The Juhachi-Shinwa Bank

March 31, 2021

1,000

1,000

0.590

March 31, 2031

July 30, 2021

2,300
1,400
800
500
300

2,300
1,400
800
500
300

0.490

July 31, 2031

Lump-sum uponmaturity

Refinance fundNo collateral/
No guarantee

March 31, 2022

1,000

1,000

0.374

March 31, 2032

Lump-sum uponmaturity

Refinance fundNo collateral/
No guarantee

June 30, 2022

1,600

1,600

0.726

June 29, 2029

Lump-sum uponmaturity

Refinance fundNo collateral/
No guarantee

August 31, 2022

4,000
500
400

4,000
500
400

0.919

August 31, 2032

Lump-sum uponmaturity

Refinance fundNo collateral/
No guarantee

The Higo Bank

March 31, 2023

700

700

0.615

March 31, 2028

The Higo Bank

March 31, 2023

750

750

0.375

March 31, 2033

The Hiroshima Bank

June 30, 2023

500

500

0.541

June 29, 2029

The Hiroshima Bank

June 30, 2023

1,000

1,000

0.635

June 28, 2030

Sumitomo Mitsui Trust Bank

July 31, 2023

900

900

0.501

July 31, 2028

Sumitomo Mitsui Trust Bank
Long-term
Development Bank of Japan
debt

July 31, 2023

600

600

0.829

July 31, 2031

August 31, 2023

2,000

2,000

0.838

August 31, 2029

Development Bank of Japan

August 31, 2023

2,000

2,000

0.907

February 28, 2030

The Nishi-Nippon City Bank

September 29, 2023

–

2,000

0.919

September 30, 2030

The Nishi-Nippon City Bank

September 29, 2023

–

1,900

1.015

September 30, 2031

The Nishi-Nippon City Bank

September 29, 2023

–

1,000

1.189

September 30, 2033

SBI Shinsei Bank

September 29, 2023

–

600

0.767

September 29, 2028

The Higo Bank

September 29, 2023

–

600

0.767

September 29, 2028

The Iyo Bank

September 29, 2023

–

500

0.767

September 29, 2028

The Kagoshima Bank

September 29, 2023

–

300

0.767

September 29, 2028

The Bank of Fukuoka

October 31, 2023

–

2,500

0.323

October 31, 2031

MUFG Bank
Sumitomo Mitsui Banking
Corporation
Mizuho Bank

October 31, 2023

–

1,000

1.203

October 31, 2030

October 31, 2023

–

1,000

1.203

October 31, 2030

October 31, 2023

–

1,000

1.249

October 31, 2031

The Nishi-Nippon City Bank

February 29, 2024

–

1,000

0.889

February 28, 2031

The Nishi-Nippon City Bank

February 29, 2024

–

1,000

1.070

February 28, 2033

The Bank of Fukuoka

February 29, 2024

–

1,000

0.331

February 28, 2031

The Bank of Fukuoka

February 29, 2024

–

1,000

0.371

February 28, 2033

76,25081,45090,65093,350Category

Drawdown
date

Description
Lender
The Kitakyushu Bank

Sumitomo Mitsui Trust Bank
Long-term The Hiroshima Bank
debt
SBI Shinsei Bank
Sumitomo Mitsui Banking
Corporation
MUFG Bank

Repayment
methodJuly 31, 2019

1,200
500
500

1,200
500
500

0.521

July 31, 2029

July 31, 2019

1,500

1,500

0.303

January 29, 2027

MUFG Bank

September 25, 2019

500

500

0.480

September 29, 2028

The Nishi-Nippon City Bank

February 28, 2020

2,500

2,500

0.480

February 28, 2030

Mizuho Bank

February 28, 2020

1,700

1,700

0.420

February 28, 2030

Aozora Bank

June 30, 2020

1,000

1,000

0.569

June 28, 2030

Resona Bank

June 30, 2020

700

700

0.569

June 28, 2030

MUFG Bank

June 30, 2020

500

500

0.600

June 29, 2029

The Kagoshima Bank

June 30, 2020

500

500

0.465

June 30, 2028

Development Bank of Japan

July 31, 2020

1,500

1,500

0.530

July 31, 2030

Mizuho Bank

July 31, 2020

1,000

1,000

0.470

July 31, 2030

FUKUOKA REIT CORPORATION

21

Lump-sum uponmaturity

Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity

Refinance fund

Refinance fund
Refinance fund
Refinance fund
Refinance fund
Refinance fund
Refinance fund
Refinance fundAcquisition fund
Refinance fund
Refinance fund
Refinance fund
Refinance fund
Refinance fund
Refinance fund
Refinance fund
Refinance fund
Refinance fund
Refinance fund
Refinance fund
Refinance fund
Refinance fund
Refinance fund
Refinance fund
Refinance fund
Refinance fund
Refinance fund

Refinance fund

Refinance fund
Refinance fund
Refinance fund
Refinance fund
Refinance fundAcquisition fundAcquisition fundAcquisition fund
Refinance fund
Refinance fundNo collateral/
No guarantee

No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee

Mizuho Bank
The Hiroshima Bank
The Kitakyushu BankThe Iyo Bank
The Higo Bank
Mizuho Trust & Banking Co.,
Ltd.
Sumitomo Mitsui Banking
Corporation
Development Bank of JapanThe Nishi-Nippon City Bank
The Bank of Fukuoka

Subtotal
Total(Note 2)

Repayment
date
July 31, 2030

Repayment
methodLump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity

Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity

Use offunds
Refinance fund
Refinance fund
Refinance fundAcquisition fundAcquisition fund
Refinance fund
Refinance fund
Refinance fund
Refinance fund
Refinance fund
Refinance fund
Refinance fund
Refinance fund
Refinance fund
Refinance fund
Refinance fund
Refinance fund
Refinance fund
Refinance fund
Refinance fund
Refinance fund
Refinance fund
Refinance fund
Refinance fund
Refinance fund
Refinance fundDescription
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee

No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee(Note 1)	The average interest rate is a weighted-average figure during the fiscal period and is rounded to the third decimal place. Furthermore, the average interest rate of debt for which FRC conducted interest
rate swap transactions in order to hedge against interest rate fluctuation risks is the weighted-average figure during the fiscal period taking into consideration the effect of interest rate swaps.
(Note 2)	The borrowing is a Sustainability-Linked Loan in which it has been set as a Sustainability Performance Target (SPT) to reduce CO2 emissions (in terms of intensity) by 35% compared with fiscal 2019by February 28, 2031, and the achievement of the target is linked to the loan conditions. When the SPT is achieved, the contract will offer a preferential treatment for the interest rate determined at thetime of borrowing, for the period from August 2031 to the repayment date.

3. Investment corporation bonds
As of the end of the 39th fiscal period (February 29, 2024), FRC has the following investment corporation bonds outstanding.
FUKUOKA REIT CORPORATION

22

II. Semiannual Report

II. Semiannual Report

Expenses and Liabilities
Issue

Issue date

Acquisitions and Sales during the 39th Fiscal Period

Balance as of
September 1,
2023

Decreaseduring the
fiscal period

Balance as ofFebruary 29,2024(mm of yen)

(mm of yen)

(mm of yen)(%)

Maturity
date

CouponFirst Series ofUnsecured Bonds

December 30, 2013

2,000

2,000

–

1.32

December 29, 2023

Second Series ofUnsecured Bonds

July 31, 2017

2,000

–

2,000

1.00

July 30, 2032

Third Series ofUnsecured Bonds

July 31, 2018

1,000

–

1,000

1.20

July 30, 2038

5,000

2,000

3,000

Total

(2) Other

Maturity
methodUse

Lump-sum uponmaturity(Note 1)
Lump-sum uponmaturity(Note 1)
Lump-sum uponmaturity(Note 1)

Description

Repayment ofdebt
Repayment ofdebt
Repayment ofdebt

No collateral/
No guarantee(Note 2)
No collateral/
No guarantee(Note 2)
No collateral/
No guarantee(Note 2)

No relevant items.

(thousands of yen)(thousands of yen)

14,100,000 (100.0%)

822,000 (100.0%)

14,100,000 (100.0%)
14,100,000 (100.0%)

– (–)
– (–)

(2) Amount of fees paid, etc.

No relevant items.

FRC paid the following fees to the interested parties, etc. during the 39th fiscal period. Furthermore, interested parties, etc. referto the interested parties of the asset management company who have concluded an asset management agreement with FRC
and are designated in Article 123 of the Enforcement Order of the Investment Trusts Act. Of these interested parties, etc., thebelow table indicates the business partners to which FRC paid fees, etc. during the 39th fiscal period.

Acquisitions and Sales during the 39th Fiscal Period

Category

1. Acquisition and sale of real estate property, asset-backed securities,
infrastructure assets, etc. and infrastructure-related assets, etc.
Acquisition

Disposition

Acquisition price(Note)(mm of yen)

September 1, 2023–

14,100

Disposition price

Disposition date

(Note)(mm of yen)–

– November 30, 2023–

14,100–Book value

Gain or loss on sale

(mm of yen)

(mm of yen)

–

–

–

822

577

237

822

577

237

(Note) Acquisition price or disposition price is the amount (transaction price indicated in the sales agreement) excluding expenses (transaction brokerage fees, taxes and other public charges, etc.) required forthe acquisition or disposition of the relevant real estate, etc.

2. Acquisition and sale of other assets
No relevant items.

3. Survey on prices of specified assets, etc.
(1) Real estate, etc.
Acquisition or
disposition

Transaction amount, etc.
Sale amount, etc.
Purchase amount, etc.

(Note 1) The figures in the above table refer to the amounts shown in the sales agreements.
(Note 2) Interested parties, etc. refer to the interested parties of the asset management company who have concluded an asset management agreement with FRC and are designated in Article 123 of the Enforcement Order of the Investment Trusts Act. Of these interested parties, etc., the above table indicates the business partner with which FRC conducted transaction during the 39th fiscal period.

5. Subscription rights to shares

Hakata FD Business Center
Kurume Higashi Kushiwara SC(30% co-ownership interest)
Total(1) Transaction status

Total
Breakdown of transactions with interested parties, etc.
Fukuoka Jisho Co., Ltd.
Total

4. Short-term investment corporation bonds

Acquisition date

4. Transactions with interested parties, etc.

Category(Note 1) The bonds may be repurchased and cancelled by FRC at any time on and after the date following the payment date, unless otherwise determined by the book-entry transfer agent.
(Note 2) The bonds are subject to the limited pari passu clause among specified investment corporation bonds.

Property name

Other than the transaction described in “(1) Real estate, etc.” above, FRC carried out no transaction in the 39th fiscal period thatwas required to have the value, etc. reviewed pursuant to the provisions of Article 201 of the Investment Trusts Act.

Property name

Type of asset

TransactiondateAcquisition

Hakata FD Business Center

Real estate in trust

September 1,
2023

Disposition

Kurume Higashi Kushiwara SC(30% co-ownership interest)

Real estate in trust

November 30,
2023

Acquisition price ordisposition priceReal estateappraisal value(Note 1)(mm of yen)

(Note 2)(mm of yen)

14,100822

Real estateappraiser

Japan Real Estate
Institute
822 Tanizawa Sogo
(Note 3) Appraisal Co., Ltd.

15,000Appraisal
dateMarch 1, 2023
August 31,
2022(Note 1) Acquisition price or disposition price is the amount (transaction price indicated in the sales agreement) excluding related expenses (transaction brokerage fees, taxes and other public charges, etc.) required for the acquisition or disposition of the relevant real estate, etc.
(Note 2) The above appraisal was valuated by applying the “Real Estate Appraisal Standards, Chapter 3: Valuation for price of real estate for securitization.”(Note 3) The appraisal value stated above indicates the value equivalent to 30% co-ownership interest that was disposed of the property's appraisal value (2,740 million yen) as of August 31, 2022.
FUKUOKA REIT CORPORATION

23

Total paid fees (A)(thousands of yen)
(Note 1)

Property leasing brokerage fees (Note 2)

42,945

Property management fees (Note 3)

340,725

Outsourcing fees (Note 2) (Note 4)

1,437,183

Other operating expenses (Note 2)

1,445,110

Breakdown of transactions with interested parties, etc.
Paid amount (B)Paid party(thousands of yen)

Fukuoka Jisho Co., Ltd.
FJ. Entertainment Works Ltd.
Fukuoka Jisho Co., Ltd.
FJ. Entertainment Works Ltd.
Fukuoka Jisho Co., Ltd.
FJ. Entertainment Works Ltd.
Sunlife Co., Ltd.
Fukuoka Jisho Co., Ltd.
FJ. Entertainment Works Ltd.
Sunlife Co., Ltd.

Percentage of total
amount(B) / (A)17,122
19,55779,097
251,707556,605
728,125
132,400
193,735
279,965
2,683

(%)

39.9
45.5
23.2
73.9
38.7
50.7
9.2
13.4
19.4
0.2

(Note 1) Aside from the paid fees shown above, FRC paid the following amounts for repairs, etc. that were ordered to interested parties, etc. during the 39th fiscal period. The amounts include construction work
fees paid to third parties through interested parties, etc.
Fukuoka Jisho Co., Ltd.
282,885 thousand yen
FJ. Entertainment Works Ltd. 310,216 thousand yen
Sunlife Co., Ltd.
438,043 thousand yen(Note 2) The property leasing brokerage fees, outsourcing fees and other operating expenses include property leasing brokerage fees, etc. paid to third parties through interested parties, etc.
(Note 3) The property management fees do not include the following construction supervision fees. In addition, of the fees below, the construction supervision fees paid upon acquiring real estate are includedin the acquisition cost of the relevant real estate.
Fukuoka Jisho Co., Ltd.
18,503 thousand yen
FJ. Entertainment Works Ltd.
18,586 thousand yen(Note 4) The outsourcing fees shown above are paid fees, etc. regarding building management outsourcing fees, and do not coincide with the outsourcing fees described in VIII. Notes to Financial Statements(Notes to statement of income) that include property management fees and others.

5. Transactions with the asset management company regarding
concurrent work conducted by the asset management company
The asset management company (Fukuoka Realty Co., Ltd.) concurrently conducts investment advisory and agency business,but has no such transactions with FRC. The company does not concurrently conduct any class 1 financial instruments transaction business, class 2 financial instruments transaction business, land and building transaction business or real estate syndication business, and has no such transactions with FRC.

FUKUOKA REIT CORPORATION

24

II. Semiannual Report

III. Independent Auditor's Report

Overview of Accounting
1. Assets, liabilities, principal and profits/loss
Please refer to the IV. Balance Sheet, V. Statement of Income, VI. Statement of Changes in Net Assets, VII. Statement of CashDistributions, VIII. Cash Flow Statement, IX. Notes to Financial Statements and X. Supplementary Schedules on later pages ofthis report.

2. Changes in calculation method of depreciation

Independent Auditor’s Report

No relevant items.

To the Board of Directors of Fukuoka REIT Corporation

3. Changes in valuation method of real estate and infrastructure assets,
etc.
No relevant items.

4. Overview of self-managed investment trust beneficiary certificatesNo relevant items.

5. Disclosure on corporation owning foreign real estate
No relevant items.

THE AUDIT OF THE FINANCIAL STATEMENTS
OpinionWe have audited the financial statements of Fukuoka REIT Corporation (the Company), which
comprise the balance sheet as of February 29, 2024, and the statement of income, statement ofchanges in net assets, statement of cash distributions and cash flow statement for the six month period
then ended, notes to financial statements and supplementary schedules.
In our opinion, the accompanying financial statements present fairly, in all material respects, thefinancial position of the Company as of February 29, 2024, and its financial performance and its cash
flows for the six month period then ended in accordance with accounting principles generally acceptedin Japan.
Basis for Opinion

6. Disclosure on real estate owned by corporation owning foreign realestateNo relevant items.

Other

We conducted our audit in accordance with auditing standards generally accepted in Japan. Our
responsibilities under those standards are further described in the Auditor’s Responsibilities for the
Audit of the Financial Statements section of our report. We are independent of the Company inaccordance with the ethical requirements that are relevant to our audit of the financial statements inJapan, and we have fulfilled our other ethical responsibilities in accordance with these requirements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis forour opinion.
Other Information

1. Handling of fractions of monetary amounts and percentage figures
Unless otherwise stated, the figures less than the specified unit are rounded down for monetary amounts and rounded off to one
decimal place for percentage figures throughout this Semiannual Report.

The other information comprises the information included in the semiannual report, but does notinclude the financial statements and our auditor’s report thereon. Management is responsible for theother information. In addition, those charged with governance are responsible for overseeing theCompany’s reporting process of the other information.
Our opinion on the financial statements does not cover the other information and we do not express
any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the otherinformation and, in doing so, consider whether the other information is materially inconsistent withthe financial statements or our knowledge obtained in the audit or otherwise appears to be materially
misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of thisother information, we are required to report that fact.
We have nothing to report in this regard.

PricewaterhouseCoopers Japan LLC
Otemachi Park Building, 1-1-1 Otemachi, Chiyoda-ku, Tokyo 100-0004, Japan
T: +81 (3) 6212 6800, F: +81 (3) 6212 6801, www.pwc.com/jp/assurance

FUKUOKA REIT CORPORATION25FUKUOKA REIT CORPORATION

26

III. Independent Auditor's Report

III. Independent Auditor's Report

Responsibilities of Management and Those Charged with Governance for the Financial
Statements
Management is responsible for the preparation and fair presentation of the financial statements inaccordance with accounting principles generally accepted in Japan, and for such internal control as
management determines is necessary to enable the preparation of financial statements that are freefrom material misstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the Company’s ability
to continue as a going concern and disclosing, as applicable, matters related to going concern.
Those charged with governance are responsible for overseeing the Company’s financial reporting
process.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole
are free from material misstatement, whether due to fraud or error, and to issue an auditor’s reportthat includes our opinion. Reasonable assurance is a high level of assurance, but is not a guaranteethat an audit conducted in accordance with auditing standards generally accepted in Japan will always
detect a material misstatement when it exists. Misstatements can arise from fraud or error and areconsidered material if, individually or in the aggregate, they could reasonably be expected to influence
the economic decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with auditing standards generally accepted in Japan, we exercise
professional judgment and maintain professional skepticism throughout the audit. We also:








Identify and assess the risks of material misstatement of the financial statements, whether due tofraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of notdetecting a material misstatement resulting from fraud is higher than for one resulting from error,
as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the overrideof internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, while the purpose of the financial statement
audit is not to express an opinion on the effectiveness of the Company’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
Conclude on the appropriateness of management’s use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to events
or conditions that may cast significant doubt on the Company’s ability to continue as a going
concern. If we conclude that a material uncertainty exists, we are required to draw attention in our
auditor’s report to the related disclosures in the financial statements or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up
to the date of our auditor’s report. However, future events or conditions may cause the Company
to cease to continue as a going concern.
Evaluate whether the presentation and disclosures of the financial statements are in accordancewith accounting principles generally accepted in Japan, the overall presentation, structure andcontent of the financial statements, including the disclosures, and whether the financial
statements represent the underlying transactions and events in a manner that achieves fairpresentation.

2 of 3

We communicate with management regarding, among other matters, the planned scope and timing of
the audit and significant audit findings, including any significant deficiencies in internal control that
we identify during our audit.
We also provide management with a statement that we have complied with relevant ethicalrequirements regarding independence, and to communicate with them all relationships and othermatters that may reasonably be thought to bear on our independence, and where applicable, actions
taken to eliminate threats or safeguards applied.
FEE-RELATED INFORMATION
In connection with our audit of the financial statements for the six month period ended February 29,
2024, the amounts of fees for the audit and the other services charged to the Company by
PricewaterhouseCoopers Japan LLC and other PwC Network firms are disclosed in “3. Matters related
to directors” included in "Overview of the Investment Corporation" in the Semiannual Report.
Interest required to be disclosed by the Certified Public Accountants Act of Japan
Our firm and its designated engagement partners do not have any interest in the Company which is
required to be disclosed pursuant to the provisions of the Certified Public Accountants Act of Japan.

 自動署名EL 自動署名Co1

Takeshi Yamaguchi

Takashi Sato

Designated Engagement Partner
Certified Public Accountant

Designated Engagement Partner
Certified Public Accountant

May 21, 2024

3 of 3FUKUOKA REIT CORPORATION27

FUKUOKA REIT CORPORATION

28

IV. Balance Sheet

IV. Balance Sheet(thousands of yen)

AssetsCurrent assets
Cash and deposits
Cash and deposits in trust
Operating accounts receivable
Prepaid expenses
Consumption taxes receivable
OthersTotal current assets
Non-current assets
Property, plant and equipment
Buildings
Accumulated depreciation
Buildings, net
Structures
Accumulated depreciation
Structures, net
Machinery and equipment
Accumulated depreciation
Machinery and equipment, net
Tools and fixtures
Accumulated depreciation
Tools and fixtures, net
Lands
Buildings in trust
Accumulated depreciation
Buildings in trust, net
Structures in trust
Accumulated depreciation
Structures in trust, net
Machinery and equipment in trust
Accumulated depreciation
Machinery and equipment in trust, net
Vehicles and transport equipment in trust
Accumulated depreciation
Vehicles and transport equipment in trust, net
Tools and fixtures in trust
Accumulated depreciation
Tools and fixtures in trust, net
Lands in trust
Construction in progress in trust
Total property, plant and equipment
Intangible assets
Leasehold right in trust
Other intangible assets in trust
Total intangible assets
Investment and other assets
Deferred tax assets
Lease and guarantee deposits
Lease and guarantee deposits in trust
Long-term prepaid expenses
Total investment and other assets
Total non-current assets
Deferred assets
Investment corporation bond issuance expenses
Total deferred assets
Total assets

(thousands of yen)

38th fiscal period

39th fiscal period

38th fiscal period

39th fiscal period(as of August 31, 2023)(as of February 29, 2024)(as of August 31, 2023)(as of February 29, 2024)*1*1

FUKUOKA REIT CORPORATION

6,267,244
4,243,120
791,122259,963–
29,755
11,591,207

3,304,641
4,206,465
954,107
288,720
371,690
12,447
9,138,073

2,012,318(93,923)
1,918,394
24,857(1,167)
23,690
0
–
0
1,571
(665)
906
1,684,370
106,613,034(40,472,531)
66,140,502
1,977,417(944,053)
1,033,364
1,522,289(818,780)
703,508
626
(594)
31
1,489,624(1,251,116)
238,508
113,622,069
9,186
185,374,532

2,012,675(119,317)
1,893,357
24,857(1,431)
23,425
0
–
0
3,513
(806)
2,706
1,684,370
113,422,114(41,778,221)
71,643,893
1,983,032(964,144)
1,018,887
1,602,321(853,366)
748,954
626
(594)
31
1,500,654(1,261,849)
238,805
121,016,223
15,885
198,286,541*1*1

5,545,883
2,528
5,548,411

5,545,883
1,711
5,547,594

9
10,000327,135
994,244
1,331,388
192,254,332

1,847
10,000335,492
1,050,380
1,397,720
205,231,856

22,687
22,687
203,868,228

21,02721,027214,390,957

29

Liabilities
Current liabilities
Operating accounts payable
Current maturities of investment corporation bonds
Current maturities of long-term debt
Accounts payable-otherAccrued expenses
Income taxes payable
Accrued consumption taxes
Advances received
Deposits received
Total current liabilities
Non-current liabilities
Investment corporation bonds
Long-term debt
Tenant leasehold and security deposits
Tenant leasehold and security deposits received in trust
Total non-current liabilities
Total liabilities
Net assets
Unitholders’ equity
Unitholders’ capital
Surplus
Unappropriated surplus
Total surplus
Total unitholders’ equity
Total net assets
Total liabilities and net assets*1*3

FUKUOKA REIT CORPORATION

771,072
2,000,000
5,200,000
16,957433,746861
11,301
1,065,467
1,125,748
10,625,155

871,427–2,700,000
19,422
463,375
3,306–
1,058,145
1,078,148
6,193,826

3,000,000
76,250,000
837,073
11,229,544
91,316,617
101,941,773

3,000,000
90,650,000
835,295
11,742,547
106,227,842
112,421,668*1

98,938,764

98,938,764

2,987,690
2,987,690
101,926,454
101,926,454
203,868,228

3,030,524
3,030,524
101,969,288
101,969,288
214,390,957

30*3V. Statement of Income

VI. Statement of Changes in Net Assets

(thousands of yen)

38th fiscal period (March 1, 2023 to August 31, 2023)

38th fiscal period

39th fiscal period(March 1, 2023 to August 31, 2023)(September 1, 2023 to February 29, 2024)(thousands of yen)

Operating revenues
Leasing revenues – real estate*18,154,854*1

8,480,341

Other leasing revenues – real estate*1

697,523*1

608,442Gain on sales of real estate*2432,324*2

237,704

Total operating revenues

9,284,702

Unitholders’ Equity
Unitholders’ capital
Balance as of March 1, 2023

9,326,487

Unappropriated surplus

Total unitholders’ equity

Total net assets

2,850,179

101,788,943

101,788,943

Dividend of surplus(2,849,680)(2,849,680)(2,849,680)

Profit2,987,191

2,987,191

2,987,191

Changes in the current fiscal period

Operating expenses
Expenses related to leasing business

98,938,764

Surplus*1 *3

5,231,929

Asset management fees

544,383*1 *3

5,166,743
557,556

Asset custody fees

7,616

7,603

Total of changes in the current fiscal period

Administrative service fees

58,481

58,817

Balance as of August 31, 2023

Director’s compensations

3,600

3,600

Other operating expenses

66,05569,974

Total operating expenses

5,912,065

5,864,295

3,372,637

3,462,192

Interest received

46

44

Others523

679

Total non-operating revenues

569

724

Interest expenses

255,474

303,409

Interest expenses on investment corporation bonds

29,20024,655

Amortization of investment corporation bond issuance
expenses

1,988

1,660

Financing related expenses

98,436

101,44137

52

385,136431,219

Ordinary income

2,988,069

3,031,697

Profit before income taxes

2,988,069

3,031,697

868

3,313

Income taxes-deferred

9(1,838)

Total income taxes

878

1,475

Operating income
Non-operating revenues–

137,511

137,511

137,51198,938,764

2,987,690

101,926,454

101,926,454

39th fiscal period (September 1, 2023 to February 29, 2024)

Non-operating expenses

OthersTotal non-operating expenses

Income taxes-current

Profit2,987,191

3,030,221

Surplus brought forward

499

302

Unappropriated surplus

2,987,690

3,030,524

FUKUOKA REIT CORPORATION

31(thousands of yen)
Unitholders’ Equity
Unitholders’ capital
Balance as of September 1, 2023

98,938,764

Surplus
Unappropriated surplus

Total unitholders’ equity

Total net assets

2,987,690

101,926,454

101,926,454

Dividend of surplus(2,987,388)(2,987,388)(2,987,388)

Profit3,030,221

3,030,221

3,030,221

Changes in the current fiscal period

Total of changes in the current fiscal period
Balance as of February 29, 2024–

42,83342,83342,83398,938,764

3,030,524

101,969,288

101,969,288

FUKUOKA REIT CORPORATION

32

VII. Statement of Cash Distributions


VIII. Cash Flow Statement(thousands of yen)

Item



(thousands of yen)

38th fiscal period

39th fiscal period

38th fiscal period

39th fiscal period(March 1, 2023 to August 31, 2023)(September 1, 2023 to February 29, 2024)(March 1, 2023 to August 31, 2023)(September 1, 2023 to February 29, 2024)

I. Unappropriated surplus

2,987,690

3,030,524

II. Total dividend[Dividend per investment unit]
III. Surplus brought forward

2,987,388[3,753 yen]302

3,030,372[3,807 yen]
152

Method for calculating dividends

The amount of dividends shall be decided in accordancewith the dividend policy stipulated in Article 38-1-2 of
FRC’s Articles of Incorporation and must exceed 90% of
FRC’s distributable profits as stipulated in Article 67-15-1of the Special Taxation Measures Act.
Following the above policy, FRC shall decide to distribute
2,987,388 thousand yen, which is almost the entire
amount of unappropriated surplus, as earnings dividends.
Moreover, dividend in excess of earnings as stipulated in
Article 38-2 of FRC’s Articles of Incorporation will not beprovided.

The amount of dividends shall be decided in accordancewith the dividend policy stipulated in Article 38-1-2 of
FRC’s Articles of Incorporation and must exceed 90% of
FRC’s distributable profits as stipulated in Article 67-15-1of the Special Taxation Measures Act.
Following the above policy, FRC shall decide to distribute
3,030,372 thousand yen, which is almost the entire
amount of unappropriated surplus, as earnings dividends.
Moreover, dividend in excess of earnings as stipulated in
Article 38-2 of FRC’s Articles of Incorporation will not beprovided.

(Note) Amounts other than the amounts of dividend per investment unit are rounded down to the nearest thousand yen.

Net cash provided by (used in) operating activities
Profit before income taxes

2,988,069

3,031,697

Depreciation and amortization expenses

1,531,607

1,609,261

1,988

1,660

Amortization of investment corporation bond issuance expenses
Interest received

(46)

(44)

Interest expenses

284,674

328,065

Gain on sales of real estate(432,324)(237,704)

Decrease (increase) in operating accounts receivables(52,945)(162,985)–(371,690)

Decrease (increase) in consumption taxes refund receivable
Increase (decrease) in accrued consumption taxes(355,668)(11,301)

Increase (decrease) in operating accounts payable

31,361(62,642)

Increase (decrease) in accounts payable-other(4,706)

2,953

Increase (decrease) in accrued expenses

5,120

6,714

Increase (decrease) in advances received(2,653)(7,322)

Increase (decrease) in deposits expenses

201,313(47,599)

Decrease (increase) in prepaid expenses

10,576(28,756)(68)(56,135)

Others, net

12,75836,328Subtotal

4,219,055

4,030,497

Decrease (increase) in long-term prepaid expenses

Interest income received
Interest expenses paid
Income taxes paid
Net cash provided by (used in) operating activities

46

44(278,734)(305,150)(1,086)(868)

3,939,280

3,724,522

Net cash provided by (used in) investment activities
Purchase of property, plant and equipment(1,539,902)(357)

Proceeds from sale of property, plant and equipment in trust

1,495,942

815,522

Purchase of property, plant and equipment in trust(3,172,032)(14,953,253)–(1,323)

94,927

5,901

Purchase of intangible assets in trust
Proceeds from tenant leasehold and security deposits
Repayments of tenant leasehold and security deposits(16,330)(7,679)Proceeds from tenant leasehold and security deposits in trust

195,388637,210

Repayments of tenant leasehold and security deposits in trust(494,151)(124,208)–(8,357)

Payments of tenant leasehold and security deposits in trust
Proceeds from restricted trust deposits

1,962

2,522

Payments for restricted trust deposits(2,204)(2,439)(3,436,400)(13,636,461)

Net cash provided by (used in) investment activities
Net cash provided by (used in) financial activities
Proceeds from short-term debt

3,000,000

21,900,000

Repayments of short-term debt

(3,000,000)(21,900,000)

Proceeds from long-term debt

8,450,000

16,400,000

Repayments of long-term debt

(5,900,000)(4,500,000)

Redemption of investment corporation bonds
Dividends paid
Net cash provided by (used in) financial activities
Net increase (decrease) in cash and cash equivalents
Balance of cash and cash equivalents at beginning of period
Balance of cash and cash equivalents at end of period

FUKUOKA REIT CORPORATION

33(2,000,000)(2,848,807)(2,987,237)(298,807)

6,912,762

204,072(2,999,175)

10,255,294

10,459,366

10,459,366*1

FUKUOKA REIT CORPORATION

–

34

*1

7,460,191

IX. Notes to Financial Statements

IX. Notes to Financial Statements(Basis of presentation)
The financial statements of FRC, which is incorporated in Japan, have been prepared in accordance with the provisions set forthin the Financial Instruments and Exchange Act of Japan and related regulations and accounting principles generally accepted inJapan, which are different in certain respects to the application and disclosure requirements of International Financial ReportingStandards (“IFRS Standards”).
The accompanying financial statements have been translated into English, for the convenience of readers outside Japan, fromthe audited financial statements that were prepared for Japanese domestic purposes from the accounts and records maintainedby FRC and were filed with the Kanto Local Finance Bureau of the Ministry of Finance as required by the said Act.

5. Scope of funds (cash and cash equivalents) in cash flow The funds (cash and cash equivalents) in the cash flow statement consist of cash on hand and cash in trust;statement
deposits that can be withdrawn at any time and deposits in trust; and short-term investments with a maturityof 3 months or less from the date of acquisition, which are readily convertible to cash and bear only an insignificant risk of value fluctuation.
6. Other significant items fundamental to preparing thefinancial statements(Significant accounting policies)
1. Depreciation method for non-current assets

2. Accounting for deferred assets

3. Standards for recognition of revenues and expenses

4. Method of hedge accounting(1) Property, plant and equipment
Depreciation is calculated using the straight-line method.
The useful lives of major categories of property, plant and equipment including trust assets are as follows:		 Buildings:
10 – 65 years
		 Structures:
15 – 60 years
		 Machinery and equipment:
15 – 30 years
		 Vehicles and transport equipment:
7 years
		 Tools and fixtures:
5 – 20 years(2) Intangible assets
Intangible assets are amortized utilizing the straight-line method.
(3) Long-term prepaid expenses
Long-term prepaid expenses are amortized utilizing the straight-line method.
Investment corporation bond issuance expenses
Investment corporation bond issuance expenses are amortized utilizing the straight-line method over theperiod through redemption.
(1) Standards for revenue recognition
The details of main performance obligations concerning revenues generated from contracts between FRC
and its customers and the ordinary time to fulfil said performance obligations (ordinary time to recognize
revenues) are as follows:➀ Sales of real estate property
		FRC recognizes revenues from sales of real estate property when the purchaser, who is a customer,
obtains control of the relevant real estate property as a result of FRC fulfilling its delivery obligations
stipulated in the transaction agreement of the real estate property.
➁	Utilities income
		FRC recognizes utilities income in accordance with the supply of electricity and water, etc. to the lessee, who is a customer, based on the lease agreement of real estate, etc. and details of agreements
incidental to it. Of the utilities income, in the case that FRC deems itself to be an agent, the net amountobtained by deducting the amount it pays to other parties from the amount it receives as charges forelectricity and gas, etc. supplied by the said other parties is recognized as revenue.
(2) Accounting treatment of property taxes, etc.
In connection with property taxes, city planning taxes and depreciated asset taxes, FRC uses the methodof charging the corresponding amounts of assessed taxes to the current fiscal period as expenses related
to leasing business.
The amount equivalent to property taxes, etc. for the initial fiscal year paid to the seller as settlementmoney upon acquisition of real estate or trust beneficiary interests in real estate as entrusted property is
not expensed but capitalized as part of the acquisition cost of the relevant property.
The amount equivalent to property taxes, etc. capitalized in the acquisition cost of real estate, etc. was
3,166 thousand yen for the 38th fiscal period and 5,735 thousand yen for the 39th fiscal period.
(1) Method of hedge accounting
Deferred hedge accounting is applied for interest rate swap transactions. However, special accounting isapplied for interest rate swap transactions that satisfy the requirements for special accounting.
(2) Hedging instruments and hedged items
Hedging instrument: interest rate swap transactions
Hedged items: interest rates of borrowings(3) Hedging policy
FRC conducts derivative transactions to hedge interest rate fluctuation risks for floating-rate borrowings
based on FRC’s Articles of Incorporation.
(4) Method for assessing the effectiveness of hedging
Assessment of the effectiveness of hedging is omitted as requirements are satisfied for special accounting for interest rate swap transactions.

(Notes to balance sheet)*1. Assets pledged as collateral and secured liabilities
Assets pledged as collateral are as follows:	35(thousands of yen)

Buildings in trust
Lands in trust

38th fiscal period

39th fiscal period

as of August 31, 2023

as of February 29, 2024

6,099,585
16,101,020
22,200,606

Total
Secured liabilities are as follows:	

6,060,672
16,101,020
22,161,693(thousands of yen)
38th fiscal period

39th fiscal period

as of August 31, 2023

as of February 29, 2024

Tenant leasehold and security deposits received in trust

821,462

821,462

2. Balance of unused committed line of credit
FRC has executed committed line of credit agreements with its banks primarily to conduct efficient and dynamic cash management.
[Committed line of credit agreement 1]
	(thousands of yen)

Credit limit
Outstanding debt at end of period
Unused committed line of credit at end of period

38th fiscal period

39th fiscal period

as of August 31, 2023

as of February 29, 2024

6,000,000–
6,000,000[Committed line of credit agreement 2]
	

6,000,000–
6,000,000(thousands of yen)

Credit limit
Outstanding debt at end of period
Unused committed line of credit at end of period

38th fiscal period

39th fiscal period

as of August 31, 2023

as of February 29, 2024

7,000,000–
7,000,000*3. Minimum net assets designated in Article 67- 4 in the Act on Investment Trusts and Investment Corporations.
	(thousands of yen)
38th fiscal period

39th fiscal period

as of August 31, 2023

as of February 29, 2024

50,000FUKUOKA REIT CORPORATION

Accounting methods for trust beneficiary interests in real estate as entrusted property
Regarding trust beneficiary interests in owned real estate as entrusted property, all asset and liability
accounts of the entrusted properties as well as all revenue and expense accounts generated by the entrusted properties are recorded in relevant accounts on the balance sheet and statement of income.
Furthermore, the following material accounts are separately stated on the balance sheet for entrusted
properties recorded in relevant accounts.
➀ Cash and deposits in trust➁	Buildings in trust, structures in trust, machinery and equipment in trust, vehicles and transport equipment in trust, tools and fixtures in trust, lands in trust and construction in progress in trust➂ Leasehold right in trust➃ Other intangible assets in trust➄ Lease and guarantee deposits in trust➅ Tenant leasehold and security deposits received in trust

50,000FUKUOKA REIT CORPORATION

36

7,000,000–
7,000,000

IX. Notes to Financial Statements

IX. Notes to Financial Statements(Notes to statement of income)(Notes to cash flow statement)*1. Breakdown of revenues and expenses related to real estate leasing business.


A. Real estate leasing business revenues
Leasing revenues - real estate		Rents
		 Common charges
		 Parking revenues
Other leasing revenues - real estate		 Incidental income
		 Other miscellaneous income
Total real estate leasing business revenues
B. Expenses related to real estate leasing business
Expenses related to leasing business		 Outsourcing fees		 Repair and maintenance expenses
		 Taxes and other public charges
		 Insurance premiums and trust compensation
		 Utilities expenses
		 Depreciation and amortization expenses
		 Other expenses related to real estate leasing businessTotal expenses related to real estate leasing business
C. Revenues and expenses related to real estate leasing business (A - B)(thousands of yen)
38th fiscal period

39th fiscal period

38th fiscal period

39th fiscal period(March 1, 2023 to August 31, 2023)(September 1, 2023 to February 29, 2024)(March 1, 2023 to August 31, 2023)(September 1, 2023 to February 29, 2024)

6,827,162
902,307425,384

8,154,854

670,653
26,869697,523
8,852,377

1,765,556
308,710752,259
42,576575,322
1,531,607
255,896

5,231,929
5,231,929
3,620,448

7,167,168
890,497422,675
582,646
25,795

1,777,909
191,999
749,471
43,802489,833
1,609,261
304,466

8,480,341

608,442
9,088,783

5,166,743
5,166,743
3,922,039

Kurume Higashi Kushiwara SC (55% co-ownership interest)(thousands of yen)
1,507,000
1,063,617
11,057432,32439th fiscal period (September 1, 2023 to February 29, 2024)
Kurume Higashi Kushiwara SC (30% co-ownership interest)(thousands of yen)
822,000
577,8176,477
237,704*3. Transactions with affiliated companies.
	(thousands of yen)
38th fiscal period

39th fiscal period(March 1, 2023 to August 31, 2023)(September 1, 2023 to February 29, 2024)

Expenses related to real estate leasing business

874,958

891,822(Notes to statement of changes in net assets)
Total number of authorized investment units and total number ofinvestment units outstanding
Total number of authorized investment units
Total number of investment units outstanding

38th fiscal period

39th fiscal period(March 1, 2023 to August 31, 2023)(September 1, 2023 to February 29, 2024)

10,000,000 units
796,000 units

10,000,000 units
796,000 units

FUKUOKA REIT CORPORATION

37

6,267,244
4,243,120(50,998)
10,459,366

3,304,641
4,206,465(50,915)7,460,191(Note) Restricted trust deposits are trust deposits reserved for refunding tenant leasehold and security deposits deposited by tenants and for other purposes.

(Notes to leases)
The future lease revenues under the non-cancellable operating leases [as lessor] are as follows:
	

Total

38th fiscal period (March 1, 2023 to August 31, 2023)

Proceeds from sales of real estate property
Costs of sale of real estate property
Other selling expenses
Gain on sales of real estate property

Cash and deposits
Cash and deposits in trust
Restricted trust deposits (Note)
Cash and cash equivalents

Due within 1 year
Due after 1 year

*2. Breakdown of gain on sales of real estate property

Proceeds from sales of real estate property
Costs of sale of real estate property
Other selling expenses
Gain on sales of real estate property*1. Relationship between the balance of cash and cash equivalents at end of period and the amounts of the corresponding accounts on the balance sheet.
	(thousands of yen)(thousands of yen)

38th fiscal period

39th fiscal period(as of August 31, 2023)(as of February 29, 2024)

5,277,405
8,625,992
13,903,398

5,365,956
10,475,711
15,841,668(Notes to financial instruments)
1. Matters concerning status of financial instruments(1) Policy on handling financial instruments
In order to secure stable earnings and steady growth of assets under management, FRC procures funds primarily throughborrowings from financial institutions, issuance of investment corporation bonds or issuance of investment units for property
acquisitions, repair and maintenance work, repayment of interest-bearing debt and other purposes.
In procuring interest-bearing debt, FRC borrows funds primarily in long-term, fixed interest debt based on the policy of
establishing a solid financial structure, and conducts conservative operations intended to secure financial stability and liquidity by dispersing debt payment dates and utilizing committed lines of credit and through other measures.
With regard to surplus funds, FRC manages them as various deposits and savings, etc. to support efficient management
while considering security.
FRC conducts derivative transactions only for the purpose of hedging the risk of future interest rate fluctuation, and not forthe purpose of speculation.
(2) Description of financial instruments and associated risks, and risk management structure
Debt and investment corporation bonds are funds procured primarily for acquiring real estate trust beneficiary interests andrefinancing of borrowings. Borrowings and investment corporation bonds are exposed to liquidity risks upon debt payment
dates, but FRC works to mitigate these risks by such measures as appropriately controlling the ratio of interest-bearing debt
to total assets and executing commitment line agreements with local financial institutions that are lenders to secure on-handliquidity.
In addition, borrowings with floating interest rates are exposed to interest rate fluctuation risks. However, FRC works to
reduce the risks by such measures as adjusting the ratio of the balance of borrowings with floating interest rates to totalborrowings in accordance with the financial environment and other factors. FRC conducts derivative transactions (specifically interest rate swap transactions) for part of its borrowings with floating interest rates in order to hedge the risk of futurefluctuations in the rates of interest payable. Furthermore, assessment of the effectiveness of these interest rate swaps isomitted as it has been determined that they have met the requirements for special accounting. FRC executes and manages
its derivative transactions in accordance with its financial derivative transaction management policies and, it does so only withfinancial institutions it determines to have a certain level of creditworthiness, by reference to their credit ratings, to reducecounterparty risks.
FRC manages surplus funds in large time deposits. Such deposits are subject to the risks of failure of the financial institutions
holding the deposits as well as other credit risks. FRC mitigates the risks by limiting its deposits to financial institutions with acertain level of creditworthiness, by reference to their credit ratings, as well as by setting short durations for these deposits.
Tenant leasehold and security deposits and tenant leasehold and security deposits received in trust are deposits fromtenants and are exposed to liquidity risks if tenants move out before the contracts expire. FRC mitigates this risk by suchmeasures as securing on-hand liquidity.
FUKUOKA REIT CORPORATION38

IX. Notes to Financial Statements

IX. Notes to Financial Statements(3) Supplementary explanation on matters concerning fair value of financial instruments
Certain assumptions are made in calculating the fair value of financial instruments, and there may be cases where the values
will vary when different assumptions are used.
As for the contract value and other conditions of derivative transactions indicated in “2. Matters concerning fair value offinancial instruments,” the contract value is not an indicator of the market risks related to such transactions.

2. Matters concerning fair value of financial instruments
The following table includes the book values for financial instruments as recorded on the balance sheet, the corresponding fairvalues and the difference between these amounts as of August 31, 2023. Furthermore, notes to Cash and deposits and Cashand deposits in trust are omitted as these are settled with cash and within a short period of time, and thus the fair value is approximately the same as the book value.
(thousands of yen)Book value recorded on thebalance sheet
2,000,000
5,200,000
3,000,000
76,250,000
837,073
11,229,544
98,516,617––(1) Current maturities of investment corporation bonds(2) Current maturities of long-term debt
(3) Investment corporation bonds(4) Long-term debt
(5) Tenant leasehold and security deposits(6) Tenant leasehold and security deposits received in trust
Total of liabilities(7) Derivative transactions
Total of derivative transactions

Fair value

Difference(Note 1)2,010,913
5,199,725
2,907,659
75,032,546
462,589
8,601,145
94,214,579––

10,913(274)(92,340)(1,217,453)(374,484)(2,628,399)(4,302,038)––

The following table includes the book values for financial instruments as recorded on the balance sheet, the corresponding fairvalues and the difference between these amounts as of February 29, 2024. Furthermore, notes to Cash and deposits and Cashand deposits in trust are omitted as these are settled with cash and within a short period of time, and thus the fair value is approximately the same as the book value.
(thousands of yen)Book value recorded on thebalance sheet–
2,700,000
3,000,000
90,650,000
835,295
11,742,547
108,927,842––(1) Current maturities of investment corporation bonds(2) Current maturities of long-term debt
(3) Investment corporation bonds(4) Long-term debt
(5) Tenant leasehold and security deposits(6) Tenant leasehold and security deposits received in trust
Total of liabilities(7) Derivative transactions
Total of derivative transactions

Fair value

Difference(Note 1)–
2,703,737
2,963,049
90,123,518
476,435
8,900,914
105,167,654
–
–

–
3,737
(36,950)(526,481)(358,859)(2,841,633)(3,760,187)––(Note 1) Calculation method for fair value of financial instruments(1) Current maturities of investment corporation bonds, (2) Current maturities of long-term debt, (3) investment corporation bonds and (4) Long-term debt
		The fair value of long-term debt with fixed interest rates (including debt with practical fixed interest rates through interest rate swaps) and investment corporation bonds (the “debt, etc.”) is calculatedby discounting the total amount of principal and interest by the rate assumed as being applicable in the event of a new drawdown of similar debt, etc.
		The fair value of long-term debt with floating interest rates is based on the book value, as the contract terms require the interest rates to be revised in a certain period of time (within six months) andthus is considered to be nearly equal to the book value.
(5) Tenant leasehold and security deposits and (6) Tenant leasehold and security deposits received in trust		The fair value of tenant leasehold and security deposits and tenant leasehold and security deposits received in trust is calculated by using the present value, which is obtained by discounting thefuture cash flows of such deposits by a rate that takes into account the term remaining until the reimbursement deadline and credit risks.
(7) Derivative transactions
		 Please refer to (Notes to derivative transactions).
(Note 2) Amount of repayment of long-term debt and investment corporation bonds scheduled to be due after closing of accounts (as of August 31, 2023)

	(thousands of yen)
Long-term debt
Investment corporationbonds

Due in 1 year or less
5,200,000

1 to 2 years
3,900,000

2 to 3 years
11,100,000

3 to 4 years
12,900,000

4 to 5 years
14,000,000

Due after 5 years
34,350,000

2,000,000

–

–

–

–

3,000,000

FUKUOKA REIT CORPORATION

39

Amount of repayment of long-term debt and investment corporation bonds scheduled to be due after closing of accounts (as of February 29, 2024)	(thousands of yen)
Long-term debt
Investment corporationbonds

Due in 1 year or less
2,700,000

1 to 2 years
6,400,000

2 to 3 years
12,500,000

3 to 4 years
14,000,000

4 to 5 years
10,900,000

Due after 5 years
46,850,000

–

–

–

–

–

3,000,000(Notes to investment securities)
38th fiscal period (as of August 31, 2023)
Not applicable.

39th fiscal period (as of February 29, 2024)
Not applicable.

(Notes to derivative transactions)
1. Derivatives to which hedge accounting is not applied
38th fiscal period (as of August 31, 2023)
Not applicable.

39th fiscal period (as of February 29, 2024)
Not applicable.

2. Derivatives to which hedge accounting is applied
38th fiscal period (as of August 31, 2023)
The following is the contract amount or amount equivalent to the principal provided in the contract as of the closing of accounts
for each method of hedge accounting.
(thousands of yen)
Method of hedge accounting

Type of derivative transactions,etc.

Main hedged
item

Special accounting for interest rate swaps

Interest rate swap transaction
Receivable floating; Payable fixedLong-term debt

Contract amount, etc.
Of which,exceeding 1 year
19,200,000

16,700,000

Fair
value

Calculation
method for thefair value(*)–(*) Transactions for which special accounting for interest rate swaps is applied are combined with long-term debt for accounting purposes. Accordingly, their fair value is included in the fair value of the relevant
long-term debt (refer to Notes to financial instruments, 2. Matters concerning fair value of financial instruments, (Note 1) (2) and (4).

39th fiscal period (as of February 29, 2024)
The following is the contract amount or amount equivalent to the principal provided in the contract as of the closing of accounts
for each method of hedge accounting.
(thousands of yen)
Method of hedge accounting

Type of derivative transactions,etc.

Main hedged
item

Special accounting for interest rate swaps

Interest rate swap transaction
Receivable floating; Payable fixedLong-term debt

Contract amount, etc.
Of which,exceeding 1 year
16,700,000

16,700,000

Fair
value

Calculation
method for thefair value(*)–(*) Transactions for which special accounting for interest rate swaps is applied are combined with long-term debt for accounting purposes. Accordingly, their fair value is included in the fair value of the relevant
long-term debt (refer to Notes to financial instruments, 2. Matters concerning fair value of financial instruments, (Note 1) (2) and (4).

FUKUOKA REIT CORPORATION

40

IX. Notes to Financial Statements

IX. Notes to Financial Statements(Notes to retirement benefits)
39th fiscal period (from September 1, 2023 to February 29, 2024)

38th fiscal period (as of August 31, 2023)



Not applicable as FRC does not have any retirement benefit system.

Classification

39th fiscal period (as of February 29, 2024)

Name

Location

CapitalBusiness
description

Not applicable as FRC does not have any retirement benefit system.
Other
affiliates(Notes to tax effect accounting)

Fukuoka
Jisho Co.,Ltd.

Hakata Ward,
Fukuoka City

100,000(Note 3)

1. Breakdown of primary causes for occurrence of deferred tax assets and deferred tax liabilities.


General realestatebusiness(thousands of yen)

38th fiscal period

39th fiscal period(as of August 31, 2023)(as of February 29, 2024)

Deferred tax assets
Amount of revenue recognition for tax purposes
Amount of accrued business taxes not deductible from taxable income
Total deferred tax assets
Deferred tax assets, net

1,669
178
1,847
1,847

–
9
9
9

FRC’s share of
voting rights, etc.
[or ownership of suchin FRC]

Descriptionofrelationship

Descriptionoftransaction

Purchase ofreal estate,
Consignment etc. (Note 1)
Ownership in FRC
of real estate
Direct [9.82%]
management, Consignment
Indirect [0. 07%]of real estateetc.
management,
etc. (Note 2)(thousands of yen)Transaction
amountCategory

Balance at
end ofperiod14,100,000––

Operatingaccounts
payable84,245(Note 4)

891,822(Note 4)(Note 1) Transaction terms and conditions are determined in reference to appraisal value provided by a third-party, after negotiating on prices.
(Note 2) Transaction terms and conditions are determined in reference to market prices, etc. and by concluding business consignment agreements after negotiating on prices.
(Note 3) FRC has concluded a building lease and management consignment agreement with Fukuoka Jisho Co., Ltd. for Taihaku Street Business Center and Hakata FD Business Center. The lease contract is amaster lease type with pass-through rent, in which rents and other proceeds from end tenants are directly related to an increase or decrease of FRC’s revenues.
For the property covered by the said type of agreement, the above table shows figures that regard end tenants as direct lessees.
(Note 4) Consumption taxes are not included in the transaction amount but are included in the balance at end of period.

(2) Affiliated companies, etc.
2. Breakdown of significant causes of the difference between the effective statutory income tax rate and the effective income tax rate after application of tax effect accounting.
(%)
38th fiscal period

39th fiscal period(as of August 31, 2023)(as of February 29, 2024)

Effective statutory income tax rate
Deductible dividend amount
Other
Effective income tax rate after application of tax effect accounting

31.25(31.25)
0.02
0.03

31.25
(31.24)0.04
0.05

38th fiscal period (from March 1, 2023 to August 31, 2023)
Not applicable.

39th fiscal period (from September 1, 2023 to February 29, 2024)
Not applicable.

(3) Sister companies(Notes to equity method income and earnings)

38th fiscal period (from March 1, 2023 to August 31, 2023)


38th fiscal period (from March 1, 2023 to August 31, 2023)
Not applicable as FRC does not have any affiliated companies.

Classification

39th fiscal period (from September 1, 2023 to February 29, 2024)
Not applicable as FRC does not have any affiliated companies.

(Notes to transactions with related parties)
1. Transactions with related parties(1) Parent company and major corporate unitholders
38th fiscal period (from March 1, 2023 to August 31, 2023)
Classification

Name

Location

CapitalBusiness
description

Other
affiliates

Fukuoka
Jisho Co.,Ltd.

Hakata Ward,
Fukuoka City

100,000

General realestatebusiness(Note 2)

FRC’s share of
voting rights, etc.

Descriptionofrelationship(thousands of yen)
Descriptionoftransaction

Transaction
amountCategory

Balance at
end ofperiodConsignment Consignment
Ownership in FRC
of real estate of real estate
Direct [9.19%]
management, management,
Indirect [0. 70%]
etc.
etc. (Note 1)

874,958

Operatingaccounts
payable93,206[or ownership of suchin FRC](Note 3)Name

Location

Subsidiaries
of otheraffiliates

FJ.
Entertainment Hakata Ward,
Works Ltd. Fukuoka City

Subsidiaries
of otheraffiliates

Fukuoka
Realty Co.,Ltd.

CapitalBusiness
description

20,000Real estatebusiness

200,000

Asset
managementof FRC andotherbusinesses(Note 2)

Hakata Ward,
Fukuoka City

FRC’s share of
voting rights, etc. Description of Description of Transaction[or ownership of relationship transaction
amountsuch in FRC]
Consignment Consignmentof real estate of real estate 1,540,326–(Note 5)management, management,
etc.
etc. (Note 1)

–

Asset
managementof FRC, etc.
(Note 3)41

Payment of
asset
managementfees

544,383(Note 5)

Category

Balance at
end ofperiodOperatingaccounts
payable288,930

Accruedexpenses

317,498(Note 5)(Note 5)(Note 4)(Note 1) Transaction terms and conditions are determined in reference to market prices, etc. and by concluding business consignment agreements after negotiating on prices.
(Note 2) FRC has concluded with FJ. Entertainment Works Ltd. a building lease and management consignment agreement for Canal City Hakata, Canal City Hakata·B, Canal City Business Center Building andKonoha Mall Hashimoto, and a real estate lease and management consignment agreement for Park Place Oita. The relevant lease agreements are master lease type with pass-through rent, in which
rents and other proceeds from end tenants are directly related to an increase or decrease of FRC’s revenues. For the properties covered by the said type of the agreements, the above table shows figuresthat regard end tenants as direct lessees.
(Note 3) As of the date of this document, Zenji Koike concurrently serves as President and CEO of Fukuoka Realty Co., Ltd.
(Note 4) The amount of the asset management fees is decided based on the asset management consignment agreement following discussion between the concerned parties.
(Note 5) Consumption taxes are not included in the transaction amount but are included in the balance at end of period.

(Note 3)(Note 1) Transaction terms and conditions are determined in reference to market prices, etc. and by concluding business consignment agreements after negotiating on prices.
(Note 2) FRC has concluded a building lease and management consignment agreement with Fukuoka Jisho Co., Ltd. for Taihaku Street Business Center. The lease contract is a master lease type with passthrough rent, in which rents and other proceeds from end tenants are directly related to an increase or decrease of FRC’s revenues.
For the property covered by the said type of agreement, the above table shows figures that regard end tenants as direct lessees.
(Note 3) Consumption taxes are not included in the transaction amount but are included in the balance at end of period.

FUKUOKA REIT CORPORATION(thousands of yen)

FUKUOKA REIT CORPORATION

42

IX. Notes to Financial Statements

IX. Notes to Financial Statements(Notes to properties for lease)39th fiscal period (from September 1, 2023 to February 29, 2024)
Classification

Name

Location

Subsidiaries
of otheraffiliates

FJ.
Entertainment Hakata Ward,
Works Ltd. Fukuoka City

Subsidiaries
of otheraffiliates

Fukuoka
Realty Co.,Ltd.

Capital

20,000Business
description

Real estatebusiness(Note 2)

Hakata Ward,
Fukuoka City

200,000

Asset
managementof FRC andotherbusinesses(thousands of yen)

FRC’s share of
voting rights, etc. Description of Description of Transaction[or ownership of relationship transaction
amountsuch in FRC]
Consignment Consignmentof real estate of real estate 1,370,860–(Note 5)management, management,
etc.
etc. (Note 1)

–

Asset
managementof FRC, etc.
(Note 3)

Payment of
asset
managementfees

557,556(Note 5)

Category

Balance at
end ofperiodOperatingaccounts
payable207,712

Accruedexpenses

324,491

FRC owns retail, office buildings and other properties for lease in the Kyushu area centering on Fukuoka Prefecture. The following table provides the book value recorded on the balance sheet, amount of change during the period and fair value of theseproperties for lease.
(thousands of yen)
Use

(Note 5)Retail(Note 5)(Note 4)

Office buildings(Note 1) Transaction terms and conditions are determined in reference to market prices, etc. and by concluding business consignment agreements after negotiating on prices.
(Note 2) FRC has concluded with FJ. Entertainment Works Ltd. a building lease and management consignment agreement for Canal City Hakata, Canal City Hakata·B, Canal City Business Center Building andKonoha Mall Hashimoto, and a real estate lease and management consignment agreement for Park Place Oita. The relevant lease agreements are master lease type with pass-through rent, in which
rents and other proceeds from end tenants are directly related to an increase or decrease of FRC’s revenues. For the properties covered by the said type of the agreements, the above table shows figuresthat regard end tenants as direct lessees.
(Note 3) As of the end of the 39th fiscal period (February 29, 2024), Zenji Koike concurrently serves as President and CEO of Fukuoka Realty Co., Ltd.
(Note 4) The amount of the asset management fees is decided based on the asset management consignment agreement following discussion between the concerned parties.
(Note 5) Consumption taxes are not included in the transaction amount but are included in the balance at end of period.

Others(4) Directors and major individual unitholders
38th fiscal period (from March 1, 2023 to August 31, 2023)

Total

Not applicable.

39th fiscal period (from September 1, 2023 to February 29, 2024)
Not applicable.

2. Parent company and major affiliated companies
38th fiscal period (from March 1, 2023 to August 31, 2023)
Not applicable.

38th fiscal period

39th fiscal period(March 1, 2023 to August 31, 2023)(September 1, 2023 to February 29, 2024)

Amount recorded on the balance sheet
Balance at beginning of period
Amount of change during period
Balance at end of period
Fair value at end of period
Amount recorded on the balance sheet
Balance at beginning of period
Amount of change during period
Balance at end of period
Fair value at end of period
Amount recorded on the balance sheet
Balance at beginning of period
Amount of change during period
Balance at end of period
Fair value at end of period
Amount recorded on the balance sheet
Balance at beginning of period
Amount of change during period
Balance at end of period
Fair value at end of period

102,898,586(1,028,723)
101,869,863
108,752,000

101,869,863(1,060,210)
100,809,652
107,033,000

59,021,250
1,464,364
60,485,614
93,390,000

60,485,614
13,996,609
74,482,224
109,940,000

26,835,252
1,732,213
28,567,465
37,250,000

28,567,465(25,206)
28,542,258
38,730,000

188,755,089
2,167,854
190,922,943
239,392,000

190,922,943
12,911,192
203,834,136
255,703,000(Note 1) Amount recorded on the balance sheet is the cost of acquisition less accumulated depreciation.
(Note 2) Of the amount of change during the 38th fiscal period, the amount of increase is primarily attributable to acquisition of two properties (Kumamoto East Front Building and Axion Befu-Ekimae Premium)(3,186 million yen in total) and capital expenditures (1,602 million yen), and the amount of decrease is primarily attributable to disposition of Kurume Higashi Kushiwara SC (55% co-ownership interest)(1,063 million yen) and depreciation and amortization expenses (1,531 million yen). Of the amount of change during the 39th fiscal period, the amount of increase is primarily attributable to acquisitionof Hakata FD Business Center (14,165 million yen) and capital expenditures (970 million yen), and the amount of decrease is primarily attributable to disposition of Kurume Higashi Kushiwara SC (30%
co-ownership interest) (577 million yen) and depreciation and amortization expenses (1,609 million yen).
(Note 3) The fair value at end of period is the appraisal value provided by outside real estate appraisers. Disposition price is indicated for the building of Marinoa City Fukuoka (Marina Side Building) for which apurchase and sale agreement has been concluded as of February 29, 2024 during the 39th fiscal period.

The following table provides the income (loss) from properties for lease.
(thousands of yen)

39th fiscal period (from September 1, 2023 to February 29, 2024)

Use

Not applicable.
Retail(Notes to asset retirement obligations)
38th fiscal period (from March 1, 2023 to August 31, 2023)
Not applicable.

Office buildings

39th fiscal period (from September 1, 2023 to February 29, 2024)
Not applicable.

OthersTotal

38th fiscal period

39th fiscal period(March 1, 2023 to August 31, 2023)(September 1, 2023 to February 29, 2024)

Amount recorded on the statement of income
Real estate leasing business revenues
Expenses related to real estate leasing business
Revenues and expenses related to real estate leasing businessAmount recorded on the statement of income
Real estate leasing business revenues
Expenses related to real estate leasing business
Revenues and expenses related to real estate leasing businessAmount recorded on the statement of income
Real estate leasing business revenues
Expenses related to real estate leasing business
Revenues and expenses related to real estate leasing businessAmount recorded on the statement of income
Real estate leasing business revenues
Expenses related to real estate leasing business
Revenues and expenses related to real estate leasing business

4,868,305
3,381,193
1,487,111

4,990,426
3,211,768
1,778,657

3,014,967
1,404,694
1,610,272

3,145,066
1,500,464
1,644,602

969,105
446,040
523,064

953,290454,510498,779

8,852,377
5,231,929
3,620,448

9,088,783
5,166,743
3,922,039(Note) Real estate leasing business revenues and expenses related to real estate leasing business are comprised of leasing business revenues and accompanying expenses (outsourcing fees, depreciation andamortization expenses, taxes and other public charges, etc.), and are recorded as Leasing revenues - real estate, Other leasing revenues - real estate and Expenses related to leasing business, respectively.

FUKUOKA REIT CORPORATION43FUKUOKA REIT CORPORATION

44

IX. Notes to Financial Statements

IX. Notes to Financial Statements(Notesto revenue recognition)Descriptions are omitted as FRC’s operating revenues under single product/service classification for outside customers exceed 90% of operating revenues recorded in the statement of income.

38th fiscal period (from March 1, 2023 to August 31, 2023)
1. Breakdown information on revenue from contracts with customers

Proceeds from sales of real estate
Utilities income
OthersTotal(thousands of yen)

Revenues from contracts with customers (Note 1)
1,507,000
511,143
109,184
2,127,328

Sales to external customers (Note 2)
432,324
511,143
8,341,234
9,284,702(Note 1) Leasing business revenues subject to the “Accounting Standard for Lease Transactions” (ASBJ Statement No.13) and transfers of real estate property subject to the “Practical Guidelines on Accounting
by Transferors for Securitization of Real Estate Using Special Purpose Companies” (Accounting System Committee Report No.15 of the Japanese Institute of Certified Public Accountants) are excluded
from “Revenues from contracts with customers” as such revenues are not covered by the Accounting Standard for Revenue Recognition. Revenues generated from contracts with customers mainly
represent proceeds from sales of real estate and utilities income.
(Note 2) As sale of real estate is recorded as gain on sales of real estate property on the statement of income based on the "Regulations on calculations of investment corporations” (Cabinet Office Order No. 47
of 2006), the amount obtained by deducting costs of sale of real estate property and other selling expenses from proceeds from sales of real estate is indicated.

2. Information for understanding the amount of revenue for the current fiscal period and the next fiscal period and thereafter
Transaction price allocated to remaining performance obligations
As of August 31, 2023, the total transaction price allocated to the remaining performance obligations related to the sale of realestate properties was 822,000 thousand yen for the real estate property for which a sales agreement was signed on October
26, 2022. FRC anticipates to recognize revenues for the said remaining performance obligations on November 30, 2023 upon
the scheduled delivery of the relevant real estate property.

39th fiscal period (from September 1, 2023 to February 29, 2024)
1. Breakdown information on revenue from contracts with customers

Proceeds from sales of real estate
Utilities income
OthersTotal(thousands of yen)

Revenues from contracts with customers (Note 1)
822,000
434,898
90,996
1,347,895

Sales to external customers (Note 2)
237,704
434,898
8,653,885
9,326,487(Note 1) Leasing business revenues subject to the “Accounting Standard for Lease Transactions” (ASBJ Statement No.13) and transfers of real estate property subject to the “Practical Guidelines on Accounting
by Transferors for Securitization of Real Estate Using Special Purpose Companies” (Accounting System Committee Report No.15 of the Japanese Institute of Certified Public Accountants) are excluded
from “Revenues from contracts with customers” as such revenues are not covered by the Accounting Standard for Revenue Recognition. Revenues generated from contracts with customers mainly
represent proceeds from sales of real estate and utilities income.
(Note 2) As sale of real estate is recorded as gain on sales of real estate property on the statement of income based on the "Regulations on calculations of investment corporations” (Cabinet Office Order No. 47
of 2006), the amount obtained by deducting costs of sale of real estate property and other selling expenses from proceeds from sales of real estate is indicated.

2. Information for understanding the amount of revenue for the current fiscal period and the next fiscal period and thereafter
Transaction price allocated to remaining performance obligations
As of February 29, 2024, the total transaction price allocated to the remaining performance obligations related to the sale ofreal estate properties was 783,000 thousand yen for the real estate property for which a sales agreement was signed on
February 29, 2024. FRC anticipates to recognize revenues for the said remaining performance obligations on September 2,2024 upon the scheduled delivery of the relevant real estate property.

(Notes to segment information)[Segment information]
Descriptions omitted as FRC has a single business segment of real estate leasing business.

(2) Information by region(a) Operating revenues
Descriptions are omitted as FRC’s operating revenues for outside customers in Japan exceed 90% of operating revenues
recorded in the statement of income.
(b) Property, plant and equipment
Descriptions are omitted as the amount of FRC’s property, plant and equipment located in Japan exceeds 90% of property, plant and equipment recorded on the balance sheet.

(3) Information by major customer
Descriptions are omitted as FRC’s operating revenues for an individual outside customer are less than 10% of operating
revenues recorded in the statement of income.

39th fiscal period (from September 1, 2023 to February 29, 2024)(1) Information by product and service
Descriptions are omitted as FRC’s operating revenues under single product/service classification for outside customers exceed 90% of operating revenues recorded in the statement of income.

(2) Information by region(a) Operating revenues
Descriptions are omitted as FRC’s operating revenues for outside customers in Japan exceed 90% of operating revenues
recorded in the statement of income.
(b) Property, plant and equipment
Descriptions are omitted as the amount of FRC’s property, plant and equipment located in Japan exceeds 90% of property, plant and equipment recorded on the balance sheet.

(3) Information by major customer
Descriptions are omitted as FRC’s operating revenues for an individual outside customer are less than 10% of operating
revenues recorded in the statement of income.

(Notes to per unit information)
38th fiscal period

39th fiscal period(March 1, 2023 to August 31, 2023)(September 1, 2023 to February 29, 2024)

128,048
3,752

Net assets per unit (yen)Profit per unit (yen)(Note 1) Profit per unit was calculated by dividing the profit by the daily weighted average number of investment units. Diluted profit per unit is not stated as there are no dilutive investment units.
(Note 2) Profit per unit was calculated based on the following data:

38th fiscal period

39th fiscal period(March 1, 2023 to August 31, 2023)(September 1, 2023 to February 29, 2024)

2,987,191–
2,987,191
796,000

Profit (thousands of yen)Amounts not attributable to ordinary unitholders (thousands of yen)
Profit attributable to ordinary investment units (thousands of yen)
Average number of units during the fiscal period (units)(Notes to significant subsequent events)
No relevant items.

[Related information]
38th fiscal period (from March 1, 2023 to August 31, 2023)(1) Information by product and service

FUKUOKA REIT CORPORATION

45

128,102
3,806

FUKUOKA REIT CORPORATION

46

3,030,221–
3,030,221
796,000

X. Supplementary Schedules

X. Supplementary Schedules(Schedule of securities)(Schedule of investment corporation bonds)

Not applicable.
Issue(Schedule of contract amount, etc. and fair value of derivative transactions
andforward exchange transactions)(thousands of yen)
Category

Type(Note 1)

Interest rate swap transaction
Receivable floating; Payable fixed

Off-market transaction

Contract amount, etc.
Of which, exceeding 1 year

16,700,000

Total

16,700,000

380,713

16,700,000

Buildings
Structures
Machine and equipment
Tools and fixtures
Land
Buildings in trust

Balance as ofAccumulated Depreciation
February 29,
depreciation for the period2024
2,012,675
119,317
25,39324,857
1,431
264
0
–
–
3,513
806
141
1,684,370––

Net property
andRemarks
equipment
1,893,357
23,4250
2,706
1,684,370

357
–
–
1,942
–

–
–
–
–
–

106,613,034

7,191,217

382,137

113,422,114

41,778,221

1,500,678

71,643,893(Note 1)
(Note 2)

Structures in trust
Total
property,plant and Machinery and equipment
equipment in trust
Vehicles and transport
equipment in trust
Tools and fixtures in trust

1,977,417

14,832

9,217

1,983,032

964,144

28,847

1,018,887(Note 1)
(Note 2)

1,522,289

80,032–

1,602,321

853,366

34,586748,954(Note 1)

626

–

–

626

594

–

31

1,489,624

18,1077,077

1,500,654

1,261,849

17,210238,805(Note 2)Land in trust

113,622,069

7,821,484

427,331

121,016,223––

121,016,223(Note 1)
(Note 2)

9,186

9,773

3,075

15,885––

15,885228,957,366
5,545,883

15,137,746–

828,838–

243,266,274
5,545,883

44,979,733–

1,607,122–

198,286,541
5,545,883

71,136

1,323–

72,45970,747

2,139

1,711

5,617,019
234,574,385

1,323
15,139,069–
828,838

5,618,342
248,884,616

70,74745,050,480

2,139
1,609,261

5,547,594
203,834,136

Construction in progressin trust
Subtotal
Leasehold right in trust
Total
Other intangible assets inintangible
trust
assetsSubtotal
Total

Decreaseduring the
fiscal period

Balance as ofFebruary 29,
2024(thousands of yen)(thousands of yen)(thousands of yen)

2,000,000

2,000,000–

December 30,
2013
July 31, 2017
July 31, 2018

Total

2,000,000
1,000,000
5,000,000––
2,000,000

Coupon(%)

Maturity date

Maturity
methodUse

Description

1.32

December 29,
2023

Lump-sumupon maturity

Repayment ofdebt

No collateral/
No guarantee

July 30,2032

Lump-sumupon maturity

Repayment ofdebt

No collateral/
No guarantee

July 30,
2038

Lump-sumupon maturity

Repayment ofdebt

No collateral/
No guarantee

2,000,000
1,000,000

1.00
1.20

(Note 1)

(Note 2)

(Note 2)(thousands of yen)
Category
Investment corporation bonds

Due in 1 year or less–

1 to 2 years–

2 to 3 years–(Schedule of other specified assets)
Not applicable.

47(Note 1)

(Note 2)3,000,000(Note 1) The main increase in the 39th fiscal period is due to the acquisition of Hakata FD Business Center.
(Note 2) The main decrease in the 39th fiscal period is due to the disposition of Kurume Higashi Kushiwara SC (30% co-ownership interest).

FUKUOKA REIT CORPORATION(Note 1)(thousands of yen)
Decrease

Balance as of
September 1,
2023(Note 1) The bonds may be repurchased and cancelled by FRC at any time on and after the date following the payment date, unless otherwise determined by the book-entry transfer agent.
(Note 2) The bonds are subject to the limited pari passu clause among specified investment corporation bonds.
(Note 3) Amount of redemption of investment corporation bonds scheduled to be due within 5 years after period end.


Increase

Third Series ofUnsecured Bonds

380,713(Schedule of property, plant and equipment, and intangible assets)
Balance as of
September 1,
2023
2,012,318
24,8570
1,571
1,684,370

Second Series ofUnsecured Bonds(Note 2)

(Note 1) The contract amount, etc. of the interest rate swap transaction is based on the notional principal amount.
(Note 2) The fair value is calculated by the counterparty of the transaction contract based on the actual interest rate on the market and other factors.

Type of asset

First Series ofUnsecured Bonds

Fair value

16,700,000

Issue date

FUKUOKA REIT CORPORATION

48

3 to 4 years–

4 to 5 years–

X. Supplementary Schedules

X. Supplementary Schedules(Scheduleof debt)
(thousands of yen)

Category
LenderBalance as of
September 1,
2023

Increase

Decrease

Balance as of Average
February 29, interest rate(%) (Note 1)
2024–

4,583,333

4,583,333–

The Bank of Fukuoka(Note 2)

Resona Bank

(Note 2)–916,666

916,666–

The Nishi-Nippon City Bank

(Note 2)–

4,928,571

4,928,571–

Resona Bank

(Note 2)–690,000

690,000–

The Bank of Nagasaki(Note 2)–492,857

492,857–

The Oita Bank

(Note 2)–492,857

492,857–

The Bank of Saga

(Note 2)–295,714295,714–The Bank of Fukuoka(Note 2)–2,916,666

2,916,666–

Resona Bank

(Note 2)–

583,333

583,333–

The Nishi-Nippon City Bank

(Note 2)–

1,428,571

1,428,571–

Resona Bank

(Note 2)–200,000

200,000–

The Bank of Nagasaki(Note 2)–

142,857

142,857–

The Oita Bank

(Note 2)–

142,857

142,857–(Note 2)–85,71485,714–(Note 2)–750,000

750,000–

Resona Bank

(Note 2)–150,000

150,000–

The Nishi-Nippon City Bank

(Note 2)–785,714785,714–

Resona Bank

(Note 2)–110,000

110,000–

Short-term The Bank of Saga
debt
The Bank of Fukuoka

0.416

0.416

0.415

0.415

Repayment
date

Use offunds

Description

September 29,
2023

Acquisition fundNo collateral/
No guarantee

September 29,
2023

Acquisition fundOctober 31, 2023 Acquisition fundOctober 31, 2023 Acquisition fund

0.415

January 31, 2024 Acquisition fund

(Note 2)–78,571

78,571–The Oita Bank

(Note 2)–78,571

78,571–The Bank of Saga

(Note 2)–

47,142

47,142–The Bank of Fukuoka(Note 2)–750,000

750,000–

Resona Bank

(Note 2)–150,000

150,000–

The Nishi-Nippon City Bank

(Note 2)–785,714785,714–

Resona Bank

(Note 2)–110,000

110,000–

The Bank of Nagasaki(Note 2)–78,571

78,571–The Oita Bank

(Note 2)–78,571

78,571–The Bank of Saga

(Note 2)–

47,142

47,142–

Subtotal–

21,900,000

21,900,000–

The Bank of Fukuoka

2,000,000–

2,000,000

–

0.420

February 29, 2024 Refinance fund

The Nishi-Nippon City Bank

2,000,000–

2,000,000

–

0.442

February 29, 2024 Refinance fund

500,000–

500,000–

0.440

February 29, 2024 Refinance fund

700,000––

700,000

0.400–

2,000,000–

2,000,000

0.620

5,200,000

2,000,000

4,500,000

2,700,000

Development Bank of Japan

2,000,000–

2,000,000

–

0.620

Sumitomo Mitsui Trust Bank

300,000––

300,000

0.418

Long-term Development Bank of Japan
debt
The Oita Bank

1,500,000––

1,500,000

100,000––

100,000

The Kagoshima Bank

100,000––

100,000

The Kitakyushu Bank

100,000––

100,000

Subtotal

FUKUOKA REIT CORPORATION49

No collateral/
No guarantee

No collateral/
No guarantee

Increase

Decrease

The Juhachi-Shinwa Bank

200,000––

200,000

The Hiroshima Bank

100,000––

100,000

The Bank of Fukuoka

1,500,000––

MUFG Bank

800,000–

Resona Bank

600,000

The Higo Bank

Lender

0.415

0.414

0.414

0.718

January 31, 2024 Acquisition fundFebruary 29, 2024 Acquisition fundFebruary 29, 2024 Acquisition fund

July 31, 2024

Refinance fundFebruary 28, 2025 Refinance fundFebruary 28, 2025 Refinance fund
September 30,
2025

Refinance fundDecember 30, 2025 Refinance fundNo collateral/
No guarantee

No collateral/
No guarantee

No collateral/
No guarantee

No collateral/
No guarantee

No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee

No collateral/
No guarantee
No collateral/
No guarantee

No collateral/
No guarantee

Balance as of Average
February 29, interest rate(%) (Note 1)
2024

Repayment
date

Use of
funds

0.718

December 30, 2025 Refinance fund

1,500,000

0.424

December 30, 2026 Refinance fund–

800,000

0.481

March 31, 2025

Refinance fund––

600,000

0.658

March 31, 2027

Refinance fund

300,000––

300,000

0.481

March 31, 2025

Refinance fund

The Bank of Fukuoka

1,300,000––

1,300,000

The Nishi-Nippon City Bank

1,000,000––

1,000,000

The Oita Bank

700,000––

700,000

The Kitakyushu Bank

700,000––

700,000

0.777

June 30, 2026

Refinance fund

The Miyazaki Bank

700,000––

700,000

1,100,000––

1,100,000

500,000––

500,000

Development Bank of Japan

1,800,000––

1,800,000

0.650

The Bank of Fukuoka

2,000,000––

2,000,000

0.792

July 31, 2027

Refinance fund

The Nishi-Nippon City Bank

2,000,000––

2,000,000

0.892

July 31, 2027

Refinance fund

The Nishi-Nippon City Bank

500,000––

500,000

The Bank of Fukuoka

500,000––

500,000

100,000––

100,000

100,000––

100,000

0.850

August 31, 2027

Refinance fund

200,000––

200,000

100,000––

100,000

Resona Bank

2,000,000––

2,000,000

0.493

September 30,
2027

Refinance fund

The Bank of Fukuoka

1,500,000––

1,500,000

0.812

December 30, 2027 Refinance fundDevelopment Bank of Japan

500,000––

500,000

0.680

December 30, 2027 Refinance fund

The Nishi-Nippon City Bank

1,900,000––

1,900,000

0.750

February 29, 2028 Refinance fund

Sumitomo Mitsui Trust Bank

1,100,000––

1,100,000

0.600

February 26, 2027 Refinance fund

MUFG Bank

1,500,000––

1,500,000

0.500

February 27, 2026 Refinance fundResona Bank

600,000––

600,000

0.567

February 29, 2028 Refinance fund

2,500,000––

2,500,000

0.720

March 1, 2028

Acquisition fund

MUFG Bank

600,000––

600,000

0.480

March 31, 2026

Refinance fund

The Nishi-Nippon City Bank

600,000––

600,000

0.802

March 31, 2028

Refinance fund

The Bank of Fukuoka

500,000––

500,000

0.802

March 31, 2028

Refinance fundMizuho Bank

500,000––

500,000

0.630

March 31, 2028

Refinance fund

Sumitomo Mitsui Banking Corporation

500,000––

500,000

0.504

March 31, 2025

Refinance fund

MUFG Bank

500,000––

500,000

0.490

March 31, 2027

Refinance fund

Sumitomo Mitsui Trust Bank

400,000––

400,000

0.576

March 31, 2027

Refinance fund

The Oita Bank

400,000––

400,000

0.646

March 31, 2028

Refinance fund

The Hiroshima Bank

400,000––

400,000

0.646

March 31, 2028

Refinance fund

The Juhachi-Shinwa BankThe Iyo Bank

The Bank of Nagasaki

Current
maturities Mizuho Bankof long- SBI Shinsei Bank
term debt
Development Bank of Japan

No collateral/
No guarantee

Balance as of
September 1,
2023

Category

The Oita Bank
Long-term
The Kitakyushu Bank
debt
The Juhachi-Shinwa Bank
The Hiroshima Bank

Development Bank of JapanFUKUOKA REIT CORPORATION

50

December 31, 2026 Refinance fundDescription
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee

No collateral/
No guarantee

No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee

No collateral/
No guarantee

No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee

X. Supplementary Schedules

X. Supplementary Schedules

Balance as of
September 1,
2023

Increase

Decrease

SBI Shinsei Bank

300,000––

300,000

Sumitomo Mitsui Banking Corporation

500,000––

MUFG Bank

500,000–

The Nishi-Nippon City Bank

400,000

The Bank of Fukuoka

Category

Balance as of Average
February 29, interest rate(%) (Note 1)
2024

Repayment
date

Use of
funds

0.400

March 31, 2025

Refinance fund

500,000

0.655

January 31, 2029

Refinance fund–

500,000

0.590

January 31, 2028

Refinance fund––

400,000

0.422

January 31, 2029

Refinance fund

300,000––

300,000

0.422

January 31, 2029

Refinance fund

The Oita Bank

200,000––

200,000

0.334

February 27, 2026 Refinance fund

The Kagoshima Bank

200,000––

200,000

0.334

February 27, 2026 Refinance fund

The Higo Bank

200,000––

200,000

0.334

February 27, 2026 Refinance fundResona Bank

200,000––

200,000

0.488

February 28, 2029 Refinance fundMizuho Bank

1,200,000––

1,200,000

LenderThe Bank of Saga

500,000––

500,000

The Higo Bank

500,000––

500,000

1,500,000––

1,500,000

The Norinchukin BankMUFG Bank

0.521

July 31, 2029

Refinance fund

0.303

January 29, 2027

Refinance fund

September 29,
2028

Refinance fund

500,000––

500,000

0.480

The Nishi-Nippon City Bank

2,500,000––

2,500,000

0.480

February 28, 2030 Refinance fundMizuho Bank

1,700,000––

1,700,000

0.420

February 28, 2030 Refinance fundAozora Bank

1,000,000––

1,000,000

0.569

June 28, 2030

Refinance fundResona Bank

700,000––

700,000

0.569

June 28, 2030

Acquisition fund

500,000––

500,000

0.600

June 29, 2029

Acquisition fund

500,000––

500,000

0.465

June 30, 2028

Acquisition fundDevelopment Bank of Japan

1,500,000––

1,500,000

0.530

July 31, 2030

Refinance fundMizuho Bank

1,000,000––

1,000,000

0.470

July 31, 2030

Refinance fund

The Kitakyushu Bank

500,000––

500,000

0.526

July 31, 2030

Refinance fund

The Iyo Bank

200,000––

200,000

0.526

July 31, 2030

Refinance fund

The Juhachi-Shinwa Bank

1,000,000––

1,000,000

0.590

March 31, 2031

Refinance fundMizuho Bank

2,300,000––

2,300,000

The Hiroshima Bank

1,400,000––

1,400,000

Long-term MUFG Bank
debt
The Kagoshima Bank

The Kitakyushu Bank

800,000––

800,000

The Iyo Bank

500,000––

500,000

The Higo Bank

300,000––

300,000

Mizuho Trust & Banking Co., Ltd.

1,000,000––

Sumitomo Mitsui Banking Corporation

1,600,000–

Development Bank of Japan

4,000,000

The Nishi-Nippon City Bank

500,000

The Bank of Fukuoka

400,000

The Higo Bank

0.490

July 31, 2031

Refinance fund

1,000,000

0.374

March 31, 2032

Refinance fund–

1,600,000

0.726

June 29, 2029

Refinance fund––4,000,000––

500,000

0.919

August 31, 2032

Refinance fund––

400,000

700,000––

700,000

0.615

March 31, 2028

Acquisition fund

The Higo Bank

750,000––

750,000

0.375

March 31, 2033

Acquisition fund

The Hiroshima Bank

500,000––

500,000

0.541

June 29, 2029

Refinance fund

The Hiroshima Bank

1,000,000––

1,000,000

0.635

June 28, 2030

Refinance fund

FUKUOKA REIT CORPORATION

51(Note 3)

Description
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee

No collateral/
No guarantee

No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee

No collateral/
No guarantee

Balance as of
September 1,
2023

Increase

Decrease

Sumitomo Mitsui Trust Bank

900,000––

900,000

Sumitomo Mitsui Trust Bank

600,000––

Development Bank of Japan

2,000,000–

Development Bank of Japan

2,000,000

The Nishi-Nippon City Bank

Category

Balance as of Average
February 29, interest rate(%) (Note 1)
2024

Repayment
date

Use of
funds

0.501

July 31, 2028

Refinance fund

600,000

0.829

July 31, 2031

Refinance fund–

2,000,000

0.838

August 31, 2029

Refinance fund––

2,000,000

0.907

February 28, 2030 Refinance fund–

2,000,000–

2,000,000

0.919

The Nishi-Nippon City Bank–

1,900,000–

1,900,000

1.015

The Nishi-Nippon City Bank–

1,000,000–

1,000,000

1.189

SBI Shinsei Bank–

600,000–

600,000

0.767

The Higo Bank
Long-term
The Iyo Bank
debt
The Kagoshima Bank–

600,000–

600,000

0.767–

500,000–

500,000

0.767–

300,000–

300,000

0.767

September 30,
2030
September 30,
2031
September 30,
2033
September 29,
2028
September 29,
2028
September 29,
2028
September 29,
2028

The Bank of Fukuoka–

2,500,000–

2,500,000

0.323

October 31, 2031

Refinance fund

MUFG Bank–

1,000,000–

1,000,000

1.203

October 31, 2030

Refinance fund

Sumitomo Mitsui Banking Corporation–

1,000,000–

1,000,000

1.203

October 31, 2030

Refinance fundMizuho Bank–

1,000,000–

1,000,000

1.249

October 31, 2031

Refinance fund

The Nishi-Nippon City Bank–

1,000,000–

1,000,000

0.889

February 28, 2031 Refinance fund

The Nishi-Nippon City Bank–

1,000,000–

1,000,000

1.070

February 28, 2033 Refinance fund

The Bank of Fukuoka–

1,000,000–

1,000,000

0.331

February 28, 2031 Refinance fund

The Bank of Fukuoka–

1,000,000–

1,000,000

0.371

February 28, 2033 Refinance fund

Subtotal

76,250,000

16,400,000

2,000,000

90,650,000

81,450,000

40,300,000

28,400,000

93,350,000

LenderTotal

Refinance fund
Refinance fund
Refinance fund
Refinance fund
Refinance fund
Refinance fund
Refinance fundDescription
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee(Note 1) The average interest rate is a weighted-average figure during the fiscal period and is rounded to the third decimal place. Furthermore, the average interest rate of debt for which FRC conducted interest
rate swap transactions is the weighted-average figure during the fiscal period taking into consideration the effect of interest rate swaps.
(Note 2) The borrowing is based on the commitment line agreement.
(Note 3) The borrowing is a Sustainability-Linked Loan in which it has been set as a Sustainability Performance Target (SPT) to reduce CO2 emissions (in terms of intensity) by 35% compared with fiscal 2019 by
February 28, 2031, and the achievement of the target is linked to the loan conditions. When the SPT is achieved, the contract will offer a preferential treatment for the interest rate determined at thetime of borrowing, for the period from August 2031 to the repayment date.
(Note 4) Amount of repayment of long-term debt scheduled to be due within 5 years after period end.

(thousands of yen)

Category
Long-term debt

1 to 2 years
6,400,000

2 to 3 years
12,500,000

3 to 4 years
14,000,000

4 to 5 years
10,900,000

No collateral/
No guarantee
No collateral/
No guarantee

No collateral/
No guarantee

No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee

FUKUOKA REIT CORPORATION

52