ESG Initiatives （Environment）
Environment Initiatives in the 32nd fiscal period■Canal City Hakata
Grand Hyatt Fukuoka

Canal City Hakata （North building side）●Renewal of rooftop greening●Replacement and new installation of water stops

Renewed the rooftop garden used as a venue for the guests torelax and talk, with an aim to enhance biodiversity by planting
tall and mid-height trees, shrubs and ground covers, etc. ofvarious species.

Reviewed the specifications and installation locations ofexisting water stops throughout Canal City Hakata, andn e w l y i n s t a l l e d o r r e p a i r e d t h e e qui p m e n t a s a
countermeasure against river floods due to t yphoons
and local heavy rains, which are said to be frequent andsevere global warming in the future.

Other Environment Initiatives

Canal City Business Center Building

In contrast to the existing water stopsof +50 cm from the standard level, （＊）
the new water stops are +100 cm
from the standard level, enhancing
the anti-inundation function,

Canal City Hakata （South building side）（＊） The reference point is "0" for the entrance and exit closest to the lowest road in the vicinity of Canal City Hakata.

■Office buildings■Others [Logistics]●Filtration System : rainwater reuse system◎Progress with switch to LED lighting◎Utilization of renewable energy◎ Canal City Hakata

Switch to LED lighting
Gofukumachi Business Center

Solar panels have been installed on the roofsof LOGICITY Minato Kashii and LOGICITY
Hisayama.

■RetailC anal Ci t y Hak a t a’ s s y mb o lic c anal ha s b o t h arecreational function and as a source of water to fightfires in the case of an emergency. At all times, this canalholds roughly 1,200 tons of water, and this water uses
rainwater in order to conserve resources.

●Greywater plant:●（Interior shared spaces, some external areas, etc.）●Sanix Hakata Building●Taihaku Street Business Center

Solar panels（Interior recessed lighting）（Entrance, interior shared spaces, etc.）

kitchen drainage reuse system◎ Canal City Hakata and Konoha Mall Hashimoto
the kitchen drainage from restaurants are processed togreywater and re-used as washing water for toilets
within the buildings.

＊Example of Sanix Hakata Building

LOGICITY Hisayama

ESG Initiatives （Society）
Initiatives for employees and tenants■Retail■Office buildings■Initiatives for employees●Major anti-infection measures●Major anti-infection measures●Major anti-infection measures

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Install alcohol disinfectants and anti-splash screens
Call for attention to social distancing
Conduct thorough health management of tenants’ employees
by taking their temperature, etc.
Reduce chair and table counts in common areas●●●

Install alcohol disinfectants at the entrance
Strengthen ventilation in common areas, etc.
Post warnings about anti-infection measures in elevators●●●●

Support for tenants（restaurant/eatery）

Posters for infection
control measures●Lunch box market

Raise awareness of theinfection control measuresby displaying posters inelevators, etc.

Canal City Hakata restaurants
sell take-out lunch boxes only
on weekdays.

Establish a satellite office （in Tenjin chuo-ward, Fukuoka）
Implement work from home, staggered work
hours and holiday work
Distribute masks and thermometers
Conduct morning assemblies and meetings
using the Internet, etc.

Install anti-splash screens and antiseptic solutions,etc. at offices and reception desks（6/22-7/17, 9/28-10/9）

Fukuoka Realty Reception《Fukuoka Realty: Numbers of credentialed personnel》（As of August 31, 2020）《Support for flexible working styles》●■The average number of years of continuous serviceof permanent employees: 8 years and 10 months●●■Full-time personnel: 41 [Male:20 Female:21] ※51.2％ Female●●

Employees seconded from sponsors：2
Employees seconded to a sponsor：4

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Real estate brokers : 26

Certified Building Administrators : 5

First-class registered architect : 2
Real estate appraisers : 2

ARES Certified Masters : 23

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《Training for employees》
Regular lectures by Kyushu Economic Research Center
Compliance training● ESG training● Nursing care training● In-house recreation, etc.
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《Career development support》■Number of credentialed personnel●●

Child-rearing support（maternity leave,childcare leave system）
Nursing care leave
Leave for voluntary work
No overtime days
Employee welfare（401K, cumulative
investment system, etc.）
Encouraging use of paid holidays, etc.

Attorneys : 1

MBA : 1

Administrative Scrivener : 1

SME management consultant : 1●●●●●

Employee satisfaction survey
Self-assessment system
Career interview
Secondment system（dispatching of employees
to sponsor companies）
Promotion from contract employee topermanent employee status, etc.

Offering of training programs tailored to eachmanagement level
System for supporting acquisition of qualifications（Real Estate Securitization Master, Real EstateTransaction Agent, etc.）
Support for language learning, etc.

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ESG Initiatives （Governance）
Matching unitholder interests and sponsor interests, etc.

Governance System
Fukuoka Realty has established a Basic Policy on Compliance, as well as compliance regulations
and other internal rules to prevent c onf licts of interest. We c onduct c onf lict of interest risk
management pertaining to our dealings with stakeholders in an appropriate manner based on theabovementioned rules and regulations with preliminary assessment carried out by the ComplianceDepar tment general manager and deliberations c onduc ted by the Complianc e Assessment
Committee (consisting of the Compliance Department general manager and three outside experts).

◎Decision-making process
Proposals by responsible department

Third-party assessment
by external experts［Real estate appraisals］

Inspection by Compliance Department
general manager

Deliberations by the Investment
Management Committee■ Japan Real Estate Institute■ The Tanizawa Sogo Appraisal Co., Ltd.

■ Daiwa Real Estate Appraisal Co., Ltd.

■ Analysis on trade areas andcompetition situation

Fukuoka REIT Corporation Boardof Executive Officers

Changes to the asset management fee structure
The Management Fees 1 and 3 were reviewed for the purpose of further reinforcing
the linkage between unitholder interest and the asset management fee structure, andthe following changes were resolved at the ninth General Meeting of Unitholders heldon May 26, 2020 for further enhancing unitholder value. The changes became
effective on September 1, 2020 （beginning of the 33rd fiscal period）
Asset management fees

Management Fee 1（based on total assets）[Engineering reports]■ Law abidance andearthquake resistance

Resolution/decision-making report
by Board of Directors

Fukuoka Jisho Co., Ltd., the main sponsor, has 9.18% of FRC’ s investment units
as of the end of the 32nd fiscal period.
・ Cumulative investment system for investment units
A cumulative investment system for investment units was introduced for the AssetManager officers and employees in April 2015 in order to enhance their mindset for FRC’ sinvestment unit price and better performance as well as promote their assets formation.

［Market reports］■ Adequate rent levels, etc.

Deliberations/resolution
by the Compliance Assessment Committee

・ Same-boat investment by sponsor■ Check of soil contamination,
toxic substance and use status■ Replacement market price,
expenses for long-term maintenanceand repairs, etc.

（＊） The prior consent of the investment corporation’ s Board of Directors is obtained in cases falling under the provisions of Article 201-2 (1)of the Act on Investment Trusts and Investment Corporations.

Management Fee 2

Calculation method【3 months from the day following the last day of the immediately preceding fiscal period】
Total assets at the end of the immediately preceding fiscal period
× 0.25%（previously 0.3%）× number of days / 365【From the day following the last day of the period above to the end of the fiscal period】（Total assets at the end of the immediately preceding fiscal period +value of acquired assets - value of disposed assets）
× 0.25%（previously 0.3%）× number of days / 365（based on operating revenue）

Operating revenue for the immediately preceding fiscal period × 2.0%

Management Fee 3（Distributable amount before paying Management Fee 3
for the immediately preceding fiscal period）× 3.6%（previously 2.0%）

Management Fee 4

Value of acquired assets × 0.5%
（Value of acquired assets × 0.25% in the case of acquisition from interested parties）

Management Fee 5

Value of transferred assets × 0.5%
（Value of transferred assets × 0.25% in the case of transfer to interested parties）（based on distributable profit）（acquisition fee）

（transfer fee）