34th Fiscal Period
Report on Performance andManagement Status (Semiannual Report)

Security Code 8968

March 1, 2021 to August 31, 2021

Fukuoka REIT
Corporation

8968

I. Overview of Fukuoka REIT Corporation

I. Overview of Fukuoka REIT Corporation
To Our Unitholders

ProfileStatus 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 and management status of FRC for the thirty-fourth fiscal period (March 1, 2021
to August 31, 2021).
FRC was listed in June 2005 and started as Japan’s first REIT specializing in regional properties. Since then, we have exhibited consistent growth and achieved stable performance through the support ofour unitholders and sponsor companies.
During the fiscal period under review (the 34th fiscal period), theJapanese economy continued to show a pickup trend amid a severe
situation still persisting under the impact of the novel coronavirus(COVID-19) infection. As for the outlook, with measures taken to prevent the spread of infection and vaccination promoted, the economy
is expected to keep picking up due in part to the effects of various
political measures and improvements in overseas economies. Attention should be paid, however, to the impact the infection trend willpose on the economy both in and outside Japan and the influence ofchanges in the financial and capital markets, etc.
In the Fukuoka and Kyushu area, the core investment target area for
FRC, the economy is picking up, centering around exports and production, although staying in a severe situation. While public spending
remains at a high level, the pickup trend in consumer spending hascome to a temporary pause, and supply-and-demand conditions forlabor and compensation of employees are both on a weak note.
Under such circumstances, FRC’s portfolio achieved solid performance in the asset types of office buildings, logistics facilities, andresidential properties. On the other hand, the impact of the spread of
COVID-19 was not contained at Canal City Hakata and other major
retail properties, while hotels failed to recover as tourism demand,
etc. did not return strongly.
Against such a backdrop, from a perspective of dispersing risks
through diversification of the portfolio, FRC disposed Canal City
Hakata·B Grand Building (88.28% co-ownership interest) and acquired Tenjin Nishi-Dori Business Center (Land with leasehold interest) on June 1, 2021, and resolved on August 30, 2021 to acquire
Hakata Chikushi-Dori Center Building as of March 1, 2022. We will
aim to achieve an asset size of 250.0 billion yen as the next target,
while continuing to reconsider the portfolio as a REIT with compre-

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
Etsuo Matsuyuki

Zenji Koike

Executive Director
Fukuoka REIT Corporation

President and CEO
Fukuoka Realty Co., Ltd.

hensive asset types specializing in regional properties. We will also
continue to flexibly investigate property replacement and other measures when there are favorable opportunities.
Occupancy remained solid, with the average period-end occupancy rate of all properties FRC owns standing at 99.5%. FRC posted
operating revenues of 8,867 million yen, operating income of 3,204
million yen, ordinary income of 2,817 million yen, and profit of 2,816
million yen for the fiscal period under review. The dividend per unit
came to 3,539 yen. The actual dividend per unit for the period represents an increase by 178 yen from the previous fiscal period and by
39 yen from the dividend forecast at the time of the announcement of
the financial results for the 33rd fiscal period. The increase was attained as our retail properties that serve people’s daily needs performed solidly; upward revision of rents for office buildings wasachieved while keeping them at high occupancy; the property disposal generated gain on sale; and our continuous efforts to reduce
costs including administration and operation expenses paid off.
Looking ahead, we will keep endeavoring to maintain and increase
dividends in a stable manner by acquiring excellent properties to generate stable cash flows and continuously taking strategic initiatives.
Going forward, FRC will continue to exert its strengths as a REIT
specializing in regional properties and quickly respond to market
changes while receiving support and cooperation from powerful sponsors leading the Kyushu business world. We will also strive to maintainand increase the level of dividend per unit through steady asset management. We at FRC are resolved to make the utmost efforts to pursue our mission of securing stable earnings over the medium to longterm and continuously offering stable dividends into the future, basedon our management philosophy of “Act Local, Think Global.”
We greatly appreciate your continued support and cooperation.

Name: Fukuoka REIT Corporation
Representative: Etsuo Matsuyuki, Executive Director
Asset manager: Fukuoka Realty Co., Ltd. (Fukuoka Local Finance Branch Bureau (financial instruments) No. 10)

SponsorsW

FUKUOKA REIT CORPORATION

1Profile1988	Joined Fukuoka SOGO Bank (currently The
Nishi-Nippon City Bank, Ltd.)
1991 Joined Fukuoka Jisho Co., Ltd.
2013	Appointed as Chairman of Canal Entertainment Works Co., Ltd. (currently FJ Entertainment Works Co., Ltd.)2017	Appointed as Senior Executive Officer of
Fukuoka Jisho Co., Ltd.
2017	Appointed as Chairman of Sunlife Co., Ltd.
2021 Current position since June
Born in Fukuoka City. Likes to run in marathonsand play golf. Joins citizen’s marathon races twiceor three times a year.

5%5%

THE BANK OFFUKUOKA, LTD.

THE NISHI-NIPPON CITY BANK, LTD.

Development Bank of Japan Inc.

Director

Fukuoka Realty Co., Ltd.

FUKUOKA JISHO
CO., LTD. (Note)(Note ) Concluded MOU
with Fukuoka REIT
Corporation andFukuoka Realty Co.,
Ltd. concerning
pipeline support.

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

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

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

Portfolio *Figures are based on properties owned as of August 31, 2021.
Investment type (based on acquisition price)
Retailstrengths as a “REIT specializing in regional
properties” by taking advantage of our information ability and know-how based on ourfull knowledge of the Fukuoka and Kyushu
area. As we do so, we will quickly respond tomarket changes while endeavoring to secure
medium- to long-term growth of the portfolioand stable earnings through solid and steadymanagement of FRC’s assets. We greatly appreciate your continued support and cooperation.

5%

55%

Greetings from the President and CEO of the Asset Manager
e would like to express our sincere
gratitude to all unitholders for your continued support of Fukuoka Realty Co., Ltd.
I took office as President and CEO of Fukuoka Realty as of June 24, 2021.
As Fukuoka REIT Corporation (FRC) closed
its accounts for the 34th fiscal period ended
August 31, 2021, I would like to express our
sincere appreciation for the strong support
and loyal patronage to FRC.
We will keep working to exert FRC’s: June 21, 2005 (Tokyo Stock Exchange, and Fukuoka Stock Exchange)

Listed date

54.2%

Investment area (based on acquisition price)

Office buildings Others

Total leasable floor space

31.5%

14.3%

572,215.71 m2

Fukuoka metropolitan area

76.6%

Occupancy rate at end of period

Other
Kyushu areas

23.4%

99.5%

CONTENTS
I.

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
New Property Acquisition and Asset Replacement ....................................................................... 7
Initiatives on Sustainability ............................................................................................................. 8

II. Semiannual Report ............................................................................................................... 9III. Independent Auditor's Report ...................................................................................... 26
IV. Balance Sheet ....................................................................................................................... 28
V. Statement of Income ......................................................................................................... 30
VI. Statement of Changes in Net Assets ........................................................................ 31
VII. Cash Flow Statement ........................................................................................................ 32
VIII. Notes to Financial Statements ..................................................................................... 33

FUKUOKA REIT CORPORATION

2

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 surpassed 200 billion yen to reach 202.0 billion yen (on an acquisition price basis) in the 32nd fiscal period. FRC aims
Retail (left axis)(mm yen)

Office buildings (left axis)

Residence (left axis)

Logistics (left axis)

Listingto achieve 250.0 billion yen as the next target, while working to dissipate risks by diversifying the investment types.

Hotels (left axis)

Number of investment properties (right axis)

2.1% (properties)
40

200,000

7.8%

Acquired from sponsor

16

150,000

32

4.1%

Sponsor

64.7%

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.

130,690

As of
Other thanmillion yen
sponsor August 31, 2021

35.3%

202,019

71,32931

million yen

million yen

23
100,000

19

15

15

16

16

16

16

17

24

23

27

28

27

25

25

26

29

29

29

33.0%

26

20

20

17

11

11

33
30

27

14

31

32

53.0%
10

50,000

7

8

5

0

2nd

3rd

4th

5th

6th

7th

8th

9th

10th

11th

12th

13th

14th

15th

16th

17th

18th

(Aug. 2005) (Feb. 2006) (Aug. 2006) (Feb. 2007) (Aug. 2007) (Feb. 2008) (Aug. 2008) (Feb. 2009) (Aug. 2009) (Feb. 2010) (Aug. 2010) (Feb. 2011) (Aug. 2011) (Feb. 2012) (Aug. 2012) (Feb. 2013) (Aug. 2013) inancial Highlights for 34th Fiscal Period and Business Forecasts forF
35th and 36th Fiscal Periods
34th fiscal period

35th fiscal period

36th fiscal period(March 1, 2021 to August 31, 2021)(September 1, 2021 to February 28, 2022)(March 1, 2022 to August 31, 2022)

ActualForecast

Forecast

Operating revenues

mm yen

8,867

8,621

8,834

Leasing NOI (Note)

mm yen

5,336

5,316

5,382

Depreciation and amortization expenses

mm yen

1,552

1,489

1,527

Operating income

mm yen

3,204

3,156

3,169

Ordinary income

mm yen

2,817

2,787

2,787

Profitmm yen

2,816

2,786

2,786

Dividend per unityen (1)

3,539

–

–

Latest dividend forecast per unityen (2)

3,500

3,500

3,500

yen (1)-(2)

39

–

–

units

796,000

796,000

796,000

Difference from forecast
Total number of investment units outstanding(at end of period)

20th

21st

22nd

23rd

24th

25th

26th

27th

28th

29th

30th

31st

32nd

33rd

34th

Mar. 1, 2022

0(Feb. 2014) (Aug. 2014) (Feb. 2015) (Aug. 2015) (Feb. 2016) (Aug. 2016) (Feb. 2017) (Aug. 2017) (Feb. 2018) (Aug. 2018) (Feb. 2019) (Aug. 2019) (Feb. 2020) (Aug. 2020) (Feb. 2021) (Aug. 2021) (Expected)(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

Category

19th(Note) “Leasing NOI” is calculated using “Leasing business revenues − Expenses related to leasing business + Depreciation and amortization expenses.”
FUKUOKA REIT CORPORATION

3

Dividend Performance
Showing a recovery trend from the impact of COVID-19 in the 34th fiscal period, FRC will keep its endeavors to maintain andstabilize dividends.
34th fiscal period end

August 31, 2021 (semiannual periods ending every February and August)34th fiscal period days 184 days

34th fiscal period dividend 3,539 yen per unit

Dividend yield

4.0% {(Dividend / Days × 365) / Unit price (as of August 31, 2021)}(yen)

4,000 3,802

3,687 3,726

3,468

3,672 3,699 3,674 3,609

3,475 3,479

3,356 3,293 3,384 3,324

3,238 3,257 3,291 3,243 3,278

3,435

3,563 3,574 3,479

3,398 3,422

3,512 3,593

3,687 3,693 3,642
3,250 3,361

3,539 3,500 3,500

3,000

2,000

1,000

0

2nd 3rd 4th

5th

6th

7th

8th

9th 10th 11th 12th 13th 14th 15th 16th 17th 18th 19th 20th 21st 22nd 23rd 24th 25th 26th 27th 28th 29th 30th 31st 32nd 33rd 34th 35th 36th

Aug. Feb. Aug. Feb. Aug. Feb. Aug. Feb. Aug. Feb. Aug. Feb. Aug. Feb. Aug. Feb. Aug. Feb. Aug. Feb. Aug. Feb. Aug. Feb. Aug. Feb. Aug. Feb. Aug. Feb. Aug. Feb. Aug. Feb. Aug.
[2005
] [2006] [2006] [2007] [2007] [2008] [2008] [2009] [2009] [2010] [2010] [2011] [2011] [2012] [2012] [2013] [2013] [2014] [2014] [2015] [2015] [2016] [2016] [2017] [2017] [2018] [2018] [2019] [2019] [2020] [2020] [2021] [2021] [2022] [2022]*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(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

3

Retail4

RetailRetailOthers25 (residence)

Others26 (residence)

27 Others(hotel)28 Others(hotel)Park Place Oita

SunLive City Kokura

D-Wing Tower

Granfore Yakuin Minami

Hotel FORZA Oita

Tissage Hotel Naha

One of the largest entertainment-type
retail facilities in Japan and comprising
United Cinemas and others

One of the largest entertainment-type
retail facilities in Japan and comprising
MUJI Canal City Hakata and others

A leading retail facility in the Oita area,
providing “park entertainment” for families

One of the largest malls in Kitakyushu andanchored by a SunLive supermarket
chosen by local consumers

A large, high-rise (20-story) rental
condominium, approximately a seven-minute walk from Tenjin subway station

A rental condominium in the Yakuin/Hirao
area that is popular among younger
generations and has plentiful bus networks

A business hotel located walking distancefrom Oita Station and specialized for
lodging to meet business needs

A hotel in Naha City, Okinawa Prefecture
located a 10-minute car ride from Naha
Airport. Guestrooms are of sufficient sizeand quality to take in leisure demand.

5

6

7

8

Others29 (logistics)

Others30 (logistics)

Others31 (logistics)

Others32 (logistics)

RetailCanal City Hakata·B

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

RetailRetailRetailKonoha Mall Hashimoto

Square Mall Kagoshima Usuki

Kumamoto Intercommunity SC

A community-based retail facility with SunLive
as its anchor tenant and directly connected to
Hashimoto Station via a pedestrian bridge

A retail facility in Kagoshima, designed byJohn Jerde who designed Canal City
Hakata and Roppongi Hills

Located along a major arterial road andcomprising Sports Depo, Golf 5 andStarbucks coffee

Located in a new residential area andcomprising BON REPAS supermarket
and Matsumoto Kiyoshi drug store

9

10 Retail11 Retail12 Office Building

RetailHanahata SC

Tosu Logistics Center

LOGICITY Minato Kashii

LOGICITY Hisayama

LOGICITY Wakamiya

A logistics facility located in the Green
Logistics Park Tosu, operating around theclock and with three temperature zones

A logistics facility among the largest in the
Fukuoka area, with a location featuring
traffic convenience and concentration ofsuch facilities

Approximately 5 km from the Fukuoka
Interchange featuring traffic convenience,and has good general-purpose capabilities

A logistics facility located in a leadingindustrial city of Fukuoka prefecture andcan conduct operations 24 hours a day as
well as frequent deliveries

Portfolio Map
Having a large floor area and tenanted byan electric appliance store widely
attracting customers from nearby cities

14 Office Building

Located east of Marinoa City Fukuoka
and has stable attractiveness throughsynergy with the Outlet building

An office building expected to exert
synergy with Canal City Hakata, withshowroom functions

15 Office Building

Saga

16 Office Building

31

30

Fukuoka
Metropolitan Area

32 4
29
9

Nagasaki

Island City,ay es w L in
resCit ypx daE no k sl aku 6 IF u u teRo

Fukuoka
Oita

27
3

e
Lin

13 Office Building

Canal City Business Center Building

24

7

Sa
ny
o

Kumamoto
MiyazakiFukuoka
Metropolitan
Area

Sh
in
ka
ns
en

Located on a corner of a heavy-trafficintersection and comprising Sports Depoand Golf 5

Marinoa City Fukuoka (Marina Side Building)ssway
Kyushu Expre

K’s Denki Kagoshima

ii
sh
Ka
JR

Kurume Higashi Kushiwara SC

3

Fukuoka IC

Kagoshima

Gofukumachi Business Center

Sanix Hakata Building

Taihaku Street Business Center

Higashi Hie Business Center

An office building facing major arterial
roads Meiji-dori Avenue and Taihaku-doriStreet, and directly connected to
Gofukumachi Station on the city subway

A highly-convenient, station-front officebuilding that is a two-minute walk from
Hakata Station

Good location along Taihaku-dori Street, a
two-minute walk from Gion subway stationand ten-minute walk from Hakata Station

Directly connected to Higashi Hie subway
station, a two-minute ride to Hakata Stationand three-minute ride to Fukuoka Airport

17 Office Building

18 Office Building

19 Office Building

20 Office Building

6
10

Higashi Hie Business Center II

Higashi Hie Business Center III

An office building facing Tenjin Nishi-doriStreet where commercial facilities areconcentrated

A highly convenient office building locatedin the Tenjin area that features Kyushu’s
largest integration of urban functions

Directly connected to Higashi Hie subway
station, a two-minute ride to Hakata
Station and highly recognized for its
excellent business continuity plan (BCP)

FRC’s third office building in the Higashi
Hie area, close to Higashi Hie subway
station and a two-minute ride to Hakata
Station

21 Office Building

Others23 (residence)

KyushuArea

28

Fukuoka Expressway,
Route 1 (Loop Line)

SubwayKuko Line

JR Sasaguri

13

FUKUOKA
PayPay DOME

18

22
25 21
17

19
Hakata
1
16
12
14 20
2
3

Ohori Park

202

23

Tenjin26
SubwayNanakumaLine

202

Others24 (residence)5

Fukuoka Airport(Land with leasehold interest)
Located along Meiji-dori Avenue, a long-standing business
district in the Tenjin area, as well as near Tenjin Nishi-DoriStreet where commercial facilities are concentrated

Amex Akasakamon Tower

City House Keyaki DoriA tower-type rental condominium near
downtown Fukuoka, with traffic convenience and environment that matches awide range of generations

A high-quality rental condominium in a
popular residential area of Fukuoka,
featuring traffic and living convenience

FUKUOKA REIT CORPORATION

5

Aqualia Chihaya
A rental condominium comprised of units
mainly for singles and small families tomatch the local characteristics

202

0

1km

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

(Hotels, Residence, Logistics and Other facilities)

8

FUKUOKA REIT CORPORATION

Investment area

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

385

Tenjin Nishi-Dori Business Center

Investment Policy
60 - 90%
10 - 30%

ine
aL
im
sh
go
Ka

202

Ni
sh
Omitetut su
a Te
Lin nj
e in

263

Line

15

JR

Others22 (residence)

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

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

Tenjin North Front Building

Hakata Bay

Okinawa

11

Tenjin Nishi-Dori Center Building

36

I. Overview of Fukuoka REIT Corporation

I. Overview of Fukuoka REIT Corporation

New Property Acquisition and Asset Replacement

Initiatives on Sustainability

New Property Acquisition Scheduled for the 36th Fiscal Period

Environment

On August 30, 2021, FRC issued a press release, announcing that it will acquire a property in March 2022.
New Property to be Acquired

External Evaluation
Participation in GRESB Assessment 2021

Hakata Chikushi-Dori Center Building

Granted “4 Stars” and “Green Star” assessments in the GRESB rating*Granted “3 Stars” and “Green Star” ratings in the GRESB 2020

100m

Su

Sanix
HakataBuilding

bw

ay

Ku
ko
FukuokaLi
nelocal government
officeHigashi Hie
Business Center II• Added measures (such as self-diagnosis of energy conservation and data collection) corresponding to the “performance components” that evaluates the owned properties in terms of their environmental performance and joint initiatives with tenants, etc.

Higashi Hie Sta.

• Increased the participation rate of ESG training sessions for employees (100% participation)us

About 8 min. walkhi

Hakata Station
East area

-d

or

iA

ve

ak
un
e
Av nb
en ashue i-diknue

Higashi Hie
Business
Center III

Society

Hy

Ch

or

i

JR HakataSta.

< Major initiatives >Higashi Hie
Business Center

COVID-19 Vaccination for Applicants

Hakata Chikushi-Dori
Center Building• Conducted vaccination for employees of the Asset Manager and tenants of retail facilities at a venue in Canal City Hakata

Overview of the property
Acquisition date (planned)

Point• Expected to achieve internal growth after acquisition

March 1, 2022

Acquisition price (planned) 4,320 mm yen
Appraisal value

4,540 mm yen

Location

2-5 Hakataeki-minami, Hakata Ward, Fukuoka City

Construction completed

January 1992

Total floor space

8,621.96 m²

Number of tenants

12

NOI yield (Note 1)

5.3% (assumed NOI yield for the 36th period: 3.9%)

Positive rent gap (Note 2)+33.9%• Located about an 8-minute walk from JR Hakata Station, in
the Hakata Station East area where hotels and government
offices are in close proximity• Highly competitive in the area, with a standard floor rentalroom area of over 240 tsubos

Anti-COVID-19 Measures• Installed thermographic monitors to measure temperature at the entrance of the Asset Manager and the entrances for tenants’
employees, etc.
• Conducted high-performance “antivirus and antibacterial” coating• Conducted ventilation by periodically keeping doorways open
• Installed disinfectants at doorways and toilets, etc.

(Note 1) The figure is calculated based on the NOI of the appraisal value.
(Note 2) Positive rent gap indicates the gap between current rent (contract rent with common charges) and market rent, and is calculated as “(market rent - current rent) / current rent”. The market rent used forthe calculation is the medium value of the assumed new contracted rents (including common charges) that are assessed by CBRE as of August 2021 and shown in a range.

Asset Replacement for the 34th Fiscal Period
In June 2021, FRC conducted asset replacement as scheduled.
•C apture the medium- to long-term growth potential of office buildings in the Tenjin area
Installation of thermographic monitors to measuretemperature•R educe the risk of having a full-service hotel that is subject to large impact of COVID-19
Acquired Property

Disposed Property

Sponsor support

Tenjin Nishi-DoriBusiness Center(Land with leasehold interest)

Asset
replacement

Canal City Hakata·B
Grand Building(88.28% co-ownershipinterest in Grand Building)Acquisition Price
7,700 mm yen

Disposition Price
Gain on sale
104 mm yen

FUKUOKA REIT CORPORATION

7,700 mm yen

7

Canal City Hakata·B
Grand Building

Antivirus and antibacterial coating

Notice of ventilation underway

Governance
Cumulative Investment System for Investment Units
40.5% of the officers and employees has participated in the system.
A cumulative investment system for investment units was introduced for the Asset Manager officers and employees in April 2015
in order to enhance their mindset for FRC’s better performance as well as promote their assets formation

FUKUOKA REIT CORPORATION

8

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 yen33rd fiscal period

34th fiscal period(March 1, 2020 toAugust 31, 2020)(September 1, 2020 toFebruary 28, 2021)(March 1, 2021 toAugust 31, 2021)

mm yen8,518[8,518]5,551[4,897]
2,966
2,587
2,586
199,004[2.2]
82,400101,525[(0.3)]
98,938

8,904[8,904]
5,842[5,180]
3,061
2,677
2,675
199,559[0.3]
82,400101,614[0.1]
98,938

8,867[8,762]
5,662[4,978]
3,204
2,817
2,816
199,804[0.1]
82,400101,755[0.1]
98,938

units

796,000

796,000

796,000

796,000

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

mm yen127,937
2,899
3,642[3,642][–]

127,5442,587
3,250[3,250][–]127,656
2,675
3,361[3,361][–]

127,833
2,817
3,539[3,539][–]mm yenmm yenmm yenmm yen(a)

mm yen(b)

mm yen(c)

mm yen(d)

mm yen[Change from previous period]%[Change from previous period]%

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

32nd fiscal period(September 1, 2019 toFebruary 29, 2020)

9,162[9,162]
5,888[5,226]
3,273
2,900
2,899
194,795[(0.2)]
77,500101,837[(0.0)]
98,938[Expenses related to leasing business]

Interest-bearing debt
Net assets

31st fiscal period(March 1, 2019 toAugust 31, 2019)

9,231[9,231]
5,913[5,250]
3,318
2,939
2,939
195,106[(0.2)]
77,500101,878[0.0]
98,938Operating expenses
Operating income
Ordinary income
ProfitTotal assets

30th fiscal period(e)[Earnings dividend per unit]

yen[Dividend in excess of earnings per unit]

yen

127,987
2,939
3,693[3,693][–](Note 3)%

1.5 [3.0]

1.5 [3.0]

1.3 [2.6]

1.3 [2.7]

1.4 [2.8](Note 3)%

2.9 [5.7]

2.8 [5.7]

2.5 [5.0]

2.6 [5.3]

2.8 [5.5](d)/(b)

%

52.2

52.3

51.0

50.9

50.9

%

Ratio of ordinary income to total
assetsReturn on net assets
Ratio of net assets to total
assets(f)/(e)(Note 3)

%

[0.1]
100.0

[0.1]
100.0

[(1.3)]
100.0[(0.1)]
100.0

[0.0]
100.0

(c)/(b)

%

39.7

39.8

41.4

41.3

41.2

properties

29

29

31

31

32

m2

580,664.27

580,662.77

591,021.51

608,557.70

572,215.71

%

99.6

99.7

99.7

99.5

99.5

mm yen

1,651

1,660

1,686

1,623

1,552

mm yen

476
5,633
184
4,591
5,767

465
5,596
182
4,559
5,728

790
5,307
184
4,273
5,368

687
5,347
181
4,299
5,401

445
5,336
184
4,265
5,358

[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 3)mm yendays(g)(Note 3) mm yen(g)/(e)yen(Note 1) Consumption tax is not included in operating revenues, etc.
(Note 2) 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 3) 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

Fukuoka REIT Corporation (hereinafter “FRC”) was established on July 2, 2004 based on the “Act on Investment Trusts andInvestment Corporations” (Act No. 198 in 1951 including later revisions, hereinafter the “Investment Trusts Act”) and listed on
the Tokyo Stock Exchange, Inc. and the Fukuoka Stock Exchange on June 21, 2005 as the nation’s first real estate investment
trust specializing in regional properties (code number: 8968). FRC invests in real estate throughout Kyushu (including Okinawa
Prefecture), with a central focus on Fukuoka City, and Yamaguchi Prefecture (hereinafter the “Fukuoka and Kyushu areas”) byusing expertise in regional characteristics, a strength in the real estate industry.
FRC started asset management activities on November 9, 2004 after acquisition of four properties comprising retail properties
and office buildings, and manages a total of 32 properties comprising 11 Retail, 10 Office buildings (including land with leaseholdinterest for an office building) and 11 Others as of the end of the 34th fiscal period (August 31, 2021).

(2) Investment environment and portfolio performance
During the fiscal period under review (the 34th fiscal period), the Japanese economy continued to show a pickup trend amid asevere situation still persisting under the impact of the novel coronavirus (COVID-19) infection. As for the outlook, with measurestaken to prevent the spread of infection and vaccination promoted, the economy is expected to keep picking up due in part tothe effects of various political measures and improvements in overseas economies. Attention should be paid, however, to theimpact the infection trend will pose on the economy both in and outside Japan and the influence of changes in the financial andcapital markets, etc.
In the Fukuoka and Kyushu area, the core investment target area for FRC, the economy is picking up, centering around exports and production, although staying in a severe situation. While public spending remains at a high level, the pickup trend in
consumer spending has come to a temporary pause, and supply-and-demand conditions for labor and compensation of employees are both on a weak note. As we foresee, we must be wary of the impact of the trend of COVID-19 on corporate andhousehold sentiments, among other factors.
As for land price trends, the national average price in combined average for residential and commercial land dropped for thesecond consecutive year, although at a decelerating rate of decrease, according to the 2021 Land Price Survey. By land type,residential land price dropped at a lower pace and commercial land price showed a higher rate of decrease. Meanwhile, in Fukuoka City, the central area of FRC’s investment targets, land prices continued rising for 9 consecutive years, up 7.7% year-onyear for commercial land and up 4.4% year-on-year for residential land.
Under such circumstances, FRC’s portfolio achieved solid performance in the asset types of office buildings, logistic facilities,
and residential properties. On the other hand, the impact of the spread of COVID-19 was not contained at Canal City Hakata
and other major retail properties, while hotels failed to recover as tourism demand, etc. did not return strongly.
In the 34th fiscal period, FRC disposed Canal City Hakata·B Grand Building (88.28% co-ownership interest in Grand Building)and acquired Tenjin Nishi-Dori Business Center (Land with leasehold interest) on June 1, 2021, and concluded on August 30,
2021 an agreement regarding acquisition of Hakata Chikushi-Dori Center Building (scheduled for acquisition on March 1, 2022).
When analyzing FRC’s portfolio (on an acquisition price basis) as of the end of the 34th fiscal period by investment target area,
the investment ratio in the Fukuoka metropolitan area accounted for 76.6%; when analyzing by property type, Retail, Officebuildings, and Others accounted for 54.2%, 31.5% and 14.3%, respectively.
On top of these efforts, 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 throughenvironmental, social and governance (ESG) considerations. By setting up the Sustainability Promotion Committee, which comprises President/CEO, full-time directors and general managers of Real Estate Management Department, Investment Department, Finance Department, Planning Department and Compliance Department, the Asset Manager investigates specific targets
and measures and supervises the progress in implementation of the measures with regard to the internal system, cooperation
with related parties outside the company and information disclosure policy, etc. On the implementation side, the sustainability
officer (general manager of the Planning Department), who is the person responsible for the practical aspects concerning thetargets set at the Sustainability Promotion Committee, concurrently serves as general manager of Sustainability Promotion Office, which is engaged in continuous operations related to the GRESB Real Estate Assessment (with Green Star rating), thePrinciples for Responsible Investment (PRI) and the Principles for Financial Action for the 21st Century (PFA21) and other initiatives.
FUKUOKA REIT CORPORATION

10

II. Semiannual Report

II. Semiannual Report

Overview of Asset Management

Overview of Asset Management(3) Summary of fundraising[Changes in market price of investment certificates]

In the 34th fiscal period, FRC conducted long-term borrowings totaling 6,300 million yen to fund the repayment of existing debt
that matured in the period. As a result, the balance of FRC's interest-bearing debt outstanding (including investment corporation
bonds) at the end of the 34th fiscal period totaled 82,400 million yen, with the loan-to-value ratio (ratio of interest-bearing debt(including investment corporation bonds) to total assets) at 41.2% and the ratio of fixed-interest rate debt (ratio of interest-bearing debt with fixed interest rates (including investment corporation bonds) to total interest-bearing debt) at 94.1% as of the samedate. In addition, with regard to the commitment line agreement (credit limit: 6,000 million yen) with The Bank of Fukuoka, Ltd.
serving as the agent, FRC extended the commitment period by a year, lengthening the remaining term of commitment to three
years.
FRC will continue its endeavors to reduce refinancing risks by dispersing debt repayment dates and extending debt duration.
At the same time, FRC will work to mitigate risks of rising interest rates by shifting to fixed-interest rate borrowings and throughother measures.

The 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:Moreover, the credit ratings assigned to FRC as of the end of the 34th 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
StableStableAs a result of these management efforts, operating revenues totaled 8,867 million yen and operating income after excluding
operating expenses such as expenses related to leasing business and asset management fees totaled 3,204 million yen. Ordinary income was 2,817 million yen and profit amounted to 2,816 million yen. Management decided to make a dividend of 3,539
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.

3. Change in the number of investment units issued

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

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

Unitholders’ capital(mm of yen) (Note 11)

Increase
125
41,4005,944
1,698
11,096
8,913
10,263–
11,701
7,795

Balance
125
41,52547,46949,16760,264
69,17779,441
79,441
91,142
98,938Remarks(Note 1)
(Note 2)
(Note 3)(Note 4)30th fiscal period

31st fiscal period

32nd fiscal period

33rd fiscal period

34th fiscal period(March 1, 2019 toAugust 31, 2019)(September 1, 2019 toFebruary 29, 2020)(March 1, 2020 toAugust 31, 2020)(September 1, 2020 toFebruary 28, 2021)(March 1, 2021 toAugust 31, 2021)

182,500 yen
166,000 yen

191,700 yen
167,900 yen

169,900 yen
72,500 yen

11

191,700 yen
163,100 yen

With respect to the dividend for the 34th 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 3,539 yen.
(thousands of yen)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 the reserve
for temporary difference
adjustments

Of the contribution refund,
distribution through the
reduction in unitholders’capital for tax purposes(Of the contribution refund per unit,
distribution per unit through the
reduction in unitholders’ capital fortax purposes)

30th fiscal period

31st fiscal period

32nd fiscal period

33rd fiscal period

34th fiscal period(March 1, 2019 toAugust 31, 2019)(September 1, 2019 toFebruary 29, 2020)(March 1, 2020 toAugust 31, 2020)(September 1, 2020 toFebruary 28, 2021)(March 1, 2021 toAugust 31, 2021)

2,939,139
2,939,679
51
2,939,628[3,693 yen]
2,939,628[3,693 yen]–[–]

2,899,112
2,899,164
132
2,899,032[3,642 yen]
2,899,032[3,642 yen]–[–]

2,586,899
2,587,031
31
2,587,000[3,250 yen]
2,587,000[3,250 yen]–[–]

2,675,572
2,675,604
248
2,675,356[3,361 yen]
2,675,356[3,361 yen]–[–]

2,816,802
2,817,051
7
2,817,044[3,539 yen]
2,817,044[3,539 yen]
–
[–]

–
[–]

–
[–]

–
[–]

–
[–]

–
[–]

–
[–]

–
[–]

–
[–]

–
[–]

–
[–]

(Note 5)(Note 6)(Note 7)(Note 8)(Note 9)(Note 10)(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’ equity due to distribution of dividend in excess of earnings that came from reserve for temporary difference adjustments. The same shallapply hereafter.

FUKUOKA REIT CORPORATION

179,900 yen
126,300 yen

4. Results of dividend, etc.

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

Changes in unitholders’ capital from the incorporation of FRC to the end of the 34th fiscal period are as follows:
Item

HighestLowestFiscal period(4) Summary of performance and dividend

Date

Fiscal period

FUKUOKA REIT CORPORATION

12

II. Semiannual Report

II. Semiannual Report

Overview of the Investment Corporation

Overview of Asset Management
5. Future portfolio management policy and vital issues

3. Matters related to directors

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.

(1) The names of FRC’s directors, etc. and their fees for the 34th fiscal period are as
follows:

6. Significant events that have occurred after the end of the 34th fiscal
periodNo relevant items.

Title

Supervisory Directors
Independent Auditor

Etsuo Matsuyuki
Takashi Tanabe
Yasuo Kawasho
PricewaterhouseCoopers
Aarata LLC–
Representative attorney at law at Tanabe Law Office
Representative Partner, Kawasho Authorize Accountant Office
–

6,000
3,600
8,500

(Note 1) Etsuo Matsuyuki, the Executive Director, possesses four investment units of FRC under his own name. The Supervisory Directors do not possess investment units of FRC under their own name or underanother 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 havevested interest in FRC.
(Note 2) The fees for the Executive Director and Supervisory Directors are the amounts paid to them in the 34th fiscal period, and the fee to the Independent Auditor is the amount payable to it (estimate) foraudits pertaining to the 34th fiscal period.

(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.

FRC has entered into a directors and officers liability insurance agreement as follows.

1. Summary of unitholders’ capital
30th fiscal period

31st fiscal period

32nd fiscal period

33rd fiscal period

34th fiscal period

as of August 31, 2019as of February 29, 2020

as of August 31, 2020

as of February 28, 2021

as of August 31, 2021

10,000,000 units

10,000,000 units

10,000,000 units

10,000,000 units

10,000,000 units

796,000 units

796,000 units

796,000 units

796,000 units

796,000 units

10,551

10,473

14,46813,817

13,306

Executive Director andSupervisory Directors

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 34th fiscal period
The following table sets forth the asset management company, asset custodian and general administrators of FRC as of August
31, 2021.

2. Matters related to investment units
The following table sets forth the major unitholders of FRC as of August 31, 2021.
Name

Total fee for each title for the34th fiscal period(thousands of yen) (Note 2)

Executive Director

Scope of the insured

Total number of authorized
investment units
Total number of investment
units outstanding
Number of unitholders

Major concurrent assignments

4. Matters concerning directors and officers liability insurance agreement

Overview of the Investment Corporation

Fiscal period

Name of directors, etc.

Investment units held (units)

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)
Custody Bank of Japan, Ltd. (Securities investment trust account)
The Shinkumi Federation BankSTATE STREET BANK WEST CLIENT – TREATY 505234
NORTHERN TRUST CO. (AVFC) RE HCR00
MetLife, Inc.
Shikoku Railway Company
Total

176,957
99,091
73,136
31,27920,59014,76012,41011,504
10,2279,130
459,084

Percentage of total number ofinvestment units outstanding (%) (Note)
22.23
12.44
9.18
3.92
2.58
1.85
1.55
1.44
1.28
1.14
57.67

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)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.

(Note) Percentage of total number of investment units outstanding is rounded down to the nearest specified unit.

FUKUOKA REIT CORPORATION13FUKUOKA REIT CORPORATION

14

II. Semiannual Report

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

Use

3. Details of real estate properties in the portfolio

Area(Note 1)

Real estate trust
beneficiary interest

as of August 31, 2021

The following table provides details of the real estate properties owned by FRC as of August 31, 2021.

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)

–
–
–
–
–
2,167
74,58336,82847,996–
20,033
5,362
12,586

–
–
–
–
–
1.1
37.4
18.5
24.1
–
10.0
2.7
6.3

–
–
–
–
–
2,153
66,68036,612
55,418–19,8985,324
13,716

–
–
–
–
–
1.1
33.4
18.3
27.7
–
10.0
2.7
6.9

199,559[186,988]

100.0[93.7]

199,804[186,568]

100.0[93.4]

Fukuoka metropolitan area
Other 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)

34th fiscal period

Total value of
properties owned

RetailReal estate

33rd fiscal period
as of February 28, 2021

(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 2015 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 metropolitanarea).
(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.

Real estate property namePark Place Oita
SunLive City Kokura
Konoha Mall Hashimoto
Square Mall Kagoshima Usuki
Kumamoto Intercommunity SC
Hanahata SC
Kurume Higashi Kushiwara SC
K’s Denki Kagoshima
Marinoa City Fukuoka(Marina Side Building)

Sanix Hakata Building

Higashi Hie Business Center

The following is an overview of the major assets (top ten properties on a book value basis) owned by FRC as of August 31, 2021.

Tenjin Nishi-Dori Center Building

Canal City Hakata
Canal City Hakata·B (Note 4)
Park Place Oita
Canal City Business Center Building
Konoha Mall Hashimoto
Gofukumachi Business Center
LOGICITY Minato Kashii
Tenjin Nishi-Dori Business Center(Land with leasehold interest)
Taihaku Street Business Center
Marinoa City Fukuoka (Marina Side Building)Total

Tenjin North Front Building

29,47620,997
20,112
12,846
9,848
8,767
7,755

46,585.57
31,139.07
121,212.26
23,030.30
22,121.05
19,905.34
43,233.72

45,589.93
30,538.60
121,131.26
23,030.30
21,838.30
19,905.34
43,233.72

97.9
98.1
99.9
100.0
98.7
100.0
100.0

Percentage of total
leasing businessrevenues (%) (Note 3)
11.4
13.3
13.5
7.4
8.9
6.5
Undisclosed (Note 5)

7,754

1,343.51

1,343.51

100.0

0.9

Office buildings

5,632
5,395
128,588

14,677.30
33,069.82
356,317.94

14,566.29
33,069.82
354,247.07

99.2
100.0
99.4

3.7
2.0
–

Office buildings
Retail–Total leasable
floor space (m2)(mm of yen)

(Note 6)

Total leased floor Occupancy rate(%) (Note 2)
space (m2)(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) FRC disposed Canal City Hakata·B Grand Building (88.28% co-ownership interest in Grand Building) on June 1, 2021. The same shall apply hereafter.
(Note 5) The figures are not disclosed as no consent to disclosure has been obtained from the tenants.
(Note 6) The total leasable floor space indicates the land area recorded in the real estate registry. The same shall apply hereafter.

Main use
RetailRetailRetailOffice buildings
RetailOffice buildings
OthersRetail subtotal:

Canal City Business Center Building

2. Major assets owned by FRC
Book value

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
370-3 Higashi Kushiwara, Kurume
City, Fukuoka
4-12, Tokai-cho, Kagoshima City,
Kagoshima
12-30, 2-chome, Odo, Nishi Ward,
Fukuoka City

Canal City Hakata·B

Taihaku Street Business Center

Real estate property name (Note 1)

Location

Canal City Hakata

Gofukumachi Business Center

Higashi Hie Business Center II
Higashi Hie Business Center III
Tenjin Nishi-Dori Business Center(Land with leasehold interest)
Amex Akasakamon Tower
City House Keyaki Dori
Aqualia Chihaya
D-Wing Tower
Granfore Yakuin Minami
Hotel FORZA Oita
Tissage Hotel Naha
Tosu Logistics Center
LOGICITY Minato Kashii
LOGICITY Hisayama
LOGICITY Wakamiya

Form ofownership

2-25, 1-chome, Sumiyoshi, Hakata
Ward, Fukuoka City
10-10, Kami Gofukumachi, Hakata
Ward, Fukuoka City
1-23, 2-chome, Hakataeki Higashi,
Hakata Ward, Fukuoka City
3-21 Gokushomachi, Hakata Ward,
Fukuoka City
1-2, 3-chome, Higashi Hie, Hakata
Ward, Fukuoka City
5-28, 2-chome, Tenjin, Chuo Ward,
Fukuoka City
4-20, 4-chome, Tenjin, Chuo Ward,
Fukuoka City
5-13, 1-chome, Higashi Hie, Hakata
Ward, Fukuoka City45, 4-chome, Higashi Hie, Hakata
Ward, Fukuoka City
149, 2-Chome, Tenjin, Chuo Ward,
Fukuoka City

Office buildings subtotal:

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
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

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

Total leasable
floor space (m2)Period-end
appraisalvalue(mm of yen)
(Note)

Book value
at end ofperiodReal estate appraiser(mm of yen)

46,585.57

30,60029,476

31,139.07

21,40020,997

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

121,212.26

21,20020,112

Japan Real Estate Institute61,450.22

8,440

5,393

Japan Real Estate Institute22,121.05

10,5009,848

Tanizawa Sogo Appraisal
Co., Ltd.

14,602.88

4,960

4,258

Japan Real Estate Institute6,968.66

2,740

1,943

Japan Real Estate Institute2,801.15

1,200

961

6,467.80

2,740

1,995

7,296.17

3,660

2,907

33,069.82

5,900

5,395

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

353,714.65

113,340

103,293

23,030.30

17,40012,846

19,905.34

15,6008,767

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

6,293.75

6,510

3,744

Japan Real Estate Institute

14,677.30

9,190

5,632

Japan Real Estate Institute13,614.59

8,270

4,364

Tanizawa Sogo Appraisal
Co., Ltd.

3,339.32

3,140

2,653

Japan Real Estate Institute5,252.41

4,490

2,414

Japan Real Estate Institute6,214.77

4,690

3,982

2,981.14

3,380

3,256

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

1,343.51

7,790

7,754

Japan Real Estate Institute96,652.43

80,46055,4184,821.25

1,880

1,635

2,710.86

1,040

882

5,619.69

1,950

1,146

Japan Real Estate Institute7,187.59

3,660

2,635

2,496.06

1,330

1,079

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

5,785.44

1,890

1,360

Japan Real Estate Institute3,758.76

2,880

2,810

Tanizawa Sogo Appraisal
Co., Ltd.

4,173.29

1,360

1,153

Japan Real Estate Institute43,233.72

9,210

7,755

24,505.65

5,450

4,762

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

17,556.32

2,400

2,153

121,848.63
572,215.71

33,050226,850

27,376
186,088

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

(Note) “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.

FUKUOKA REIT CORPORATION15FUKUOKA REIT CORPORATION

16

II. Semiannual Report

II. Semiannual Report

Status of FRC’s Assets under Management

Real estate property name33rd fiscal period

34th fiscal period(September 1, 2020 to February 28, 2021)(March 1, 2021 to August 31, 2021)

Retail subtotal:
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)
Office buildings subtotal:(%) (Note 5)

1 [46]
1 [45]
1 [104]
1
1 [123]
13
2
2
1
1
1
25 [339](Note 2)

1 [62]
36
16
1 [68]
1 [27]
1
11
2
5–
74 [228](Note 2)

1,018
1,429
1,198
262
778
252
89
40
88
112
178

11.4
16.1
13.5
2.9
8.7
2.8
1.0
0.5
1.0
1.3
2.0

99.5

5,450

61.2

1 [46]
1 [45]
1 [104]
1
1 [124]
13
2
2
1
1
1
25 [340]

100.0
100.0
100.0
98.8
100.0
100.0
100.0
100.0
94.1

641
557
205
318
351
86
144
162
92

7.2
6.3
2.3
3.6
4.0
1.0
1.6
1.8
1.0

–

–

97.9
98.1
99.9
100.0
98.7
100.0
100.0
100.0
100.0
100.0
100.0

996
1,166
1,183
262
778
253
89
40
88
111
177

11.4
13.3
13.5
3.0
8.9
2.9
1.0
0.5
1.0
1.3
2.0

99.4

5,147

58.7

1 [62]
36
16
1 [69]
1 [27]
1
11
2
6

100.0
100.0
100.0
99.2
100.0
100.0
100.0
100.0
100.0

650
571
205
322
353
86
146
164
95

7.4
6.5
2.3
3.7
4.0
1.0
1.7
1.9
1.1

–

1 (Note 6)

100.0

79

0.9

99.9

2,675

30.5
0.8
0.4
0.7
1.3
0.4
0.7
0.5
Undisclosed(Note 2)

99.6

2,560

28.8

76 [231]

0.7
0.4
0.7
1.3
0.4
0.7
0.3
Undisclosed

1 [64]
1 [40]
1 [101]
1 [130]
1 [97]
1
1

95.4
95.6
96.5
94.4
98.0
100.0
100.0

1

100.0

66
37
60
112
39
63
43
Undisclosed(Note 7)(Note 7)2

100.0

Undisclosed

Undisclosed(Note 7)(Note 7)1

100.0

Undisclosed

Undisclosed(Note 7)(Note 7)1

100.0

Undisclosed

Undisclosed(Note 7)(Note 7)

99.2

939

10.7

99.5

8,762

100.0

1 [66]
1 [41]
1 [103]
1 [132]
1 [95]
1
1

98.8
97.8
97.9
95.1
96.0
100.0
100.0

Tosu Logistics Center

1

100.0

66
39
60
112
38
63
28
Undisclosed(Note 7)(Note 7)

100.0

Undisclosed

Undisclosed(Note 7)(Note 7)

Undisclosed

2(Note 2)LOGICITY Hisayama

1

100.0

Undisclosed(Note 7)(Note 7)LOGICITY Wakamiya

1

100.0

Undisclosed

Undisclosed(Note 7)(Note 7)

99.4

892

10.0

12 [439]100.0

113 [1,010]

Others subtotal:

12 [444]

Total

111 [1,011](Note 2)
(Note 2)(%) (Note 5)(Note 4)

97.7
99.5
100.0
100.0
97.8
100.0
100.0
100.0
100.0
100.0
100.0

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

LOGICITY Minato Kashii

6. Securities incorporated in the portfolio

Total leasing
Total leasing
Percentage ofPercentage of
Number ofOccupancy
Number ofOccupancy
businessbusiness
total leasing
total leasing
tenants at end rate at end oftenants at end rate at end ofrevenues
revenues
businessbusinessof period
periodof period
periodduring periods
during periods
revenues
revenues(Note 1)(%) (Note 3)(Note 1)(%) (Note 3)(mm of yen)
(mm of yen)
(Note 4)

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
K’s Denki Kagoshima
Marinoa City Fukuoka (Marina Side Building)

Status of FRC’s Assets under Management

99.5

8,904

(Note 2)
(Note 2)

(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 12 for the office building and 57 for the residence in the 34th fiscal period (12 for the office building and 56 for the residence in the 33rd 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) The number of tenants indicates the number of the lessee of the land with leasehold interest.
(Note 7) The figures are not disclosed as no consent to disclosure has been obtained from the tenants.

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 August 31,
2021.
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

22,70021,100(319)

22,70021,100(319)(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
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 34th fiscal period.

9. Status of owned assets by country and region
As of the end of the 34th 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.
Planned construction cost
Real estate property nameLocation

PurposeHakata Ward,
Fukuoka City

Replacement of piping

Park Place Oita

Oita City, Oita

Renovation of common spaces

4. Details of renewable energy generation facilities in the portfolio

Park Place Oita

Oita City, Oita

Replacement of air-conditioning units

No relevant items.

SunLive City Kokura

Kokura Minami Ward,
Renovation of common spaces
Kitakyushu City

From August 2021 toApril 2022
From September 2021 toApril 2022
From March 2022 toApril 2022
From June 2021 toSeptember 2021

5. Details of the rights to operate public facilities, etc. in the portfolio
No relevant items.
17(mm of yen)

Schedule
Total

Canal City Hakata

FUKUOKA REIT CORPORATION

Fair value(mm of yen) (Note 2)

FUKUOKA REIT CORPORATION

18

Construction
Amountcost
already paid

597

–

–

650

25

27

126

–

–

189

4

4

II. Semiannual Report

II. Semiannual Report

Capital Expenditures for Owned Real Estate

Expenses and Liabilities

2. Capital expenditures during the 34th fiscal period

2. Status of debt

Capital expenditures for the real estate properties owned by FRC totaled 445 million yen in the 34th period. Furthermore, FRC
incurred construction costs of 611 million yen in total in the period, including 153 million yen in repair and maintenance expenses classified as expenses on the Statement of Income and 12 million yen in expenses for restoration to former state. The following table provides the overview of major construction work that was completed in the 34th fiscal period.

As of the end of the 34th fiscal period (August 31, 2021), FRC has the following debt from respective financial institutions.

Real estate property nameLocation

Purpose

PeriodCanal City Hakata

Hakata Ward, Fukuoka City

Water supply piping for guestrooms

Canal City Hakata

Hakata Ward, Fukuoka City

Repair of facilities

Gofukumachi Business Center

Hakata Ward, Fukuoka City

Replacement of air-conditioning units

Sanix Hakata Building

Hakata Ward, Fukuoka City

Replacement of air-conditioning units

Hotel FORZA Oita

Oita City, Oita

Replacement of air-conditioning units

Construction cost
(mm of yen)

From October 2020 toApril 2021
From July 2017 toJuly 2021
From July 2021 toAugust 2021
From March 2021 toApril 2021

22
57
35
16

April 2021

18

Balance as ofMarch 1,
2021

Balance as ofAugust 31,
2021

Averageinterest
rate(mm of yen)

(mm of yen)(%) (Note)

July 31, 2014

2,300
1,000
1,400
800
500
300

–
–
–
–
–
–

June 30, 2015–

Development Bank of Japan

August 29, 2014

The Bank of Fukuoka

August 31, 2015

Category

Drawdown
dateLenderMizuho Bank
The Norinchukin Bank
The Hiroshima Bank
The Kitakyushu Bank
Current The Iyo Bank
maturities The Higo Bankof long- Sumitomo Mitsui Banking
term debt Corporation

Subtotal

Repayment
date

Repayment
methodUse offunds

Description

0.841

July 30, 2021

Lump-sum uponmaturity

Refinance fundNo collateral/
No guarantee

1,600

0.790

June 30, 2022

–

4,000

1.010

August 31, 2022

–

400

0.424

August 31, 2022

6,300

6,000

Development Bank of Japan

August 29, 2014

4,000

–

1.010

August 31, 2022

3. Reserves for long-term repair and maintenance plans

Sumitomo Mitsui Banking
Corporation

June 30, 2015

1,600

–

0.790

June 30, 2022

FRC has deposited the following amounts from the cash flows generated during the 34th 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)

Sumitomo Mitsui Trust Bank

July 31, 2015

1,500

1,500

0.564

July 31, 2023

Development Bank of Japan

August 31, 2015

4,000

4,000

0.880

August 31, 2023

The Bank of Fukuoka

August 31, 2015

400

–

0.424

August 31, 2022

The Nishi-Nippon City Bank

August 31, 2015

400

400

0.870

August 31, 2023

The Bank of Fukuoka

February 29, 2016

2,000

2,000

0.424

February 29, 2024

The Nishi-Nippon City Bank

February 29, 2016

2,000

2,000

0.440

February 29, 2024

Development Bank of Japan

February 29, 2016

2,000

2,000

0.620

February 28, 2025

Mizuho Bank

February 29, 2016

500

500

0.440

February 29, 2024

Shinsei Bank

July 29, 2016

700

700

0.400

July 31, 2024

September 30, 2016

300

300

0.420

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

The Bank of Fukuoka

December 30, 2016

1,500

1,500

0.426

December 30, 2026

MUFG Bank

March 31, 2017

800

800

0.481

March 31, 2025

Resona Bank

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

Fiscal period
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

30th fiscal period

31st fiscal period

32nd fiscal period

33rd fiscal period

34th fiscal period(March 1, 2019 toAugust 31, 2019)(September 1, 2019 toFebruary 29, 2020)(March 1, 2020 toAugust 31, 2020)(September 1, 2020 toFebruary 28, 2021)(March 1, 2021 toAugust 31, 2021)

1,000
–
–
1,000

1,000
–
–
1,000

1,000
–
–
1,000

1,000
–
–
1,000

1,000
–
–
1,000

Sumitomo Mitsui Trust Bank
Development Bank of JapanThe Oita Bank
Long-term The Kagoshima Bank
debt
The Kitakyushu BankThe Juhachi-Shinwa Bank
The Hiroshima Bank

Expenses and Liabilities
1. Details of expenses related to asset management
(thousands of yen)
Item(a) Asset management fees (Note)(b) Asset custody fees(c) Administrative service fees(d) Directors’ compensations(e) Other operating expenses
Total

33rd fiscal period

34th fiscal period(September 1, 2020 to February 28, 2021)(March 1, 2021 to August 31, 2021)

524,777
7,401
58,6659,600
61,374
661,818

531,986
7,544
58,8109,600
75,780683,722(Note) Aside from the amounts of the asset management fees shown above, 19,250 thousand yen for asset management, capitalized in the acquisition costs, related to the acquisition of Tenjin Nishi-DoriBusiness Center (Land with leasehold interest) and 38,500 thousand yen for asset management related to the disposition of Canal City Hakata·B Grand Building (88.28% co-ownership interest in Grand
Building) were paid in the 34th fiscal period.

FUKUOKA REIT CORPORATION19FUKUOKA REIT CORPORATION

20

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 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 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II. Semiannual Report

II. Semiannual Report

Expenses and Liabilities
Category
LenderDrawdown
date

Expenses and Liabilities

Balance as ofMarch 1,
2021

Balance as ofAugust 31,
2021

Averageinterest
rate(mm of yen)

(mm of yen)(%) (Note)

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

March 30, 2018

500

500

0.630

March 31, 2028

Sumitomo Mitsui Banking
Corporation

March 30, 2018

500

500

0.504

March 31, 2025

MUFG Bank

March 30, 2018

500

500

0.490

March 31, 2027

Sumitomo Mitsui Trust Bank
Long-term
The Oita Bank
debt
The Hiroshima Bank

March 30, 2018

400

400

0.576

March 31, 2027

March 30, 2018

400

400

0.646

March 31, 2028

March 30, 2018

400

400

0.646

March 31, 2028

Shinsei Bank

March 30, 2018

300

300

0.400

March 31, 2025

August 31, 2027

Sumitomo Mitsui Banking
Corporation

January 31, 2019

500

500

0.655

January 31, 2029

MUFG Bank

January 31, 2019

500

500

0.590

January 31, 2028

The Nishi-Nippon City Bank

January 31, 2019

400

400

0.421

January 31, 2029

The Bank of Fukuoka

January 31, 2019

300

300

0.421

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

July 31, 2019

1,200
500
500

1,200
500
500

0.521

July 31, 2029

The Norinchukin Bank

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

FUKUOKA REIT CORPORATION

21

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
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 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 fundCategory
Description
LenderNo 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

Drawdown
date

Balance as ofMarch 1,
2021

Balance as ofAugust 31,
2021

Averageinterest
rate(mm of yen)

(mm of yen)(%) (Note)

Repayment
date

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

The Kitakyushu Bank

July 31, 2020

500

500

0.526

July 31, 2030

July 31, 2020

200

200

0.526

July 31, 2030

March 31, 2021

–

1,000

0.590

March 31, 2031

–
–
–
–
–
71,10077,400

2,300
1,400
800
500
300
71,40077,4000.490

July 31, 2031

The Iyo Bank
Long-term
debt
The Juhachi-Shinwa Bank
Mizuho Bank
The Hiroshima Bank
The Kitakyushu BankThe Iyo Bank
The Higo Bank
Subtotal
Total

July 30, 2021

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

Lump-sum uponmaturity

Use offunds
Acquisition 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(Note) 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.

3. Investment corporation bonds
As of the end of the 34th fiscal period (August 31, 2021), FRC has the following investment corporation bonds outstanding.
Issue

Issue date

Balance as ofMarch 1,2021

Decreaseduring the
fiscal period

Balance as ofAugust 31,2021(mm of yen)

(mm of yen)

(mm of yen)(%)

Maturitydate

Maturity
methodUse

Description

CouponFirst Series ofUnsecured Bonds

December 30, 2013

2,000

–

2,000

1.32

December 29, 2023

Lump-sum uponmaturity(Note 1)

Repayment ofdebt

No collateral/
No guarantee(Note 2)

Second Series ofUnsecured Bonds

July 31, 2017

2,000

–

2,000

1.00

July 30, 2032

Lump-sum uponmaturity(Note 1)

Repayment ofdebt

No collateral/
No guarantee(Note 2)

Third Series ofUnsecured Bonds

July 31, 2018

1,000

–

1,000

1.20

July 30, 2038

Lump-sum uponmaturity(Note 1)

Repayment ofdebt

No collateral/
No guarantee(Note 2)

5,000

–

5,000

Total

(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.

4. Short-term investment corporation bonds
No relevant items.

5. Subscription rights to shares
No relevant items.

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

22

II. Semiannual Report

II. Semiannual Report

Acquisitions and Sales during the 34th Fiscal Period

Acquisitions and Sales during the 34th Fiscal Period

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

Tenjin Nishi-Dori Business Center(Land with leasehold interest)
Canal City Hakata·B Grand Building(88.28% co-ownership interest in Grand Building)
Total

Disposition

Acquisition price(Note)(mm of yen)

Disposition date

7,700

June 1, 2021

–

–

–

(2) Amount of fees paid, etc.

Disposition price–
June 1, 2021

7,700

–

(mm of yen)Book value

Gain or loss on sale

(mm of yen)

(mm of yen)

–

–

–

7,700

7,504

104

7,700

7,504

104

(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

FRC paid the following fees to the interested parties, etc. during the 34th 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 34th fiscal period.
Category

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

Property leasing brokerage fees (Note 2)

23,251

Property management fees (Note 3)

331,886

Outsourcing fees (Note 2) (Note 4)

1,443,747

Other operating expenses (Note 2)

1,420,913

No relevant items.

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

Property name
Tenjin Nishi-Dori Business Center(Land with leasehold interest)
Canal City Hakata·B Grand Building(88.28% co-ownership interest inGrand Building)Acquisition price ordisposition priceReal estateappraisal value(Note 1)(mm of yen)

(Note 2)(mm of yen)Type of asset

Transaction
dateReal estate in trust

June 1, 2021

7,700Real estate in trust

June 1, 2021

7,700Real estateappraiser

Appraisal
date

7,790

Japan Real Estate
Institute

February 1,
2021

7,640

Tanizawa Sogo
Appraisal Co., Ltd.

February 28,
2021(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 appraisals were valuated by applying the “Real Estate Appraisal Standards, Chapter 3: Valuation for price of real estate for securitization.”(2) Other
FRC carried out no transaction that was required to have the value, etc. reviewed pursuant to the provisions of Article 201 of theInvestment Trusts Act.

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.

5,711
11,71070,370252,404
573,268
720,027
118,067
168,606
294,796803

The asset management company (Fukuoka Realty Co., Ltd.) does not concurrently conduct any class 1 financial instruments
transaction business, class 2 financial instruments transaction business, land and building transaction business or real estatesyndication business, and has no such transactions with FRC.

Transaction amount, etc.

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

Sale amount, etc.

(thousands of yen)(thousands of yen)

7,700,000 (100.0%)7,700,000 (100.0%)7,700,000 (100.0%)7,700,000 (100.0%)

– (–)
– (–)

(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 34th fiscal period.

FUKUOKA REIT CORPORATION

23

24.6
50.4
21.2
76.1
39.7
49.9
8.2
11.9
20.7
0.1

5. Transactions with the asset management company regarding
concurrent work conducted by the asset management company(1) Transaction status
Purchase amount, etc.

(%)

(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 34th fiscal period. The amounts include construction work
fees paid to third parties through interested parties, etc.
Fukuoka Jisho Co., Ltd.
120,072 thousand yen
FJ. Entertainment Works Ltd. 300,911 thousand yen
Sunlife Co., Ltd.
103,831 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.
6,509 thousand yen
FJ. Entertainment Works Ltd.
14,393 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.

4. Transactions with interested parties, etc.

Category

Percentage of total
amount(B) / (A)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. Cash Flow Statement, and VIII. Notes to Financial Statements on later pages of this report.

Independent Auditor’s Report

2. Changes in calculation method of depreciation
To the Board of Directors of Fukuoka REIT Corporation

No relevant items.

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

OpinionWe have audited the financial statements of Fukuoka REIT Corporation (the Company), which comprise the balance sheet as of August 31, 2021, and the statement of income, statement of changes in
net assets and cash flow statement for the six months period then ended, and a summary of significant accounting policies and other explanatory information.
In our opinion, the accompanying financial statements present fairly, in all material respects, thefinancial position of the Company as of August 31, 2021, and its financial performance and its cash
flows for the six months period then ended in accordance with accounting principles generally accepted in Japan.

No relevant items.

Basis for Opinion

6. Disclosure on real estate owned by corporation owning foreign realestateWe 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 in accordance 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 for our opinion.

No relevant items.

Other

Responsibilities of Management and Those Charged with Governance for the Financial
Statements

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.

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 are considered material if, individually or in the aggregate, they could reasonably be expected toinfluence the economic decisions of users taken on the basis of these financial statements.

FUKUOKA REIT CORPORATION25FUKUOKA REIT CORPORATION

26

III. Independent Auditor's Report

IV. Balance Sheet(thousands of yen)Account

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 not detecting 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 tocease 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 fair presentation.
We communicate with management regarding, among other matters, the planned scope and timingof 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 ethical requirements regarding independence, and to communicate with them all relationships and other mattersthat may reasonably be thought to bear on our independence, and where applicable, related safeguards.
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.
Mitsuo Tsuruta
Designated Engagement Partner
Certified Public Accountant

Takashi Yabutani
Designated Engagement Partner
Certified Public Accountant		PricewaterhouseCoopers Aarata LLC
November 22, 2021

FUKUOKA REIT CORPORATION

27

AssetsCurrent assets
Cash and deposits
Cash and deposits in trust
Operating accounts receivable
Prepaid expenses
OthersTotal current assets
Non-current assets
Property, plant and equipment
Buildings
Accumulated depreciation
Buildings, net
Structures
Accumulated depreciation
Structures, 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

33rd fiscal period

34th fiscal period(as of February 28, 2021)(as of August 31, 2021)*1*1

FUKUOKA REIT CORPORATION

6,596,412
3,742,580
528,707287,185
3,007
11,157,893

6,948,985
4,015,688
593,014272,674
2,891
11,833,253

1,166,235(9,712)
1,156,522
20,698(129)
20,569
1,571
(78)
1,492
989,124
104,526,979(34,998,550)
69,528,428
2,049,545(848,800)
1,200,744
1,509,292(639,038)
870,254
747
(709)
37
1,393,755(1,210,954)
182,801
107,452,281
16,791
181,419,047

1,167,104(24,360)
1,142,744
20,698(322)
20,376
1,571
(195)
1,375
989,124
101,200,889(35,296,331)
65,904,558
1,933,215(856,694)
1,076,521
1,459,851(668,138)
791,713
626
(594)
31
1,428,616(1,201,413)
227,203110,373,363
480,002
181,007,013*1*1

5,545,883
24,044
5,569,927

5,545,883
15,584
5,561,467

63
10,000327,135
1,042,944
1,380,143
188,369,118

13
10,000327,135
1,036,131
1,373,280
187,941,761

32,04032,040199,559,052

29,93829,938
199,804,953

28

IV. Balance Sheet

V. Statement of Income(thousands of yen)Account

33rd fiscal period

34th fiscal period(as of February 28, 2021)(as of August 31, 2021)

(thousands of yen)Account

Liabilities

33rd fiscal period

34th fiscal period(September 1, 2020 to February 28, 2021)(March 1, 2021 to August 31, 2021)

Operating revenues

Current liabilities

Leasing revenues – real estate*18,306,678*1

8,157,755

561,673452,735

Other leasing revenues – real estate*1

597,438*1

605,165

6,300,000

6,000,000

Gain on sales of real estate property–*2104,254

Operating accounts payable
Current maturities of long-term debt
Accounts payable-other

22,905

17,146

Accrued expenses

415,653

420,218

Income taxes payable

1,835

944

316,581705,556

Advances received

1,088,923

1,057,228

Asset custody fees

7,401

7,544

Deposits received

793,952

912,833

Administrative service fees

58,66558,8109,501,526

9,566,664

Director’s compensations

9,600

9,600

Investment corporation bonds

5,000,000

5,000,000

Long-term debt

71,100,000

71,400,000

450,791

450,811

Non-operating revenues

Accrued consumption taxes

Total current liabilities
Non-current liabilities

Tenant leasehold and security deposits
Tenant leasehold and security deposits received in trust*1

Total non-current liabilities
Total liabilities

8,904,117

8,867,174

Expenses related to leasing business*1 *3

5,180,315

Asset management fees

524,777*1 *3

4,978,758
531,986

Other operating expenses

61,37475,780Total operating expenses

5,842,134

5,662,481

3,061,982

3,204,693

Operating income

11,631,661

Interest received

47

54

88,443,156

88,482,473

Others

1,357

504

97,944,683

98,049,137

Total non-operating revenues

1,404

559

Interest expenses

253,182

257,612Interest expenses on investment corporation bonds

29,20029,200

Amortization of investment corporation bond issuance
expenses

2,102

2,102

Amortization of investment unit issuance expenses

3,835

–

Financing related expenses

97,66398,49237

39

11,892,365*1

Net assets

Non-operating expenses

Unitholders’ equity
Unitholders’ capital

98,938,764

98,938,764

Surplus
Unappropriated surplus

2,675,604

2,817,051

Total surplus

2,675,604

2,817,051

101,614,369

101,755,815

Total unitholders’ equity
Total net assets

Total operating revenues
Operating expenses*3

Total liabilities and net assets

101,614,369
199,559,052*3

101,755,815
199,804,953

OthersTotal non-operating expenses

386,021387,447

Ordinary income

2,677,366

2,817,806

Profit before income taxes

2,677,366

2,817,806

Income taxes-current

1,842

952

Income taxes-deferred

(49)

50

Total income taxes
ProfitFUKUOKA REIT CORPORATION

29

1,793

1,003

2,675,572

2,816,802Surplus brought forward

31

248

Unappropriated surplus

2,675,604

2,817,051

FUKUOKA REIT CORPORATION

30

VI. Statement of Changes in Net Assets

VII. Cash Flow Statement

33rd fiscal period (September 1, 2020 to February 28, 2021)
Balance as of September 1, 2020

Unitholders’ capital
98,938,764

Account(thousands of yen)

Surplus
Unappropriated surplus
2,587,031

Total unitholders’ equity
101,525,796

Total net assets
101,525,796

Changes in the current fiscal period

2,677,366

2,817,806

Depreciation and amortization expenses

1,623,716

1,552,759

Amortization of investment corporation bond issuance expenses

2,102

2,102

Amortization of investment unit issuance expenses

3,835

–

Interest received

(47)

(54)

282,382

286,812(2,587,000)(2,587,000)(2,587,000)

Interest expenses

Profit2,675,572

2,675,572

2,675,572

Gain on sales of real estate property

Balance as of February 28, 2021–

88,572

88,572

88,572

98,938,764

2,675,604

101,614,369

101,614,369

34th fiscal period (March 1, 2021 to August 31, 2021)
(thousands of yen)
Unitholders’ Equity

Item
Balance as of March 1, 2021

Unitholders’ capital
98,938,764

Surplus
Unappropriated surplus

Total unitholders’ equity

Total net assets

2,675,604

101,614,369

101,614,369

Dividend of surplus(2,675,356)(2,675,356)(2,675,356)

Profit2,816,802

2,816,802

2,816,802–

141,446

141,446

141,446

98,938,764

2,817,051

101,755,815

101,755,815

Changes in the current fiscal period

Total of changes in the current fiscal period
Balance as of August 31, 2021

34th fiscal period(March 1, 2021 to August 31, 2021)

Profit before income taxes

Dividend of surplus
Total of changes in the current fiscal period

33rd fiscal period(September 1, 2020 to February 28, 2021)

Net cash provided by (used in) operating activities

Unitholders’ Equity
Item(thousands of yen)–(104,254)

Decrease (increase) in operating accounts receivables

515,217(64,306)

Decrease (increase) in consumption taxes refund receivable

177,613–

Increase (decrease) in accrued consumption taxes

316,581

388,975

Increase (decrease) in operating accounts payable

25,185

19,627

Increase (decrease) in accounts payable-other

10,287(6,134)

Increase (decrease) in accrued expenses

60,503

3,749

Increase (decrease) in advances received(34,635)(31,695)

Increase (decrease) in deposits expenses(100,119)

118,880

Decrease (increase) in prepaid expenses(4,468)14,511

Decrease (increase) in long-term prepaid expenses

95,407

6,812

Others, net

6,766

6,897

Subtotal

5,657,694

5,012,48847

54(282,607)(285,996)

Interest income received
Interest expenses paid
Income taxes paid
Net cash provided by (used in) operating activities(974)(1,844)

5,374,159

4,724,702

Net cash provided by (used in) investment activities
Purchase of property, plant and equipment(355,262)

(400)

–

7,608,310

Purchase of property, plant and equipment in trust(479,144)(8,771,773)

Proceeds from tenant leasehold and security deposits

84,13680

Proceeds from sales of property, plant and equipment in trust

Repayments of tenant leasehold and security deposits

–

(60)

Proceeds from tenant leasehold and security deposits in trust

122,888

460,486

Repayments of tenant leasehold and security deposits in trust(214,907)(721,189)

Proceeds from restricted trust deposits

2,016

3,283

Payments for restricted trust deposits(2,470)(4,575)(842,743)(1,425,837)

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

6,300,000

Repayments of long-term debt–

(6,300,000)(2,586,536)(2,674,475)(2,586,536)(2,674,475)

1,944,879

624,389

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

31

8,348,438
10,293,317*1

FUKUOKA REIT CORPORATION

32

10,293,317*1

10,917,706

VIII. Notes to Financial Statements

VIII. Notes to Financial Statements(Significant accounting policies)
1. Depreciation method for non-current assets(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.

2. Accounting for deferred assets

Investment unit issuance expenses
Investment unit issuance expenses are amortized utilizing the straight-line method over three years.
Investment corporation bond issuance expenses
Investment corporation bond issuance expenses are amortized utilizing the straight-line method over theperiod through redemption.

3. Standards for recognition of revenues and expenses

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 are
not expensed but capitalized as part of the acquisition cost of the relevant property.
No amount equivalent to property taxes, etc. was capitalized in the acquisition cost of real estate, etc. forthe 33rd fiscal period. The amount equivalent to property taxes, etc. capitalized in the acquisition cost ofreal estate, etc. was 20,322 thousand yen for the 34th fiscal period.

4. Method of hedge accounting(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.

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 amaturity of 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(1) 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(2) Accounting for consumption taxes
National and local consumption taxes are accounted with the consumption taxes excluded.

(Notes to accounting standards not yet adopted)• Accounting Standard for Revenue Recognition (ASBJ Statement No. 29 (revised 2020) issued by the Accounting Standards Board of Japan (ASBJ) on March 31, 2020)
FUKUOKA REIT CORPORATION

33• Implementation Guidance on Accounting Standard for Revenue Recognition (ASBJ Guidance No. 30 issued by ASBJ on
March 26, 2021)• Implementation Guidance on Disclosures about Fair Value of Financial Instruments (ASBJ Guidance No. 19 (revised 2020)
issued by ASBJ on March 31, 2020)(1) Overview
The International Accounting Standards Board (IASB) and the Financial Accounting Standards Board (FASB) jointly developed a comprehensive accounting standard for revenue recognition, and issued it as Revenue from Contracts with Customers (IFRS 15 issued by IASB and Topic 606 issued by FASB) in May 2014. IFRS 15 is applicable for accounting periods beginning on January 1, 2018 and thereafter, and Topic 606 is applicable for accounting periods beginning after
December 15, 2017. In accordance with this, the ASBJ has developed a comprehensive accounting standard for revenue
recognition and issued it together with its implementation guidance.
In developing the accounting standard for revenue recognition, the ASBJ made it a basic policy to adopt the basic
principles of IFRS 15 as a starting point. By doing so, the ASBJ established the accounting standard from the viewpointof comparability, which is a benefit for securing consistency with IFRS 15, between financial statements based on Japanese GAAP and those based on other accounting standards. Alternative treatments were also added, to the extent thatthey do not harm the comparability, in cases where there are items to be considered in the actual practices conducted inJapan to date.
(2) Scheduled date of adoption
FRC will adopt the accounting standard, etc. from the beginning of the fiscal period ending February 2022.
(3) Impact of adoption of the accounting standard, etc.
The amount of impact on the financial statements by the adoption of the Accounting Standard for Revenue Recognition,etc. is being assessed at present.

• Accounting Standard for Fair Value Measurement (ASBJ Statement No. 30 issued by ASBJ on July 4, 2019)• Accounting Standard for Financial Instruments (ASBJ Statement No. 10 (revised 2019) issued by ASBJ on July 4, 2019)• Implementation Guidance on Accounting Standard for Fair Value Measurement (ASBJ Guidance No. 31 issued by ASBJ
on June 17, 2021)• Implementation Guidance on Disclosures about Fair Value of Financial Instruments (ASBJ Guidance No. 19 (revised 2020)
issued by ASBJ on March 31, 2020)(1) Overview
IASB and FASB have established detailed guidance for fair value measurement (IFRS 13 “Fair Value Measurement” underthe International Financial Reporting Standards and Topic 820 “Fair Value Measurement” of the Accounting Standards
Codification under the U.S. accounting standards) containing almost the same content. In light of this, the ASBJ worked
to secure consistency of the Japanese accounting standards with the international accounting standards, mainly in termsof the guidance on and disclosure of the fair value of financial instruments, and announced the Accounting Standard for
Fair Value Measurement, etc.
The basic policy of the ASBJ for the development of the Accounting Standard for Fair Value Measurement was to adopt
all provisions of the IFRS 13 as a rule by using a unified calculation method, from the viewpoint of improving the comparability between the financial statements of the Japanese and foreign companies. Moreover, in consideration of the practices conducted in Japan to date, the ASBJ determined to establish other treatments for individual items, to the extent
that they do not greatly harm the comparability between the financial statements.
(2) Scheduled date of adoption
FRC will adopt the accounting standards, etc. from the beginning of the fiscal period ending February 2022.
(3) Impact of adoption of the accounting standards, etc.
The amount of impact on the financial statements by the adoption of the Accounting Standard for Fair Value Measurement, etc. is being assessed at present.

FUKUOKA REIT CORPORATION

34

VIII. Notes to Financial Statements

VIII. Notes to Financial Statements(Notes to balance sheet)(Notes to statement of income)*1. Assets pledged as collateral and secured liabilities
Assets pledged as collateral are as follows:	*1. Breakdown of revenues and expenses related to real estate leasing business.
(thousands of yen)

Buildings in trust
Lands in trust

33rd fiscal period

34th fiscal period

as of February 28, 2021

as of August 31, 2021

5,914,267
16,101,020
22,015,288

Total
Secured liabilities are as follows:	

5,834,470
16,101,020
21,935,491(thousands of yen)

Tenant leasehold and security deposits received in trust

33rd fiscal period

34th fiscal period

as of February 28, 2021

as of August 31, 2021

1,057,440

911,385

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

33rd fiscal period

34th fiscal period

as of February 28, 2021

as of August 31, 2021

6,000,000–
6,000,000

34th fiscal period(September 1, 2020 to February 28, 2021)(March 1, 2021 to August 31, 2021)

6,830,181
1,075,140
401,356

8,306,678

552,81144,627597,438
8,904,117

1,870,563
211,326
743,094
45,880452,048
1,623,716
233,685

5,180,315
5,180,315
3,723,801

6,755,878
1,007,813
394,063581,258
23,906

1,775,633
153,469
723,140
44,998477,384
1,552,759
251,371

8,157,755

605,165
8,762,920

4,978,758
4,978,758
3,784,162*2. Breakdown of gain on sales of real estate property

33rd fiscal period (September 1, 2020 to February 28, 2021)
Not applicable.

[Committed line of credit agreement 2]
	(thousands of yen)

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

33rd fiscal period

34th fiscal period

as of February 28, 2021

as of August 31, 2021

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)
33rd fiscal period

34th fiscal period

as of February 28, 2021

as of August 31, 2021

50,0006,000,000–
6,000,000

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)
33rd fiscal period

7,000,000–
7,000,000

34th fiscal period (March 1, 2021 to August 31, 2021)
Canal City Hakata·B Grand Building (88.28% co-ownership interest in Grand Building)(thousands of yen)
7,700,000
7,504,056
91,689104,254

Proceeds from sales of real estate property
Costs of sale of real estate property
Other selling expenses
Gain on sales of real estate property*3. Transactions with affiliated companies.
	

50,000(thousands of yen)Item33rd fiscal period

34th fiscal period(September 1, 2020 to February 28, 2021)(March 1, 2021 to August 31, 2021)

Expenses related to real estate leasing business

966,563

853,139(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

FUKUOKA REIT CORPORATION

35

33rd fiscal period

34th fiscal period(September 1, 2020 to February 28, 2021)(March 1, 2021 to August 31, 2021)

10,000,000 units
796,000 units

10,000,000 units
796,000 units

FUKUOKA REIT CORPORATION

36

VIII. Notes to Financial Statements

VIII. Notes to Financial Statements(Notes to cash flow statement)*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)
33rd fiscal period

34th fiscal period(September 1, 2020 to February 28, 2021)(March 1, 2021 to August 31, 2021)

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

6,596,412
3,742,580(45,674)
10,293,317

6,948,985
4,015,688(46,966)
10,917,706

2. Matters concerning fair value of financial instruments(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:	

Due within 1 year
Due after 1 year
Total

(thousands of yen)

33rd fiscal period

34th fiscal period(as of February 28, 2021)(as of August 31, 2021)

6,202,348
12,349,940
18,552,289

5,884,692
11,467,779
17,352,471(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 a certain level of creditworthiness, by reference to their credit ratings, as well as by setting short durations for these
deposits.
Tenant leasehold and security deposits received in trust are deposits from tenants and are exposed to liquidity risks if
tenants move out before the contracts expire. FRC mitigates this risk by such measures as securing on-hand liquidity.
FUKUOKA REIT CORPORATION

37(3) Supplementary explanation on matters concerning fair value of financial instruments
The fair value of financial instruments, aside from values based on market price, may include values based on reasonablecalculations when there is no market price. Certain assumptions are made in calculating those values, and there may becases 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.

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 28, 2021. Please note that the following table does not include
those financial instruments for which determination of fair value is considered to be extremely difficult (refer to (Note 2)).
(thousands of yen)(1) Cash and deposits(2) Cash and deposits in trust
Total of assets(3) Short-term debt
(4) Current maturities of long-term debt
(5) Investment corporation bonds(6) Long-term debt
(7) Tenant leasehold and security deposits received in trust
Total of liabilities(8) Derivative transactions
Total of derivative transactions

Book value recorded on thebalance sheet
6,596,412
3,742,580
10,338,992–
6,300,000
5,000,000
71,100,000
232,943
82,632,943––

Fair value(Note 1)

6,596,412
3,742,580
10,338,992–
6,314,330
5,197,533
71,721,079
232,664
83,465,608––

Difference––––
14,330
197,533
621,079(279)
832,665––

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, 2021. Please note that the following table does not include
those financial instruments for which determination of fair value is considered to be extremely difficult (refer to (Note 2)).
(thousands of yen)(1) Cash and deposits(2) Cash and deposits in trust
Total of assets(3) Short-term debt
(4) Current maturities of long-term debt
(5) Investment corporation bonds(6) Long-term debt
(7) Tenant leasehold and security deposits received in trust
Total of liabilities(8) Derivative transactions
Total of derivative transactions

Book value recorded on thebalance sheet
6,948,985
4,015,688
10,964,673–
6,000,000
5,000,000
71,400,000
87,40882,487,408––

Fair value(Note 1)

6,948,985
4,015,688
10,964,673–
6,027,728
5,235,538
71,938,633
87,112
83,289,012––

Difference––––
27,728
235,538
538,633(296)
801,603––(Note 1) Calculation method for fair value of financial instruments(1) Cash and deposits, (2) Cash and deposits in trust and (3) Short-term debt
		 As these are settled within a short period of time, the fair value is approximately the same as the book value and is thus stated at that book value.
(4) Current maturities of long-term debt, (5) investment corporation bonds and (6) 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
calculated by 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.
(7) Tenant leasehold and security deposits received in trust		The fair value of tenant leasehold and security deposits received in trust, which are deposited by the lessees, is calculated by discounting the future cash flows of such deposits by a reasonably
estimated rate that takes into account the term remaining until the reimbursement deadline and credit risks.
(8) Derivative transactions
		 Please refer to (Notes to derivative transactions)

FUKUOKA REIT CORPORATION

38

VIII. Notes to Financial Statements

VIII. Notes to Financial Statements(Note 2) Financial instruments for which determination of fair value is considered extremely difficult.

	(thousands of yen)
33rd fiscal period

34th fiscal period(as of February 28, 2021)(as of August 31, 2021)

Tenant leasehold and security deposits received in trust (*)

11,659,421

11,544,253(*) Tenant leasehold and security deposits received in trust are not subject to the requirement to disclose fair value, as it is considered extremely difficult to determine the fair value. This is because future
cash flows cannot be estimated since there is no market price and it is difficult to assume the reimbursement dates due to the possibility of cancellation, renewal and re-execution of lease contracts bylessees even if the contract terms are fixed, and because the past rate of tenants moving out of the properties owned by FRC may not be indicative of future move out rates as they are too specific toindividual circumstances.

2. Derivatives to which hedge accounting is applied
33rd fiscal period (as of February 28, 2021)
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.
(Note 3) Amount of redemption of monetary claims scheduled to be due after closing of accounts (as of February 28, 2021)

	(thousands of yen)Due in 1 year or less
6,596,412
3,742,580
10,338,992

Cash and deposits
Cash and deposits in trust
Total

Special accounting for interest rate swaps

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

Contract amount, etc.
Of which,exceeding 1 year
23,700,000

17,400,000

Fair
value

Calculation
method for thefair value

(*)

–



(Note 4) Amount of repayment of long-term debt and investment corporation bonds scheduled to be due after closing of accounts (as of February 28, 2021)

	(thousands of yen)
Long-term debt
Investment corporation
bonds

Main hedged
item

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.

Due in 1 year or less
6,948,985
4,015,688
10,964,673

Total

Type of derivative transactions,etc.

34th fiscal period (as of August 31, 2021)(thousands of yen)
Cash and deposits
Cash and deposits in trust

Method of hedge accounting(*) 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) (6)).

Amount of redemption of monetary claims scheduled to be due after closing of accounts (as of August 31, 2021)

	(thousands of yen)Due in 1 year or less
6,300,000

1 to 2 years
6,000,000

2 to 3 years
10,400,000

3 to 4 years
2,700,000

4 to 5 years
6,400,000

Due after 5 years
45,600,000––

2,000,000––

3,000,000(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
22,700,000

21,100,000

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) (6)).

(Notes to retirement benefits)
33rd fiscal period (as of February 28, 2021)

Amount of repayment of long-term debt and investment corporation bonds scheduled to be due after closing of accounts (as of August 31, 2021)

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

Due in 1 year or less
6,000,000

1 to 2 years
5,900,000

2 to 3 years
5,200,000

3 to 4 years
3,900,000

4 to 5 years
11,100,000

Due after 5 years
45,300,000––

2,000,000––

3,000,000

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

34th fiscal period (as of August 31, 2021)
Not applicable as FRC does not have any retirement benefit system.

(Notes to tax effect accounting)(Notes to investment securities)

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

33rd fiscal period (as of February 28, 2021)
Not applicable.

(thousands of yen)

33rd fiscal period

34th fiscal period(as of February 28, 2021)(as of August 31, 2021)

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

34th fiscal period (as of August 31, 2021)
Not applicable.

(Notes to derivative transactions)

63
63
63

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.
(%)

1. Derivatives to which hedge accounting is not applied
33rd fiscal period (as of February 28, 2021)

33rd fiscal period

34th fiscal period(as of February 28, 2021)(as of August 31, 2021)

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

Not applicable.

34th fiscal period (as of August 31, 2021)

31.25(31.23)0.04
0.07

Not applicable.
FUKUOKA REIT CORPORATION

13
13
13

39

FUKUOKA REIT CORPORATION

40

31.25
(31.24)0.03
0.04

VIII. Notes to Financial Statements

VIII. Notes to Financial Statements(Notes to equity method income and earnings)
33rd fiscal period (from September 1, 2020 to February 28, 2021)(3) Sister companies

Not applicable as FRC does not have any affiliated companies.

33rd fiscal period (from September 1, 2020 to February 28, 2021)
34th fiscal period (from March 1, 2021 to August 31, 2021)
Not applicable as FRC does not have any affiliated companies.

Classification(Notes to transactions with related parties)

Subsidiaries
of otheraffiliates

FJ.
Entertainment Hakata Ward,
Works Ltd. Fukuoka City

Subsidiaries
of otheraffiliates

Fukuoka
Realty Co.,Ltd.

1. Transactions with related parties(1) Parent company and major corporate unitholders
33rd fiscal period (from September 1, 2020 to February 28, 2021)
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.
[or ownership of suchin FRC]

Descriptionofrelationship

Descriptionoftransaction

Consignment Consignment
Ownership in FRC
of real estate of real estate
Direct [9.19%]
management, management,
Indirect [0.76%]
etc.
etc. (Note 1)(thousands of yen)Transaction
amountCategory

Balance at
end ofperiod966,563

Operatingaccounts
payable71,773(Note 3)(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.

34th fiscal period (from March 1, 2021 to August 31, 2021)

Otheraffiliates

Name

Fukuoka
Jisho Co.,Ltd.

LocationHakata Ward,
Fukuoka City

Capital100,000(Note 3)Business
description

General realestatebusiness

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

Descriptionofrelationship

Location

Capital

20,000(Note 2)

Hakata Ward,
Fukuoka City

200,000

34th fiscal period (from March 1, 2021 to August 31, 2021)


Name

Location

CapitalBusiness
description

20,000Real estatebusiness

200,000

Asset
managementof FRC andotherbusinesses(thousands of yen)
Descriptionoftransaction

Purchase ofreal estate,
Consignment
etc. (Note 1)
Ownership in FRC
of real estate
Direct [9.19%]
Consignment
management,
Indirect [0.76%]
of real estateetc.
management,
etc. (Note 2)

Transaction
amount7,700,000(Note 4)

853,139(Note 4)

Category–
Operatingaccounts
payableBalance at
end ofperiodSubsidiaries
of otheraffiliates

FJ.
Entertainment Hakata Ward,
Works Ltd. Fukuoka City–

Subsidiaries
of otheraffiliates

Fukuoka
Realty Co.,
Ltd.

(Note 2)

63,489Not applicable.

34th fiscal period (from March 1, 2021 to August 31, 2021)
Not applicable.

FUKUOKA REIT CORPORATION

41

Operatingaccounts
payable183,290

Accruedexpenses

305,873(Note 5)(Note 5)

Hakata Ward,
Fukuoka City

(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 1,358,342–(Note 4)
management, management,
etc.
etc. (Note 1)

–

Asset
managementof FRC, etc.

Payment of
asset
management
fees

531,986(Note 4)

Category

Balance at
end ofperiodOperatingaccounts
payable218,691

Accruedexpenses

308,536(Note 4)(Note 4)(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 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) The amount of the asset management fees is decided based on the asset management consignment agreement following discussion between the concerned parties.
(Note 4) Consumption taxes are not included in the transaction amount but are included in the balance at end of period.

(4) Directors and major individual unitholders

33rd fiscal period (from September 1, 2020 to February 28, 2021)

Balance at
end ofperiod(Note 4)(Note 1) Transaction terms and conditions are determined in reference to appraisal values by third parties and 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. 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 4) Consumption taxes are not included in the transaction amount but are included in the balance at end of period.

(2) Affiliated companies, etc.

Category(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) Etsuo Matsuyuki, Executive Director of FRC, concurrently serves as a CEO & Representative Director 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.

Classification

Classification

Name(thousands of yen)

FRC’s share ofBusiness voting rights, etc. Description of Description of Transaction
description [or ownership of relationship transaction
amountsuch in FRC]
Consignment Consignment
Real estateof real estate of real estate 1,367,224–(Note 5)businessmanagement, management,
etc.
etc. (Note 1)
Asset
Asset
management Payment ofmanagementof FRC, etc.
asset
524,777of FRC and–andmanagement(Note 5)otherconcurrent
fees(Note 4)businesses
service ofofficer (Note 3)

33rd fiscal period (from September 1, 2020 to February 28, 2021)
Not applicable.

34th fiscal period (from March 1, 2021 to August 31, 2021)
Not applicable.

FUKUOKA REIT CORPORATION

42

VIII. Notes to Financial Statements

VIII. Notes to Financial Statements

2. Parent company and major affiliated companies

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

33rd fiscal period (from September 1, 2020 to February 28, 2021)(thousands of yen)
Use

Not applicable.

34th fiscal period (from March 1, 2021 to August 31, 2021)

RetailNot applicable.

(Notes to asset retirement obligations)

Office buildings

33rd fiscal period (from September 1, 2020 to February 28, 2021)
Not applicable.
Others34th fiscal period (from March 1, 2021 to August 31, 2021)
Not applicable.
Total(Notes to properties for lease)
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

RetailOffice buildings

OthersTotal

33rd fiscal period

34th fiscal period(September 1, 2020 to February 28, 2021)(March 1, 2021 to August 31, 2021)

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

111,898,617(475,229)
111,423,388
120,920,000

111,423,388(8,093,210)
103,330,177
113,340,000

48,284,259(286,884)
47,997,375
71,410,000

47,997,375
7,864,406
55,861,781
80,460,000

27,406,571
161,640
27,568,211
32,570,000

27,568,211(191,688)
27,376,522
33,050,000

187,589,448(600,473)
186,988,974
224,900,000

186,988,974(420,493)
186,568,481
226,850,000(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 33rd fiscal period, the amount of increase is primarily attributable to renovation, etc. of LOGICITY Wakamiya (345 million yen) and capital expenditures (687 millionyen), and the amount of decrease is primarily attributable to depreciation and amortization expenses (1,623 million yen). Of the amount of change during the 34th fiscal period, the amount of increaseis primarily attributable to acquisition of Tenjin Nishi-Dori Business Center (Land with leasehold interest) (7,754 million yen) and capital expenditures (445 million yen), and the amount of decrease is
primarily attributable to disposition of Canal City Hakata·B Grand Building (88.28% co-ownership interest in Grand Building) (7,504 million yen) and depreciation and amortization expenses (1,552 million
yen).
(Note 3) The fair value at end of period is the appraisal value provided by outside real estate appraisers. Furthermore, of the fair value of retail facilities at the end of the 33rd fiscal period, the value for Canal City
Hakata·B is the sum total of the planned disposition price for the portion for which FRC concluded a sales agreement with Hoshino Resorts REIT, Inc. on March 18, 2021, and the appraisal value for the
portion which FRC will continue to own after the disposition.

FUKUOKA REIT CORPORATION

43

33rd fiscal period

34th fiscal period(September 1, 2020 to February 28, 2021)(March 1, 2021 to August 31, 2021)

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

5,450,777
3,551,333
1,899,443

5,147,997
3,311,116
1,836,881

2,560,881
1,234,805
1,326,075

2,675,524
1,240,831
1,434,693

892,457
394,175
498,281939,398
426,810
512,5878,904,117
5,180,315
3,723,801

8,762,920
4,978,758
3,784,162(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.

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

[Related information]
33rd fiscal period (from September 1, 2020 to February 28, 2021)(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.

34th fiscal period (from March 1, 2021 to August 31, 2021)(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.

FUKUOKA REIT CORPORATION

44

VIII. Notes to Financial Statements

VIII. Notes to Financial Statements(Notes to significant subsequent events)(2) Information by region

No relevant items.

(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.

(Schedule of securities)
Not applicable.

(Schedule of contract amount, etc. and fair value of derivative transactions
and forward exchange transactions)(thousands of yen)
Category

Total
33rd fiscal period

34th fiscal period(September 1, 2020 to February 28, 2021)(March 1, 2021 to August 31, 2021)

Net assets per unit (yen)Profit per unit (yen)127,656
3,361

127,833
3,538(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:

33rd fiscal period

34th fiscal period(September 1, 2020 to February 28, 2021)(March 1, 2021 to August 31, 2021)

2,675,572–
2,675,572
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)

2,816,802–
2,816,802
796,000(Notesto cash distributions)(thousands of yen)
33rd fiscal period

34th fiscal period(September 1, 2020 to February 28, 2021)(March 1, 2021 to August 31, 2021)

I. Unappropriated surplus

2,675,604

2,817,051

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

2,675,356[3,361 yen]248

2,817,044[3,539 yen]7

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
2,675,356 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
2,817,044 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.

Method for calculating dividends

Contract amount, etc.
Of which, exceeding 1 year

(Note 1)

Interest rate swap transaction
Receivable floating; Payable fixed

Off-market transaction(Notes to per unit information)

Account

Type21,100,000(319,415)

22,700,000

21,100,000(319,415)(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.

(Schedule of property, plant and equipment, and intangible assets)(thousands of yen)

Buildings
Structures
Tools and fixtures
Land

Balance as ofMarch 1,2021
1,166,235
20,6981,571
989,124

Buildings in trust

Type of asset

Increase

Decrease

Balance as ofAccumulated Depreciation
August 31,
depreciation for the period
2021
1,167,104
24,36014,647
20,698
322
193
1,571
195
117
989,124––

Net property
andRemarks
equipment
1,142,744 (Note 1)
20,376
1,375
989,124

869
–
–
–

–
–
–
–

104,526,979

324,4023,650,492

101,200,889

35,296,331

1,439,106

65,904,558

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

2,049,545

16,768133,098

1,933,215

856,694

29,296

1,076,521(Note 1)
(Note 2)
(Note 1)
(Note 2)

1,509,292

2,806

52,246

1,459,851

668,138

41,597

791,713(Note 1)
(Note 2)

747

–

121

626

594

0

31

(Note 2)Tools and fixtures in trust

1,393,755

74,094

39,232

1,428,616

1,201,413

22,758227,203

107,452,281

7,754,946

4,833,864

110,373,363––

110,373,363(Note 1)
(Note 2)
(Note 1)
(Note 2)

16,791

474,996

11,785480,002––480,002(Note 3)

219,127,021
5,545,883

8,648,884–

8,720,841–

219,055,064
5,545,883

38,048,050–

1,547,717–

181,007,013
5,545,883

81,417–

10,281

71,13655,551

5,042

15,584

5,627,301
224,754,322–
8,648,884

10,281
8,731,123

5,617,019
224,672,083

55,551
38,103,602

5,042
1,552,759

5,561,467
186,568,481

Land in trust
Construction in progressin trust
Subtotal
Leasehold right in trust
Total
Other intangible assets inintangible
trust
assetsSubtotal
Total(Note 1) The main increase in the 34th fiscal period is due to acquisition of Tenjin Nishi-Dori Business Center (Land with leasehold interest) and construction work at properties.
(Note 2) The main decrease in the 34th fiscal period is due to disposition of Canal City Hakata·B Grand Building (88.28% co-ownership interest in Grand Building).
(Note 3) The main increase in the 34th fiscal period is the deposit for the acquisition of Hakata Chikushi-Dori Center Building (scheduled on March 1, 2022).

(Schedule of other specified assets)
Not applicable.

45(Note 2)

22,700,000(Note) Amounts other than the amounts of dividend per unit are rounded down to the nearest thousand yen.

FUKUOKA REIT CORPORATION

Fair value

FUKUOKA REIT CORPORATION

46(Note 2)

VIII. Notes to Financial Statements

VIII. Notes to Financial Statements(Schedule of investment corporation bonds)
Issue

Issue date

Balance as ofMarch 1,2021

Decreaseduring the
fiscal period

Balance as ofAugust 31,
2021(thousands of yen)(thousands of yen)(thousands of yen)First Series ofUnsecured Bonds

December 30,
2013

2,000,000

Second Series ofUnsecured Bonds

July 31, 2017

2,000,000

Third Series ofUnsecured Bonds

July 31, 2018

Total

–
–

Coupon(%)

2,000,000
2,000,000

1,000,000–

1,000,000

5,000,000–

5,000,000(Scheduleof debt)Maturity date

December 29,
1.32
2023
1.00
1.20

Use

Description

Lump-sumupon maturity

Repayment ofdebt

No collateral/
No guarantee

Repayment ofdebt

No collateral/
No guarantee

Repayment ofdebt

No collateral/
No guarantee(Note 1)

July 30,2032

Lump-sumupon maturity

July 30,
2038

Lump-sumupon maturity(Note 1)

(Note 1)

(Note 2)

(Note 2)

(Note 2)

(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.



(thousands of yen)
Category
Investment corporation bonds

Due in 1 year or less–

1 to 2 years–

2 to 3 years
2,000,000

Balance as ofMarch 1,
2021

Increase

Decrease

Balance as of Average
August 31, interest rate(%) (Note 1)
2021

Mizuho Bank

2,300,000–

2,300,000–

The Norinchukin Bank

1,000,000–

1,000,000–

The Hiroshima Bank

1,400,000–

1,400,000–

The Kitakyushu Bank

800,000–

800,000–

500,000–

500,000–

300,000–

300,000––

1,600,000–

Development Bank of Japan–

4,000,000

The Bank of Fukuoka–

SubtotalCategory

Maturity
method3 to 4 years–

4 to 5 years–

Repayment
date

Use of funds Description

0.841

July 30, 2021

Refinance fundNo collateral/
No guarantee

1,600,000

0.790

June 30, 2022

Refinance fundNo collateral/
No guarantee–

4,000,000

1.010

August 31, 2022

Refinance fund

400,000–

400,000

0.424

August 31, 2022

Refinance fund6,300,000

6,000,000

6,300,000

6,000,000

Development Bank of Japan

4,000,000–

4,000,000

–

1.010

August 31, 2022

Refinance fundNo collateral/
No guarantee

Sumitomo Mitsui Banking
Corporation

1,600,000–

1,600,000

–

0.790

June 30, 2022

Refinance fundNo collateral/
No guarantee

Sumitomo Mitsui Trust Bank

1,500,000––

1,500,000

0.564

July 31, 2023

Refinance fundDevelopment Bank of Japan

4,000,000––

4,000,000

0.880

August 31, 2023

Refinance fund

The Bank of Fukuoka

400,000–

400,000–

0.424

August 31, 2022

Refinance fund

The Nishi-Nippon City Bank

400,000––

400,000

0.870

August 31, 2023

Refinance fund

The Bank of Fukuoka

2,000,000––

2,000,000

0.424

February 29, 2024

Refinance fund

The Nishi-Nippon City Bank

2,000,000––

2,000,000

0.440

February 29, 2024

Refinance fundDevelopment Bank of Japan

2,000,000––

2,000,000

0.620

February 28, 2025

Refinance fundMizuho Bank

500,000––

500,000

0.440

February 29, 2024

Refinance fund

Shinsei Bank

700,000––

700,000

0.400

July 31, 2024

Refinance fund

Sumitomo Mitsui Trust Bank

300,000––

300,000

0.420

September 30, 2025

Refinance fundDevelopment Bank of Japan

0.718

December 30, 2025

Refinance fund

LenderCurrent The Iyo Bank
maturities
of long- The Higo Bank
term debt Sumitomo Mitsui Banking
Corporation

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

1,500,000––

1,500,000

100,000––

100,000

100,000––

100,000

The Kitakyushu Bank

100,000––

100,000

The Juhachi-Shinwa Bank

200,000––

200,000

The Hiroshima Bank

100,000––

100,000

The Bank of Fukuoka

1,500,000––

1,500,000

0.426

December 30, 2026

Refinance fund

MUFG Bank

800,000––

800,000

0.481

March 31, 2025

Refinance fundResona Bank

600,000––

600,000

0.658

March 31, 2027

Refinance fund

The Higo Bank

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 fundNo collateral/
No guarantee

The Miyazaki Bank

700,000––

700,000

1,100,000––

1,100,000

500,000––

500,000

1,800,000––

1,800,000

0.650

December 31, 2026

Refinance fundNo collateral/
No guarantee

The Iyo Bank
Development Bank of Japan47

No collateral/
No guarantee
No collateral/
No guarantee

Long-term The Oita Bank
debt
The Kagoshima BankThe Juhachi-Shinwa BankFUKUOKA REIT CORPORATION(thousands of yen)

FUKUOKA REIT CORPORATION48

No collateral/
No guarantee

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

VIII. Notes to Financial Statements

VIII. Notes to Financial Statements

LenderBalance as ofMarch 1,
2021

Increase

Decrease

Balance as of Average
August 31, interest rate(%) (Note 1)
2021

The Bank of Fukuoka

2,000,000––

2,000,000

The Nishi-Nippon City Bank

2,000,000––

2,000,000

The Nishi-Nippon City Bank

500,000––

The Bank of Fukuoka

500,000–

The Oita Bank

100,000–

The Kitakyushu Bank

100,000

The Juhachi-Shinwa Bank
The Hiroshima Bank

Balance as ofMarch 1,
2021

Increase

Decrease

The Nishi-Nippon City Bank

2,500,000––

2,500,000

Mizuho Bank

1,700,000––

500,000

Aozora Bank

1,000,000––

500,000

Resona Bank

700,000–

100,000

MUFG Bank––

100,000

The Kagoshima Bank

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 fundLong-term Mizuho Bank
debt
Sumitomo Mitsui Banking
Corporation

500,000––

500,000

0.630

March 31, 2028

Refinance fund

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

Shinsei Bank

300,000––

300,000

0.400

March 31, 2025

Refinance fund

Sumitomo Mitsui Banking
Corporation

500,000––

500,000

0.655

January 31, 2029

Refinance fund

MUFG Bank

500,000––

500,000

0.590

January 31, 2028

Refinance fund

The Nishi-Nippon City Bank

400,000––

400,000

0.421

January 31, 2029

Refinance fund

The Bank of Fukuoka

300,000––

300,000

0.421

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

The Bank of Saga

500,000––

500,000

0.521

July 31, 2029

Refinance fund

The Higo Bank

500,000––

500,000

1,500,000––

1,500,000

0.303

January 29, 2027

Refinance fund

500,000––

500,000

0.480

September 29, 2028

Refinance fundCategory

Development Bank of JapanThe Norinchukin BankMUFG BankFUKUOKA REIT CORPORATION

49

Repayment
date

Use of funds Description

0.792

July 31, 2027

Refinance fund

0.892

July 31, 2027

Refinance fund

0.850

August 31, 2027

Refinance fundNo collateral/
No guarantee
No collateral/
No guarantee

No collateral/
No guarantee

Category

Repayment
date

Use of funds Description

0.480

February 28, 2030

Refinance fund

1,700,000

0.420

February 28, 2030

Refinance fund–

1,000,000

0.569

June 28, 2030

Refinance fund––

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 fund

1,500,000––

1,500,000

0.530

July 31, 2030

Refinance fund

1,000,000––

1,000,000

0.470

July 31, 2030

Refinance fund

500,000––

500,000

0.526

July 31, 2030

Refinance fund

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

The Kitakyushu Bank–

800,000–

800,000

0.490

July 31, 2031

Refinance fund

The Iyo Bank–

500,000–

500,000

The Higo Bank–

300,000–

300,000

71,100,000

6,300,000

6,000,000

71,400,000

77,400,000

12,300,000

12,300,000

77,400,000

LenderDevelopment Bank of Japan
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 Average
August 31, interest rate(%) (Note 1)
2021

Mizuho Bank
Long-term
The Kitakyushu Bank
debt
The Iyo Bank

Subtotal
Total

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) 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
5,900,000

2 to 3 years
5,200,000

3 to 4 years
3,900,000

4 to 5 years
11,100,000

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

FUKUOKA REIT CORPORATION

50