Fukuoka REIT Corporation
Q&A Summary for the 33rd Fiscal Period (Period Ended February 2021)
Earnings Briefing Session for Institutional Investors/Analysts
Date: April 16, 2021 (Fri.), 3:30 PM – 4:20 PM (web conference)
Q1

Do you anticipate having more cases of property replacement going forward?
Specifically, do you have a willingness to sell your hotels or retail properties and acquire
office buildings or logistics facilities?

A1

At present, we have no intention of selling any hotel or retail property. As for officebuildings and logistics facilities, we would very much like to acquire them as long as wecan find good properties. Having said that, we will investigate property sale if we see agood opportunity, such as that in the 33rd fiscal period.

Q2

With regard to Canal City Hakata·B Grand Building, what has caused the difference in
its appraisal value between Fukuoka REIT Corporation and Hoshino Resorts REIT, Inc.?

A2

We think the biggest factor is the difference in expected income estimated by therespective REITs.

Q3

In terms of external growth, you said you aim to achieve an asset size of 250 billion
yen. Around how long do you suppose will be required for that goal?

A3

It is difficult to clearly indicate the period, but the asset size has increased by 130 billion
yen over the last 15 years. As such, we would like to expand the asset size with a paceof growth of 8 to 9 billion yen per year on average in mind.

Q4

The office market condition in Fukuoka appears to be more defensive than in Tokyo,
but can we expect that it will show an improvement trend down the road? Also, how
do you see the upward trend of your office rent going? Do you anticipate that theupward trend will continue in the 34th fiscal period and thereafter?

A4We believe that the office market in Fukuoka is more favored than that in Tokyo invarious ways. As for rent increases, the amount of increase in the 34th fiscal period isexpected to be smaller than that of the 33rd fiscal period results, partly because it isdifficult to discern how tenant performance will be, including the impact of the spreadof COVID-19. Nevertheless, we will make our best endeavors on negotiations withtenants.

Q5

Please give us the details of the background of the asset replacement you haveconducted with Hoshino Resorts REIT, Inc.

A5

In light of full-service hotels facing with a tough situation due to the impact of thespread of COVID-19, we were investigating renovation or alternative use of the floors
other than accommodation floors of our hotels. For Canal City Hakata·B Grand Building,
disposition was one of the options to take in mind. Then, we received an offer ofacquisition from Hoshino Resorts REIT, Inc. and we decided to conduct the deal. Weasked for sponsor support to cover the decrease in operating revenues as a result of
the disposition, and it resulted in the latest asset replacement.

Q6

Your logistics facilities have achieved a notable period-on-period increase in revenues.
Are there any other factor than the full-period contribution of LOGICITY Wakamiya for
the increase?

A6

The increase in the 33rd fiscal period is solely due to the full-period contribution ofLOGICITY Wakamiya. It is true that, in the 30th fiscal period, we achieved an upwardrevision of rent upon contract renewal for LOGICITY Minato Kashii. In principle, however,
we have concluded long-term lease agreements for our logistics facilities. Therefore,
there was no rent increase in accordance with new contract renewals in the 33rd fiscal
period.

Q7Your future estimates of the active retail properties may appear to be ratherconservative. Will there be any chance of upside gains?

A7

We do want to achieve upside gains, but we think that figuring out how we should deal
with the concerns about the fourth wave of COVID-19 infections and other COVIDrelated factors is quite tough.

*This material contains statements on future business performance, plans, management targets, and strategies, etc. These forwardlooking statements are based on the latest judgments made by Fukuoka REIT Corporation and Fukuoka Realty Co., Ltd., and the actual
results of Fukuoka REIT Corporation may differ materially from those in the forward-looking statements due to various factors.
Therefore, Fukuoka REIT Corporation and Fukuoka Realty Co., Ltd. do not guarantee their respective future performances described inthis material or explanations based on this material. Although Fukuoka REIT Corporation and Fukuoka Realty Co., Ltd. have preparedthis material based on information that is believed to be reliable, no guarantee is made as to the accuracy, rationality, or completenessof the content. Please note that all the descriptions of this material are effective as of the date when this material was prepared, andmay be subject to change without prior notice. This material is solely for the purpose of providing information to investors, and is notintended for soliciting investment or other activities. When making a final decision on investment, investors are kindly requested to doso based on their own judgment and responsibility, fully recognizing and understanding the investment-related risks including adecrease in investment value.