July 23, 2019

Provisional translation only

Fukuoka REIT Corporation
1-2-25 Sumiyoshi, Hakata Ward, Fukuoka City
Etsuo Matsuyuki
CEO & Representative Director(Securities Code: 8968)
Asset Management Company:
Fukuoka Realty Co., Ltd.
1-2-25 Sumiyoshi, Hakata Ward, Fukuoka City
Etsuo Matsuyuki
CEO & Representative Director
Inquiries:
Keishi Tamura
General Manager of Finance Department
TEL: +81-(0)92-272-3900
Notice Concerning Borrowing of Funds (Partial Green Loan) and Interest Rate Swap Transaction
Fukuoka REIT Corporation announces that it will conduct the borrowing of funds and has executed an interest rate swap
transaction, as described below. Moreover, the Green Loan is the first green loan to be issued among companies in theKyushu region in compliance with the “Green Loan Principles” (Note 1) and the first green loan among J-REITs to adopt
the syndication method. Please refer to the attachment for more information of green loan.
(Note 1) The “Green Loan Principles” were established by the Loan Market Association and Asia Pacific Loan Market Association in March 2018as an international guideline for loans of which use is limited to the environmental field, and consist of four major items (1. Use of funds 2. Project
evaluation and selection process 3. Fund management and 4. Reporting).

1. Borrowing of funds
1) Reason for borrowings(Refinancing of borrowings associated with the acquisition of Canal City Hakata)2) Outline of borrowings
Borrowing 1 (long-term debt) (Note 2)
1. Lender: Mizuho Bank, The Bank of Saga, The Higo Bank
2. Amount: 2.2 billion yen
3. Interest rate: Base interest rate (JBA 3-month Japanese Yen TIBOR) +0.30% (Note 3)
4. Drawdown date: July 31, 2019
5. Borrowing method: Loan agreement concluded as of July 29, 2019
6. Repayment date: July 31, 2029
7. Repayment method: Lump-sum upon maturity
8. Description: No collateral, No guarantee
Borrowing 2 (long-term debt)
1. Lender: The Norinchukin Bank
2. Amount: 1.5 billion yen
3. Interest rate: To be determined (Note4) / Fixed rate
4. Drawdown date: July 31, 2019
5. Borrowing method: Loan agreement concluded as of July 29, 2019
6. Repayment date: January 29, 2027
7. Repayment method: Lump-sum upon maturity
8. Description: No collateral, No guarantee- 1 -(Note 2) Borrowings by green loan
(Note 3) The applied base interest rate is the JBA 3-month Japanese Yen TIBOR two business days before the last day of January, April, July,and October every year. (The repayment date will be the following business day if the date falls on a non-business day or the precedingbusiness day if the date fall into the next month) Moreover, JBA Japanese Yen TIBOR can be checked on the website of JBA TIBOR
Administration. http://www.jbatibor.or.jp/english/(Note 4) Interest rate will be announced once determined.

3) Outline of refinancing
Refinancing 1
1. Lender: Mizuho Bank, The Norinchukin Bank, The Bank of Saga
2. Amount: 3.7 billion yen
3. Repayment date: July 31, 2019
4. Repayment method: Lump-sum upon maturity
5. Description: No collateral, No guarantee
2. Interest rate swap transaction
1) Reason for the execution of interest rate swap transaction
To hedge risk of interest rate volatility by converting the floating interest rates payable to fixed interest rates forpart of the borrowings.
2) Outline of interest rate swap transaction
1. CounterpartyMizuho Bank

2. Notional Amount

2.2 billion yen

3.Interest rate

Fixed interest ratefor payment

To be announced (Note 5)

Floating interest
rate for receipt

Base interest rate (JBA3-month Japanese yen TIBOR)+0.30％

4. Commencement dateJuly 31, 2019

5. Termination dateJuly 31, 2029

6. Payment date

Fixed interest rate for payment and floating interest rate for receipt are due on
July 31, 2029. The first payment will be made at the end of October 2019, andon the last day of January, April, July, and October every year. (the repayment
date will be the following business day if the date falls on a non-business day orthe preceding business day if the date fall into the next month)(Note 5) Interest rate will be announced once determined.

3. Status of Debt after Borrowing(unit: mm yen)
Before borrowing

Short-term debt

0Long-term debt

After borrowing

Change00

72,50072,5000［9,400］［5,700］Total

72,50072,5000Investment Corporation Bonds

5,000

5,0000Interest-bearing debt

77,50077,5000

Of which, long-term debt payable due within
one year- 2 -［（3,700）］

4. Others
Concerning risks related to repayments of this borrowing, etc., there are no material changes from the“Investment risks” disclosed in the latest Securities Report for the 29th Fiscal Period (submitted on May 31, 2019).
*This document was distributed to Kabuto Club (press club within the Tokyo Stock Exchange), Press Club for the Ministryof Land, Infrastructure, Transport and Tourism, Construction Trade Paper Press Club for the Ministry of Land,Infrastructure, Transport and Tourism, Fukuoka Economic Press Club, and Fukuoka Securities Finance Press Club.
*Fukuoka REIT Corporation’s website is https://www.fukuoka-reit.jp/eng/- 3 -<Reference>
1. Purpose and background of borrowing through green loans
FRC and its asset management company Fukuoka Realty Co., Ltd. (the “Asset Management Company”) are engaged
in maximizing unitholder interests over the medium to long term as their mission. To achieve this mission, they consider
it essential to promote sustainability through securing environmental, social and governance (ESG) awareness, on topof pursuing profitability as the primary objective. Accordingly, they share the belief that it is important to reflect
awareness on various ESG issues in their real estate investment and management processes. As a policy for specificallyimplementing this thinking, the Asset Management Company established its “Sustainability Policy” on January 29,
2018 and included “5. Utilization of Green Building Certification” therein. The acquisition of green building
certifications, etc. is considered to visualize the results of environmental and social efforts in real estate undermanagement and enhance competitiveness of properties.
FRC’s efforts have been highly evaluated by third-party organizations,
resulting in the acquisition of “Green Star” in Global Real Estate
Sustainability Benchmark (GRESB) in 2018, and “4 Stars” in“GRESB Rating,” a relative evaluation based on the global ranking of
the comprehensive score of each participant.
In addition, FRC is promoting the acquisition of various environmental certifications concerning the environmental
performance of its facilities such as “DBJ Green Building Certification” by the Development Bank of Japan Inc. and“BELS Evaluation.” On March 25, 2019, the following rankings were reacquired by FRC: “5 Stars” for 2 properties, “4Stars” for 2 properties, and “3 Stars” for 2 properties. As a result, the total number of properties for which FRC has
acquired ranking consists of 2 properties with “5 Stars,” 4 properties with “4 Stars,” and 3 properties with “3 Stars” inthe DBJ Green Building Certification, and 1 property with “5 Stars,” 2 properties with “3 Stars,” and 1 property with
“2 Stars” in the BELS Evaluation.
FRC decided to conduct borrowings through green loans with an aim to further promote ESG activities as well as expand
fund procurement methods with the expansion of its investor base.
2. Green loans and green finance framework1) Green loansGreen loans are borrowings allocated to environmentally friendly businesses and comply with the “Green LoanPrinciples,” an international guideline.
The entire amount of the funds procured through the Green Loan will be allocated to the refinancing of borrowings
associated with the acquisition of Canal City Hakata. In addition, the Green Loan has received a comprehensive
evaluation of “Green 1,” the highest rating regarding eligibility for “Green Loan Principles,” from Japan Credit
Rating Agency, Ltd. (JCR) (Note 6).Borrowing through green loans will be implemented within the limit of theamount of debt of Eligible Green Projects.
(Note 6) For details, please refer to the website of Japan Credit Rating Agency, Ltd. (https://www.jcr.co.jp/en)2) Green finance framework
FRC has established the green finance framework in line with the “Green Bond Principles 2018” and “Green Bond
Guidelines 2017 by Ministry of the Environment” set forth by the Ministry of the Environment to conduct green
finance including green loans.
In this green finance framework, FRC created the following framework to ensure that the borrowings or investment
corporation bonds it procures are eligible for green finance.
①Use of funds procured through green finance- 4 -The funds procured through green finance will be allocated to the acquisition of assets defined in “2.” (the“Eligible Green Projects”), repayment of borrowings required in the acquisition of Eligible Green Projects
or redemption of investment corporation bonds issued and outstanding.
②Eligible Green Projects
Eligible Green Projects are assets that have received or scheduled to receive one of the following
certifications of third-party certification organizations as of the date of procurement in green finance orreporting among the specified assets owned by FRC.
(i) 3, 4 or 5 stars in DBJ Green Building Certification(ii) B+, A or S rank in CASBEE Certification(iii) 3, 4 or 5 stars in BELS Evaluation③Maximum procurement amount in green finance
The amount of debt (the “Debt of Eligible Green Projects”) calculated by multiplying the total acquisition
price of Eligible Green Projects by LTV (debt / total assets) as of the end of the latest fiscal period is set as
the maximum procurement amount in green finance.

④Reporting
After the procurement through green financing, FRC will announce the total amount of Eligible GreenProjects, Debt of Eligible Green Projects and the amount of procurement through green finance as of the endof each fiscal period (every February and August).
In addition, FRC will announce the following indicators on the Eligible Green Projects as of the end ofFebruary every year.
・Number of properties, number of environmental certifications acquired and type of Eligible Green Projects
3. Overview of Canal City Hakata
The Green Loan will be used to refinance borrowings associated with the acquisition of Canal City Hakata. Theoverview of the target property is as follows.
<Target property>
Property Name
Location

Canal City Hakata
2-22, 1-chome, Sumiyoshi, Hakata Ward, Fukuoka CityUseRetailBuilt

April 15, 1996

Structure/floor

Steel-framed reinforced concrete structure with flat roof, 13 floors above
ground and 2 below

Total Floor area

46,604.75 ㎡Acquisition Price

32,000 million yen

Environment Certification

DBJ Green Building Certification

Characteristics / Environment

・Canal City Hakata is a 7-minute walk from Gion Station on the Fukuoka City- 5 -5-Star

SystemSubway Kuko Line.
・The property is a multi-use commercial complex in Fukuoka representing theHeisei era such as receiving the “Special Heisei Memorial Award” in the 21stDeveloper & Tenant Award (“Senken Shimbun” newspaper).
・Reduction of environmental load through initiatives for energy and resourcesaving with control of outside air by CO2 sensor, introduction of LED lightingand system for recycling water.
・Consideration to the diversity and comfort of visitors with amenities such astables for changing diapers and a breastfeeding room, accommodation offoreign visitors, installation of a charging station for electric vehicles.
・Installation of emergency generator and water shut plate, 24-hour security,
disaster and safety preparedness, heat-island measures, consideration togreenery and biodiversity.

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