April 13, 2020
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
Fukuoka REIT Corporation Concludes Agreement to Purchase a New Property
Fukuoka REIT Corporation (“FRC”) announces that Fukuoka Realty Co., Ltd, an asset managementcompany to which the company entrusts the management of its assets, decided to acquire the following
domestic real estate today.
1. Summary of Acquisition
Property name

UseLocation

Acquisition Price(planned)

Acquisition Date(scheduled)

Higashi Hie BusinessCenter Ⅲ

Office4-Chome, Higashi Hie,
Hakata Ward, Fukuoka City3,290 mm yen

May 29, 2020

2. Reason for Acquisition
FRC invests primarily in retail facilities with excellent design and entertainment qualities and Class A
office buildings, focusing on the Fukuoka and Kyushu region. Other than retail facilities and officebuildings, FRC also works to acquire properties which, by capitalizing on its community-based strengths
to establish appropriate management structures for each property and through other measures, will allow
it to secure stable earnings over medium- to long-term periods. By incorporating such properties into its
portfolio, FRC intends to pursue risk diversification within the region.
The Higashi Hie Business Center III ("Property"), which is to be acquired this time, is an office building
with high specifications and completion in March, 2020 that is close to the entrance of the "Higashi Hie"
Station, which is located between the "Hakata" Station and the "Fukuoka Airport" Station of the Fukuoka
City Subway Kuko Line, and has an excellent accessibility.
FRC anticipates that the acquisition of the property will contribute to further enhancing its portfolio andsecuring stable earnings into the future.

- 1 -3. Detail of Property for Acquisition(1) Overview of Acquisition
1) Property to be acquired (Note1): Real estate trust beneficiary interest(Trustee: Mitsubishi UFJ Trust and Banking Corporation (planned))
2) Property name: Higashi Hie Business Center III
3) Acquisition price (planned) (Note2): 3,290 million yen
4) Appraisal value: 3,290 million yen (as of April 1, 2020)
5) Acquisition cap rate (Note3): 4.4%
6) Acquisition date (scheduled): May 29, 2020
7) Seller: Fukuoka Jisho Co., Ltd
8) Funding: Borrowings (Note4) and cash on hand
9) Payment method: Lump-sum payment upon delivery10) Others: The property falls under forward commitment, etc. For details, see 3. (11) below.
(Note1) Although the asset to be acquired is in the form of actual real estate at present, the current owner plans toplace it in a trust for the trustee and FRC plans to acquire the beneficiary interest in said trust by the planned acquisition
date.
(Note2) The acquisition price (planned) does not include acquisition expenses, amounts equivalent to the settlementof property taxes and city planning taxes, consumption taxes on the building and other expenses(Note3) The acquisition CAP is calculated by the direct capitalization method: NCF/ The acquisition price (planned)
x 100 (%) of the appraisal assessment.
(Note4) For details, please refer to “Notice Conerning Borrowing of Funds” announced today.

(2) Points Valued in Deciding on the property
1) Location conditions
The property is located near the entrance of the “Higashi-Hie” Station, a station between “Hakata”
Station and “Fukuokakuko (Airport)” Station on the Fukuoka City Subway Kuko Line and boasts
high transport convenience being approximately 2 minutes to “Hakata” Station and 3 minutes to“Fukuokakuko (Airport)” Station via subway. In addition, there is the “Hakata-eki Higashi” ramp ofthe Fukuoka Urban Expressway nearby allowing for smooth access by car.
The Higashi-Hie area where the property is located has seen several office building developments inaddition to the property since the completion of Higashi Hie Business Center in February 2009,against the backdrop of excellent transportation infrastructure such as National Route 3 and Fukuoka
City Subway as well as proximity to Hakata Station and Fukuoka Airport. On top of these, contract
rent has been on an upward trend, gaining competitiveness as an office area.
2) Building properties etc.
The Property is equipped with a base floor space of approximately 496 ㎡ (approximately 150
tsubo), a ceiling height of 2,800mm, an OA floor (100mm), individual air conditioning (proprietarysections), two elevators, 40 multistory parking lots, three flat parking lots, and 20 bicycle parking
lots.The rental room has a roughly rectangular room shape, and because the rental room has nopoles, it can be flexibly divided into sections, allowing tenant leasing according to various needs.
In the Hakata Station East area, only two buildings were built within 10 years, and many of thesebuildings were completed before year 2000. As a result, the property, completed in March 2020, ishighly competitive.
(3) Overview of the property
Property name
Higashi Hie Business Center III- 2 -Property to be acquired
Acquisition price
TrusteeTerm of real estate trust
Location (address)

Land

Building

Constructor
Designer
Building design officeengaged in structural
engineering data
Organization that
authorized building
construction
Appraisal value
Appraiser
Collateral after
acquisition
Property Management
Company
Earthquake PML

Special notations

Status of leasing

Real estate trust beneficiary interest
3,290 million yen
Mitsubishi UFJ Trust and Banking Corporation (planned)
From May 29, 2020 to May 31, 2040
4-45 Higashi Hie, Hakata Ward, Fukuoka City
900.51 ㎡
AreaZoning
Commercial rea
Floor area ratio
400%
Building coverage
80%
Type of ownership
Ownership
Structure/ floor
Main building: Steel structure land roof 7 floors
Attached building: Steel-framed, alloy-plated,steel-plated flat building
Built
March 23, 2020
Main building: 3,711.51 ㎡
Total floor area
Attached building: 44.30 ㎡
Use
Main: Office building
Attached building: Parking
Type of ownership
Ownership
ARISAWA KENSETSU CO., LTD.
ARISAWA KENSETSU CO., LTD. First class registered architect office
Structure of Y's Co., Ltd., First class registered architect office

Bureau Veritas Japan
3,290 million yen (As of April 1, 2020)
Tanizawa Sogo Appraisal Co., LtdNoneFukuoka Jisho Co., Ltd (planned)
2.3% (based on the assessment by Tokio Marine & Nichido Risk Consulting Co., Ltd)・Although some minor uncompleted works have been confirmed on thebuilding of the Premises, they are expected to be settled/delivered with theSeller at the Seller's or the Enforcement Company's responsibility andexpense. The contents of the uncompleted construction work do not affectthe management and operation of the building.
・The property falls under forward commitment, etc. For details, see 3. (11)below.
Total number of4
tenants
Total rent income
156 mm yen (Note1)(annually)
Security deposits
148 mm yen (Note2)
2,981.14 ㎡ (Note3)
Total leasable area
- 3 -

Total leased area
Occupancy rate

2,631.42 ㎡ (Note3)
88.3% (Note4) (as of April 1, 2020)*All figures for area, use, structure, etc. are based on the indications on the registry.
*The earthquake PML figure is based on the earthquake risk assessment report by the indicated appraiser. The figure
is a representation of the reporter’s opinion, and does not guarantee the accuracy of its content.
(Note1) The figure is obtained by multiplying the total revenue from monthly rent stated in the lease agreements
having been concluded with the tenants as of April 1, 2020. The amount is rounded to the nearest million yen. Parking,etc. are not included.
(Note2) The figure indicates the total of the amounts stated in the lease agreements having been concluded withthe tenants as of April 1, 2020. The amount is rounded to the nearest million yen. Parking, etc. are not included.
(Note3) Total leasable area indicates the area leasable to tenants while total leased area indicates the total of contracted
areas stated in the lease agreements having been concluded with the tenants as of April 1, 2020. Parking, etc. are notincluded.
(Note4) The figure indicates the ratio of the total leased area to the leasable area, and has been rounded to the firstdecimal place. Parking, etc. are not included.

(4) Overview of Building Status Assessment ReportSurveyor

Tokio Marine & Nichido
Risk Consulting Co., Ltd.

Date of Survey report

March 18, 2020

Urgent and short-termLong-term repair andrepair and replacement

replacement

expenses (Note1)

expenses (Note2)-2 million yen(Note1) Urgent and short-term repair and replacement expenses refer to the amount indicated in the report as repair
and replacement expenses that will be required urgently or within roughly one year.
(Note2) Long-term repair and replacement expenses refer to the amount indicated in the report as average repair andreplacement expenses for 12 years. The indicated figure has been rounded off to the nearest million yen.

(5) Profile of Previous Owners
NameFukuoka Jisho Co., LtdLocation
2-25, 1-chome, Sumiyoshi, Hakata Ward, Fukuoka City
1. Engaged in urban development and Leasing
Nature of business
2. Operating Management of retail facilities and consulting business3. Insurance agency
Representative title
Ichiro Enomoto, President and C.E.O
Specified capital
100 mm yen（As of April 13, 2020）
Established
July 19, 1961
Total assets
167,104 mm yen (as of May 31, 2019)
Total net assets61,753 mm yen (as of May 31, 2019)
Relationship with FRC and the asset management company
The seller is a shareholder of FRC’s asset management
Capitalcompany, Fukuoka Realty Co., Ltd., with equity of 50%. The
relationshipcompany also owns 72,386 investment units of FRC (As ofFebruary 29, 2020).
Personnel
The seller has dispatched two part-time directors to the asset
relationshipmanagement company.
Business
The seller has such transactions with FRC and the asset
relationshipmanagement company as property management services,- 4 -Related parties
or notbrokerage of real estate transactions and lease of properties
owned by FRC. There is no relationship to note between theaffiliates or affiliated companies of the seller and the affiliates oraffiliated companies of FRC and the asset managementcompany.
The seller falls within the scope of related parties of FRC. The
seller falls within the scope of parent company, etc., designatedin the Financial Instruments and Exchange Act, of the asset
management company.

(6) Profile of Previous Owners
Property name
Status of previous owners

Higashi Hie Business Center III
Owner

Previous owner
Except relationship withspecial interested parties

Company name

Fukuoka Jisho Co., LtdRelationshipwithspecial interested parties

A shareholder of themanagement company(with equity of 50%)

Background and reasonof acquisition, etc.

For the purpose of development

Acquisition price

Acquisition timing

asset

Descriptions omitted because
there is no owner before previous
owner for the building
September, 2017 (land)
March, 2020
(building newly constructed)----(7) Sales Agent Profile
None(8) Form of payment
FRC is scheduled to pay the acquisition fee in full on the scheduled acquisition date of the Property(May 29, 2020) Proceeds from issuance of investment units through borrowings, and cash on hand.
(9) Transaction with Interested Parties
1) Fukuoka Jisho Co., Ltd., the seller of the Property, falls within the scope of interested parties of
the asset management company. Accordingly, the asset management company has conducteddiscussions at and obtained approvals of its Investment Management Committee, Compliance
Assessment Committee and Board of Directors concerning the acquisition price and other terms of
the property, pursuant to the regulations and other rules of the asset management company.
2) FRC plans to conclude a management consignment agreement with Fukuoka Jisho Co., Ltd. toentrust property management of the property. The same discussions and approvals as in the above 1)
have been conducted/obtained for conclusion of the agreement.
(10) Acquisition on Schedule
April 13, 2020
Decision of acquisition- 5 -April 13, 2020
May 29, 2020
May 29, 2020

Conclusion of agreement
Payment (scheduled)
Delivery of the property (scheduled)(11) Financial Impact on FRC in the Event of Failure to Fulfill Forward Commitment, etc.
The transaction agreement for the Property falls under the category of forward commitment, etc. (apostdated transaction agreement where the settlement and delivery are to take place one month or more
after the conclusion of agreement as well as other similar agreements) as provided by the“Comprehensive
Guidelines for Supervision of Financial Instruments Business Operators, etc.” set by the Financial
Services Agency. This Assignment Agreement may be terminated without payment of penalty in theevent that the purpose of the Agreement is unavailable for reasons not attributable to the Investment
Corporation. The Investment Corporation shall not pay the Deposit under this Assignment Agreement.
4. Outlook
The impact of the transaction on FRC’s operating forecast for the fiscal period ending August 2020 (March 1,2020 – August 31, 2020) and for the fiscal period ending February 2021 (September 1, 2020 - February 28,2021), which were announced in the “Earnings Briefing for the Period Ended February 2020” dated April 13,
2020 is considered to be minimal, and FRC will not revise the forecast at present.

- 6 -5. Outline of appraisal report
Property Name

Higashi Hie Business Center Ⅲ

Appraisal value

3,290,000 thousand yenAppraiser

The Tanizawa Sogo Appraisal Co., LtdPricing date

April 1, 2020
CategoryFigures

Income Capitalization Approach Value

Reasons, etc.

3,290,000 thousand yen

Value Calculated Using the Direct Capitalization Method

3,330,000 thousand yen

Gross Operating Revenue

191,406 thousand yen

Maximum Gross Operating Revenue

197,534 thousand yen Based on the market price

Shortfall Attributed to Vacancies

6,127 thousand yen

Operating Expenses

47,776 thousand yen
Based on the similar cases of other properties
and the contract

Maintenane and Management Fees・PM Fees（Note）

14,626 thousand yen

Utilities Expenses

14,667 thousand yen Based on the similar cases of other properties

Repair and Maintenance Expenses

1,000 thousand yen

Tenants' Leasing Expenses etc.

1,442 thousand yen Assumed annual 10.0% tenant replacement

Taxes and Fees

14,582 thousand yen

Based on the engineering report and similarcases of other properties

Based on the property taxes notice and similarcases of other properties

Damage Insurances

500 thousand yen Based on the estimate

Other Expenses

957 thousand yen Based on the similar cases of other properties
143,630 thousand yen

Net Operating Income
Profit through Mangement of Temporary Deposits, etc.

1,695 thousand yen

Capital Expenditure Reserve2,000 thousand yen

Net Cash Flow

143,325 thousand yen
Evaluated considering the location, etc. of the4.3% property, future uncertainties, comparablecases, etc.

Capitalization Rate
Value through DCF mothod

3,270,000 thousand yen

Discount Rate

4.1%

Termial Cap Rate

4.5%

Value through cost method

3,110,000 thousand yen

Percentage of Leased Land

56.7%

Percentage of Building

43.3%

Other matters noted by the appraiser in inconducting appraisal

Not listed(Note) Since disclosing the amounts of maintenance and management fees and PM fee separately could affect other transactions of the parties
entrusted with the building management and property management, eventually posing a problem for FRC’s efficient entrustment of affairs
and possibly damaging the interests of unitholders, maintenance and management fees and PM fee are indicated as a sum.

*FRC’s website is http://www.fukuoka-reit.jp/eng/- 7 -(Attachments)
Reference 1: Outlook of the Property
Reference 2: Location of the Property
Reference 3: Map of FRC’s Portfolio
Reference 4: List of FRC’s Portfolio- 8 -Reference 1: Outlook of the Property- 9 -Reference 2: Location of the Property- 10 -

Reference 3: Map of FRC’s Portfolio- 11 -

Reference 4: FRC Portfolio List
UseProperty Name

Acquisition Date(scheduled)

RetailOffice buildings
OthersCanal 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)
Canal City Business Center Building
Gofukumachi Business Center
Sanix Hakata Building
Taihaku Street Business Center
Higashi Hie Business CenterTenjin Nishi-Dori Center Building
Tenjin North Front Building
Higashi Hie Business Center II
Higashi Hie Business Center III
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
Total of all properties

Acquisition Price(planned) (mm yen)

Investment
Ratio(Note1)(Note2)

Nov. 9, 2004
Mar. 2, 2011
Nov. 9, 2004(Note3)Jul. 1, 2005
Mar. 1, 2018
Sep. 28, 2006
Nov. 30, 2006
Sep. 3, 2007
Feb. 1, 2008
Mar. 27, 2008
May 1, 2015
Nov. 9, 2004
Nov. 9, 2004
Sep. 30, 2005
Mar. 16, 2006
Mar. 13, 2009
Feb. 1, 2013
Mar. 28, 2013
Mar. 1, 2018
May 29, 2020
Sep. 1, 2006
Dec. 20, 2007
Mar. 1, 2012
Mar. 1, 2013
Nov. 4, 2014
Mar. 1, 2013
December 7, 2018
Mar. 28, 2014
Mar. 27, 2015
Jun. 1, 2017
Jun. 30, 2020
－32,000
28,70018,620
6,633
10,000
5,300
2,400
1,130
2,500
3,550
5,250
14,600
11,200
4,400
7,000
5,900
2,600
2,800
4,230
3,290
2,060
1,111
1,280
2,800
1,100
1,530
2,835
1,250
8,150
5,050
1,700200,969

15.9%
14.3%
9.3%
3.3%
5.0%
2.6%
1.2%
0.6%
1.2%
1.8%
2.6%
7.3%
5.6%
2.2%
3.5%
2.9%
1.3%
1.4%
2.1%
1.6%
1.0%
0.6%
0.6%
1.4%
0.5%
0.8%
1.4%
0.6%
4.1%
2.5%
0.8%
100.0%(Note1) All figures in the Acquisition Price (planned) column indicate the acquisition price written in the sales agreement between FRC andthe seller, and exclude charges, taxes and other expenses.
(Note2) The ratio are rounded off to one decimal places.
(Note3) Park Place Oita acquired on November 9, 2004, and later on, the adjacent land (parking (land)) acquired on May 28, 2015, Sports ClubNAS Park Place Oita acquired on September 1, 2016 and Park Place Oita Daiichi Parking acquired on July 6, 2018.

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