June 25, 2020
Provisional translation only
Fukuoka REIT Corporation
1-2-25 Sumiyoshi, Hakata Ward, Fukuoka City
Etsuo Matsuyuki
Executive 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 management company
to which the company entrusts the management of its assets, decided to acquire the following domestic realestate today.
1. Summary of Acquisition
Property name

UseLocation

Acquisition Price(planned)

Acquisition Date(scheduled)Home Plaza NAFCO
at Park Place Oita

Retail2-Chome, Koen-dori Nishi,
Oita City, Oita

990 mm yen

July 1, 2020

2. Reason for Acquisition
FRC invests primarily in retail facilities with excellent design and entertainment qualities and Class A officebuildings, focusing on the Fukuoka and Kyushu region. Other than retail facilities and office buildings, FRCalso 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 securestable earnings over medium- to long-term periods. By incorporating such properties into its portfolio, FRC
intends to pursue risk diversification within the region.
Home Plaza NAFCO at Park Place Oita (the "Property") , the property to be acquired, is located to the southeastof the center of Oita City in an area with abundant greenery and primarily comprising residential districts. Theproperty is adjacent to Park Place Oita, a large-scale retail facility which attracts customers from an extensive
trade zone and is owned by FRC. Accordingly, synergistic effects between the facilities can be expected.
This acquisition utilizes a pipeline with the sponsor, Fukuoka Jisho Co., Ltd., and FRC anticipates that theacquisition of the property will contribute to further enhancing its portfolio and securing stable earnings intothe future.

- 1 -3. Detail of Property for Acquisition(1) Overview of Acquisition
1) Property to be acquired: Real estate trust beneficiary interest(Trustee: Sumitomo Mitsui Trust Bank, Limited (planned))
2) Property name: Home Plaza NAFCO at Park Place Oita
3) Acquisition price (planned) (Note1): 990 million yen
4) Appraisal value: 1,100 million yen (as of June 1, 2020)
5) Acquisition cap rate (Note2): 6.1%
6) Acquisition date (scheduled): July 1, 2020
7) Seller: Fukuoka Jisho Co., Ltd.
8) Funding: Cash on hand
9) Payment method: Lump-sum payment upon delivery(Note1) The acquisition price (planned) does not include acquisition expenses, amounts equivalent to the settlement ofproperty taxes and city planning taxes, consumption taxes on the building and other expenses.
(Note2) The acquisition CAP is calculated by the direct capitalization method: NCF/ The acquisition price (planned) x
100 (%) of the appraisal assessment.

(2) Points Valued in Deciding on the Property
1) Location conditions
The property is located to the southeast of the center of Oita City in an area where integrated
development including that for a comprehensive sports park, shops, housing complex, and more istaking place. We believe the property to be relatively competitive due to synergy it shares with theadjacent large-scale retail facility Park Place Oita which attracts additional customers from an extensive
trade zone. Many wealthy people and families with small children reside in the surrounding residential
area of Park Place Oita Koen-dori, and thus demand can be expected from local users as well.
2) Building Properties etc
The property has a site area of 10,255.26 m2, a gross floor area of 7,023.01 m2 for the building, and aparking lot that can accommodate 88 vehicles within the site. It is leased by NAFCO Co., Ltd. which
offers a variety of products including “materials, DIY, and gardening supplies,” “daily articles,” and“furniture and interior decoration goods.” NAFCO Co., Ltd. operates mainly in western Japan with 358
stores in 34 prefectures as of the end of March 2020 and is a well-known home center even in Oita
Prefecture. In addition, sales at existing stores in April and May 2020 disclosed by NAFCO Co., Ltd.
were higher than that in the previous year.
(3) Overview of the Property
Property name
Type of the specified asset
Acquisition price (planned)
TrusteeTerm of real estate trust
Location (address)

Land

Home Plaza NAFCO at Park Place Oita
Real estate trust beneficiary interest
990 million yen
Sumitomo Mitsui Trust Bank, Limited (planned)
From June 1, 2020 to June 30, 2030
3-2, 2-Chome, Koen-dori Nishi, Oita City, Oita
Area
10,255.26 ㎡
ZoningCommercial area
Floor area ratio
300%
Building coverage
90%
Type of ownership
Ownership- 2 -Structure/ floor
Building

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

Special notations

Status of leasing

Steel-framed with zinc-coated steel roof, 2floors and 1 below
September 30, 2007

Built
Total floor area
7,023.01 ㎡
UseShops
Type of ownership
Ownership
Fujita Corporation Kyushu Branch
Fujita Corporation Kyushu Branch First-class Architect Office
Fujita Corporation Kyushu Branch First-class Architect OfficeJAPAN ERI CO., LTD.
1,100 million yen (as of June 1, 2020)
Japan Real Estate Institute
None
FJ. Entertainment Works Co., Ltd. (planned)
4.6% (based on the assessment by Tokio Marine & Nichido Risk
Consulting Co., Ltd.)The following findings have been confirmed regarding the building ofthe property. They shall be remedied by FJ. Entertainment Works Co.,
Ltd. by the end of August 2020 based on the real estate managementand disposition trust agreement for the property concluded among FJ.
Entertainment Works Co., Ltd., Fukuoka Jisho Co., Ltd., andSumitomo Mitsui Trust Bank, Limited as of June 1, 2020. FRC plans
to conclude an agreement with Fukuoka Jisho Co., Ltd. on July 1,2020 for the transfer of the beneficial interest in the property to berecovered by Fukuoka Jisho Co., Ltd. at the responsibility and bearing
the expenses.
There will be no change even after the acquisition by FRC.
・Non-lighting of standby power lamp for hazard prevention devices offire shutters
・Non-implementation of load operation or internal inspection ofemergency power generators
Total number of tenants 1
Tenant’s name
NAFCO Co., Ltd.
Type of contract
Fixed-term lease
Term of contract
From Nov. 2007 to Oct. 2027
Remaining lease term
7 years 4 months
Contract rents
Not disclosed (Note1)
Security deposits
Not disclosed (Note1)
Leasable floor space
7,376.03 ㎡(Note2)
Total leased floor space 7,376.03 ㎡(Note2)
Occupancy rate
100.0% (Note3) as of June 1, 2020

*All figures for space, floor space, location, use, structure etc. are based on the indications on the registry.

- 3 -* The earthquake PML figure is based on the earthquake risk assessment report by the indicated estimator. The figure isa representation of the reporter’s opinion, and does not guarantee the accuracy of its content.
(Note1) The figures are not disclosed as no consent to disclosure has been obtained from the tenant.
(Note2) The leasable area indicates the area that can be leased to the end tenants. The total leased area indicates the sumof the areas designated in the lease agreements that concluded with the end tenants as at June 1, 2020.
(Note3) The figure indicates the ratio of the total leased area to the leasable area, and has been rounded to the firstdecimal place.

(4) Overview of Building Status Assessment Report

Surveyor

Date of Survey report

Urgent and shortterm repair andreplacement
expenses (Note1)

Tokio Marine & Nichido
Risk Consulting Co., Ltd.

April 1, 2020

－Long-term repair
and replacement
expenses (Note2)

3 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/year for 12 years. The indicated figure has been rounded off to the nearest million yen.

(5) Profile of Previous Owners
NameLocation

Fukuoka Jisho Co., Ltd.
2-25, 1-chome, Sumiyoshi, Hakata Ward, Fukuoka City
Real estate development, leasing, brokerage and property
Nature of business
management
Representative title and nameIchiro Enomoto, President and C.E.O
Specified capital
100 mm yen
Established
July 19, 1961
Total assets
167,104 mm yen (as of May 31, 2019)
Total net assets
61,753 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 company,
Fukuoka Realty Co., Ltd., with equity of 50%. The company also
Capital relationshipowns 72,386 investment units of FRC (As of February 29, 2020).
The seller has dispatched two part-time directors to the asset
Personnel relationshipmanagement company.
The seller has such transactions with FRC and the asset managementcompany as property management services, brokerage of real estatetransactions and lease of properties owned by FRC. There is no
Business relationshiprelationship to note between the affiliates or affiliated companies ofthe seller and the affiliates or affiliated companies of FRC and theasset management company.
The seller falls within the scope of related parties of FRC. The seller
falls within the scope of parent company, etc., designated in theRelated parties or not
Financial Instruments and Exchange Act, of the asset managementcompany.

- 4 -(6) Profile of Previous Owners
Property name
Status of previousowners

Company name

Relationshipwith special
interested parties

Background andreason ofacquisition, etc.

Home Plaza NAFCO at Park Place Oita
Owner

Previous owner

Third previousowner

Fukuoka Jisho Co.,Ltd.

FJ. EntertainmentWorks Co., Ltd.

Park Place OitaCo., Ltd.

A shareholder of
the asset
managementcompany(with equity of50%)
Due to the disposalof owned assets
associated with thedividend in kindand reorganizationof group company

Subsidiary of ashareholder(Fukuoka JishoCo., Ltd.) of theasset managementcompany

Subsidiary of ashareholder(Fukuoka JishoCo., Ltd.) of theasset managementcompany－Acquired throughthe absorptiontype merger of thethird previous
owner

For the purpose ofdevelopment－Acquisition price－ (Note1)－ (Note2)

Acquisition
timingJune 2020

June 2017

Descriptions areomitted because
the property has
been owned by thethird previousowner for morethan a year
Sept. 2007
(Newly built)
Sept. 1998
(Land)

Fourth previousowner
Those otherthan a party
that has specialinterests－－(Note 1) The owner before the previous owner is a wholly owned subsidiary of the previous owner. Not applicable as
the acquisition by the previous owner was made due to the dividend in kind by the owner before the previous owner.
(Note 2) Not applicable as the acquisition was made through an absorption-type merger.

(7) Sales Agent ProfileNone(8) Form of Payment
FRC is scheduled to pay the acquisition fee in full on the scheduled acquisition date of the property(July 1, 2020) through 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 theasset management company. Accordingly, the asset management company has conducted discussions atand obtained approvals of its Investment Management Committee, Compliance Assessment Committeeand Board of Directors concerning the acquisition price and other terms of the property, pursuant to the- 5 -regulations and other rules of the asset management company.
2) FRC plans to conclude a management consignment agreement with FJ. Entertainment Works Co.,
Ltd. to entrust 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
June 25, 2020
Decision of acquisition
July 1, 2020
Conclusion of agreement (scheduled)
July 1, 2020
Payment (scheduled)
July 1, 2020
Delivery of the property (scheduled)
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. Overview of Appraisal Report
Property name

Home Plaza NAFCO at Park Place Oita

Appraisal value:

1,100,000,000 yen

Appraiser

Japan Real Estate InstitutePricing dateJune 1, 2020
CategoryFigures

Income Capitalization Approach Value

Overview, etc.

1,100,000,000

Value Calculated Using the Direct Capitalizatio

1,110,000,000

Gross Operating Revenue
M aximum Gross Operating Revenue
Shortfall Attributed to Vacancies
Operating Expenses
M aintenane and M anagement Fees
Utilities Expenses
Not diclosed (Note)
Repair and M aintenance Expenses
PM Fees
Tenants' Leasing Expenses etc.
Taxes and Fees
Damage Insurances
Other Expenses
Net Operating Income

61,817,000

Profit through M angement of Temp
Not diclosed (Note)
Capital Expenditure Reserve
Net Cash Flow

60,010,000

Capitalization Rate

5.4%

Value through DCF mothod

1,090,000,000

Discount Rate

Refered to investment yields of similar real estate and5.3% assessed comprehensively considering the individuality ofthe property.

Termial Cap Rate

5.7%

Value through cost method

1,160,000,000

Percentage of Leased Land

65.9%

Percentage of Building

34.1%

Other matters noted by the appraiser ininconducting appraisal

Refered to transaction yields of similar real estate andassessed in consideration of future uncertainties.

Not listed(Note) This is information for which consensus for disclosure has not been obtained from the tenant or which is computable, and informationof which disclosure would undermine trust relationship with the tenant causing disadvantages such as not being able to maintain a lease
contract over the long term, eventually possibly harming the interests of the unitholders. Therefore, we have decided not to disclose theinformation.

*Fukuoka REIT Corporation’s website is https://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: List of FRC’s Portfolio
Use

Property 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 Center
Tenjin 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

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
Dec. 7, 2018
Mar. 28, 2014
Mar. 27, 2015
Jun. 1, 2017
Jun. 30, 2020
－Acquisition Price(planned) (mm yen)

Investment
Ratio(Note1)(Note2)32,00028,70019,610
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
1,700
201,959

15.8%
14.2%
9.7%
3.3%
5.0%
2.6%
1.2%
0.6%
1.2%
1.8%
2.6%
7.2%
5.5%
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%
4.0%
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 and the 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 Club NAS Park Place Oita acquired on September 1, 2016, Park Place Oita Daiichi Parking acquired on July 6, 2018, andHome Plaza NAFCO at Park Place Oita will be acquired on July 1, 2020.

- 12 -