June 23, 2022
Provisional translation only

Fukuoka REIT Corporation
1-2-25 Sumiyoshi, Hakata Ward, Fukuoka City
Zenji Koike
Executive Director(Securities Code: 8968)
Asset Management Company:
Fukuoka Realty Co., Ltd.
1-2-25 Sumiyoshi, Hakata Ward, Fukuoka City
Zenji Koike
President and CEO
Inquiries:
Hiroyuki Ayabe
Executive Officer and General Manager
Finance Department
TEL: +81-(0)92-272-3900

Notice Concerning Partial Amendments to the Asset Management Company’s Internal Regulations(Asset Management Guidelines)
Fukuoka REIT Corporation (FRC) announced that Fukuoka Realty Co., Ltd., the asset management company towhich FRC entrusts management of its assets, today decided to partly amend the asset management guidelines(the “Asset Management Guidelines”), its internal regulations, as described below (the “Amendments”).
1. Reasons and Major Points of Amendments to the Asset Management Guidelines
FRC aims to invest in a variety of properties, including retail facilities, office buildings, and other types (logistics,residences, etc.), geographically limiting its target investment area to the Fukuoka and Kyushu area.
The Amendments will be made in order to create opportunities for FRC to acquire properties of higher quality, inlight of the current investment environment in which competition for acquisition of properties FRC aims to invest
in has been intensifying. The major point of the Amendments is, concerning investment in development properties,
clarification of the investment policy pertaining to properties under development/to be developed in the future.
For details of the Amendments, please refer to the attached “Comparison of the Asset Management Guidelines
before and after the Amendments.”
2. Date of the Amendments to the Asset Management Guidelines
June 23, 2022
3. OthersAn extraordinary report on this matter was submitted to the Kanto Local Finance Bureau as of June 23,2022.
4. Future Outlook
The partial amendments to the Asset Management Guidelines will have no impact on the operating results ofFRC.

*FRC’s website is Fukuoka REIT Corporation (fukuoka-reit.jp)-1-Attachment:
Comparison of Asset Management Guidelines before and after the Amendments(Note) The following table describes only the parts with amendments, for both before and after the amendments, and thedescriptions for other parts are omitted. Furthermore, underlined parts are amended.

BeforeAfter

1. Basic Asset Management Policy for Fukuoka REIT

1. Basic Asset Management Policy for Fukuoka REITCorporationCorporation(1) Management Philosophy(1) Management Philosophy

1) As a rule, Fukuoka REIT Corporation (FRC) sets

1) As a rule, Fukuoka REIT Corporation (FRC) sets

the entire Kyushu region centering on Fukuoka

the entire Kyushu region centering on Fukuoka(including Okinawa Prefecture) and Yamaguchi(including Okinawa Prefecture) and Yamaguchi

Prefecture (the “Fukuoka and Kyushu areas”) as its

Prefecture (the “Fukuoka and Kyushu areas”) as its

investment target area.

investment target area.

2) With its strength in knowing the local characteristics

2) With its strength in knowing the local characteristics

of real estate, which is a region-specific business,of real estate, which is a region-specific business,

FRC invests in real estate for rent in theFRC invests in real estate for rent in the above-abovementioned investment target area. Throughmentioned investment target area. Through such,

such, FRC aims to maximize the profit of its

FRC aims to secure the best interests of its

unitholders by providing stable earnings over theunitholders by providing stable earnings over the

medium to long term. (Our Mission)

medium to long term. (Our Mission)

3) FRC focuses on Kyushu, particularly the Fukuoka

3) FRC focuses on Kyushu, particularly the Fukuoka

metropolitan area, and manages assets by utilizing

metropolitan area, and manages assets by utilizing

the information and expertise of the asset

the information and expertise of the asset

management company knowledgeable in individual

management company knowledgeable in individual

circumstances of the Kyushu area. (Act Localcircumstances of the Kyushu area. (Act Local(management that leverages geographical(management that leverages geographicaladvantages))advantages))

FRC seeks to maximize the profit of its unitholders

FRC seeks to secure the best interests of its unitholders

while securing stable earnings over the medium towhile securing stable earnings over the medium tolong term, based on the strengths including thelong term, based on the strengths including thefollowing realized as a result of the above.

following realized as a result of the above.

(a) Speed and density of information(a) Speed and density of information(b) Feel for the local market (quickly catching(b) Feel for the local market (quickly catching

information on properties, land characteristics,

information on properties, land characteristics,

tenants, etc.)

tenants, etc.)(c) Powerful local network across a broad area(c) Powerful local network across a broad area

including administrative and economic authorities

including administrative and economic authorities(d) Real estate management structure with a long-term(d) Real estate management structure with a long-term

commitment to the local community (risk responses

commitment to the local community (risk responses

based on swift decision-making)based on swift decision-making)(2) Types, purpose and scope of assets for investment(2) Types, purpose and scope of assets for investment

5) In addition to the specified assets set forth in 2) to

5) In addition to the specified assets set forth in 2) to

4) above, FRC may, with regard to investment in4) above, FRC may, with regard to investment inreal estate, etc., invest in the following assets when-2-real estate, etc., invest in the following assets whennecessary.

necessary.
(Omitted)(Omitted)(f) Carbon dioxide equivalent quota and other similar(f) Carbon dioxide equivalent quota and other similar

items based on Article 2, Paragraph 7 of the Act on

items based on Article 2, Paragraph 6 of the Act on

Promotion of Global Warming Countermeasures

Promotion of Global Warming Countermeasures(Act No. 117 of 1998, as amended) or emission(Act No. 117 of 1998, as amended) or emission

rights (including emission rights pertaining torights (including emission rights pertaining togreenhouse gas).

greenhouse gas).
(3) Investment targets and their acquisition methods(3) Investment targets and their acquisition methods

2) Investment type2) Investment typeAs FRC limits its investment target area, it flexibly

As FRC limits its investment target area, it flexibly

targets all properties in terms of investment typetargets all properties in terms of investment type(with a comprehensive portfolio). Since(with a comprehensive portfolio). Since risks/returns

risks/returns differ for each investment type,

differ for each investment type, diversification isdiversification is achieved. As a rule, investment

achieved. As a rule, investment ratio for eachratio for each investment type shall be within theinvestment type shall be within the following

following investment ratios. When the investment

investment ratios.

target is land with leasehold interest, classificationof purpose of use shall be decided by reference tothe purpose of use of the buildings (including
those to be developed) on the land.
3) Method of acquisition of investment target(c) Investment in development properties

3) Method of acquisition of investment target

FRC may invest in properties under(c) Acquisition of new development properties withdevelopment/to be developed in the future

the support of the Fukuoka Jisho Group(“development properties”) to secure opportunities

FRC advances acquisition of new development

to acquire quality properties.

properties with the support of the Fukuoka Jisho

Specifically, first, when the property is aGroup, which is centered on Fukuoka Jisho Co.,development property with the support of theLtd. and has strong development/management

Fukuoka Jisho Group or a development property

capabilities across Kyushu as a comprehensive

under a tie-up with an outside developer, etc. and ifdeveloper. When the Fukuoka Jisho Group newly

FRC is not the ordering party of the contracts

develops retail facilities, etc. in the investment

pertaining to the development of residential land or

target area and establishes a business foundation atconstruction of buildings, FRC may conclude aan early stage with steady facility operation, once itsale/purchase contract and invest as long as therealizes securement of stable rental revenue, FRC

following conditions of (i) through (iii) are

may conclude a real estate sale/purchase contract

fulfilled. Concerning the conclusion of theeven for properties yet to be operated or properties

sale/purchase contract, terms of cancellation,

to be constructed/under construction if theparticularly whether to specify the cancellation

following conditions are fulfilled.

penalty and the amount, and other matters shall be(i) Risks concerning completion/delivery of theconsidered. In addition, possible material impact

building have been eliminated on theon FRC’s financial base shall also be carefully

condition that delivery is made after

considered.

completion.

(i) Sufficient tenant occupancy after the start of-3-

(ii) Risks concerning the development site (soiloperation or completion is expected andcontamination, etc.) have been addressed.

stable earnings are expected be secured.

(iii) FRC shall not be liable for any risks(ii) Risks concerning completion/delivery of the

including legal compliance of the buildingbuilding have been eliminated on theafter completion. Specifically, FRC shallcondition that delivery is made after

develop/acquire excellent properties thatcompletion.

can be its investment target by formulating a(iii) Risks concerning the development site (soildevelopment program for retail facilities,contamination, etc.) have been addressed, andetc. with the Fukuoka Jisho Group, newly

FRC shall not be liable for any risks including

selecting land, setting up a project including

legal compliance of the building after

the building planning, construction andcompletion.

tenant leasing.

Secondly, when FRC is the ordering party of the(d) Acquisition of new development projects

contracts pertaining to the development ofthrough a tie-up with outside developers, etc.

residential land or construction of buildings, ifFRC may conclude a real estate sale/purchase

FRC or the beneficiary of the real estate trust

contract even for properties yet to be operated orbeneficiary interest owned by FRC acquires land

properties to be constructed/under construction if

for development site solely or jointly with a third

the following conditions are fulfilled. Concerning

party, and FRC, the beneficiary or the third party

the conclusion of the contract, terms ofconstructs a building as the ordering party of thecancellation, particularly whether to specify thecontracts pertaining to the development ofcancellation penalty and the amount, and otherresidential land or construction of buildings solely

matters shall be considered. In addition, possible

or jointly and then acquire the entirety or part ofmaterial impact on FRC’s financial base shallthe building, FRC may conclude a sale/purchasealso be carefully considered.

contract for acquiring land pertaining development(i) Sufficient tenant occupancy after the start ofproperties solely or jointly and conclude a contract

operation or completion is expected andpertaining to the development of residential land orstable earnings are expected be secured.

construction of buildings with FRC or the(ii) Risks concerning completion/delivery of thebeneficiary of the real estate trust beneficiarybuilding have been eliminated on theinterest owned by FRC as the ordering party, as

condition that delivery is made after

long as the investment does not have an excessivecompletion.

impact on the entire portfolio even fully taking into(iii) Risks concerning the development site (soilaccount the fact that the investment does notcontamination, etc.) have been addressed,

immediately generate cash flows, after careful

and FRC shall not be liable for any risks

evaluation of responses to risks concerning theincluding legal compliance of the building

development property (development risk,after completion.

permission/authorization risk, completion risk,
tenant risk, price fluctuation risk), interest rate
fluctuation risk during the development, risk ofoccurrence of major natural disasters, etc. as wellas comprehensive consideration of the impact fromsuch on the investment amount, construction
period, distribution and such, provided that thefollowing conditions of (i) through (vi) arefulfilled.
(i) Risks concerning the development site (soilcontamination, etc.) have been addressed.
(ii) Considering laws and regulations, etc.,
acquisition of building certification is-4-reasonably expected.
(iii) Building plans for which contracts can beconcluded have been drawn up.
(iv) Securement of tenants after completion isprobable.
(v) Fund procurement is probable, and theeconomics of procurement terms arereasonably expected.
(vi) As for development properties assumed to berebuilt, feasibility of rebuilding plan can beconfirmed taking into account theprobabilities of tenant move-outs, building
demolition and other factors.
2. Portfolio Building Policy for FRC

2. Portfolio Building Policy for FRC(1) Property investment standards(1) Property investment standards

Investment in

FRC is not expected to acquire land

Investment inWith regard to a development property

development

and construct a building by itself as adevelopmentof a third party, FRC may conclude a

projects

rule. However, with regard to a

projects

sale/purchase contract assuming theproperty being developed by a thirdacquisition after the completion of theparty, FRC may conclude a contract

building, after taking into account theassuming the acquisition after thecompletion/delivery risks.

completion of the building, after taking

Furthermore, FRC may acquire raw

into account the completion/delivery

land and construct a new building withrisks. FRC may also build an extension

FRC or the beneficiary of the real

to or expand retail facilities, etc. it

estate trust beneficiary interest owned

owns by itself.

by FRC as the ordering party, aftertaking into account various risks
associated with real estatedevelopment (development risk,permission/authorization risk,completion risk, tenant risk, pricefluctuation risk, interest rate
fluctuation risk during thedevelopment, risk of occurrence ofmajor natural disasters, etc.), as long as
such risk does not have an excessive
impact on the entire portfolio. In
addition, FRC may build an extension
to or expand properties it owns byitself.

Supplementary Provisions

Supplementary Provisions(Omitted)(Omitted)

The Asset Management Guidelines were revised as of

The Asset Management Guidelines were revised as ofJune 24, 2021.

June 24, 2021.
The Asset Management Guidelines were revised as of June23, 2022.

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