August 30, 2021

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
Zenji Koike
President and CEO
Inquiries:
Hiroyuki Ayabe
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 (Note)

UseLocation

Acquisition Price(planned)

Acquisition Date(scheduled)Hakata Chikushi-Dori
Center Building

Office2-Chome, Hakataekiminami,
Hakata Ward, Fukuoka City

4,320 mm yen

March 1, 2022(Note) Although the current name is different, the property name will be changed to “Hakata Chikushi-Dori Center
Building” after FRC acquires the property. For this reason, this press release uses the name of “Hakata Chikushi-Dori
Center Building”.

2. Reason for Acquisition
FRC invests in a diverse range of properties, including retail facilities, office buildings, and others(logistics facilities, residential properties, hotels, etc.) in the Fukuoka and Kyushu regions as its maininvestment target area. In March 2019, the management guidelines at the asset management company
were partially amended to modify the principle of the investment ratio in investment types, thereby
allowing for more flexibility when considering investment in office buildings and other properties(logistics facilities, residential properties, hotels, etc.). The acquisition of an office building is in linewith the revised investment policy.
The Chikushi-Dori Center Building (the "Property"), which is to be acquired this time, is located about aneight-minute walk from JR “Hakata” Station in an area where hotels and government offices areconcentrated. In addition, with a standard floor rental room area of over 240 tsubos, the property is highly
scarce given the surrounding area and is appealing to tenants across a wide range of industries.
The acquisition of the property is an acquisition from an external party and utilizes the information andknow-how of the asset management company, which is well versed in the individual circumstances of theFukuoka and Kyushu regions. FRC anticipates that the acquisition of the property will contribute tofurther enhancement of its portfolio and securing of stable earnings in 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:Undecide) (Note2)2) Property name:Hakata Chikushi-Dori Center Building3) Acquisition price (planned) (Note3): 4,320 million yen
4) Appraisal value:
4,540 million yen (as of August 1, 2021)
5) Acquisition cap rate (Note4):
4.7%6) Acquisition date (scheduled):
March 1, 2022
7) Seller:
Not disclosed (Note5)8) Funding:
Cash on hand and borrowings (Note6)9) Payment method:
For details, please see 3. (8) Form of payment below.
10) Others:
The transaction agreement for the property (the“Transaction Agreement”) falls under the category offorward commitment, etc. (a postdated transactionagreement where the settlement and delivery are to takeplace one month or more after the conclusion of agreement
as well as other similar agreements; the same hereinafter).
For details, please see 3. (3) Overview of the Property to beacquired "Special notations" column 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 trustee is yet to be determined at this point in time and will be announced once determined.
(Note3) 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.
(Note4) The acquisition CAP is calculated by the direct capitalization method: NCF/ The acquisition price (planned)
x 100 (%) of the appraisal assessment.
(Note5) The name of the seller is not disclosed as no consent to disclosure has been obtained from the seller.
(Note6) The detail of the borrowings is yet to be determined at this point in time and will be announced oncedetermined.

(2) Points Valued in Deciding on the property
1) Location conditions
The property is located about an eight-minute walk from JR “Hakata” Station. The property faces
Chikushi-dori avenue, a street that is relatively highly regarded in the Hakata Station East area, andhas good visibility. In addition, there is the “Hakata-eki Higashi” ramp of the Fukuoka Urban
Expressway nearby allowing for smooth access by car.
The Hakata Connected project was announced by Fukuoka City in 2019, and in addition to the Tenjin
Big Bang project, redevelopment is underway in the Hakata Station area. We expect the future
potential of the Hakata Station East area to be enhanced by the redevelopment of the Chikushi Exitof Hakata Station.
2) Building properties etc.
The Property is equipped with a base floor space of approximately 799 ㎡ (approximately 241
tsubo), a ceiling height of 2,600mm, an OA floor, individual air conditioning, three elevators, 74
multistory parking lots, and 16 flat parking lots.
Because the rent levels of new buildings in the surrounding area are high and there is a gap between- 2 -the current rent of the property and the market rent, we can expect the property, which is rare in termsof building size and other factors, to achieve internal growth after the acquisition.
(3) Overview of the property
Property name
Type of the specified asset
TrusteeAcquisition price (planned)
Location (address)

Hakata Chikushi-Dori Center Building
Real estate trust beneficiary interest
Undecide
4,320 million yen
2-5 Hakataekiminami, Hakata Ward, Fukuoka City and 2 lots
1,333.68 ㎡AreaZoning

LandBuilding

ConstructorDesigner
Building design officeengaged in structural
engineering data
Organization that
authorized building
construction
Appraisal value
Appraiser
Collateral after acquisition
Property managementcompany
Master lease company
Master lease type
Earthquake PML

Special notations

Commercial area
600% up to 30m from the edge of the road
Floor area ratio
facing the land
500% for the area beyond the 30-meter line
Building coverage ratio 80% (90% due to adjustment for corner lot)
Type of ownership
Ownership
9-story (8 floors above ground and 1
Structure/ floor
basement floor), SRC/RC structure building
with flat roof
Built
January 31, 1992
8,621.96 ㎡
Total floor area
UseShops, Office building
Type of ownership
Ownership
Takenaka Corporation Kyushu Branch
Takenaka Corporation Kyushu First class registered architects officeTakenaka Corporation Kyushu First class registered architects office

Fukuoka city building official
4,540 million yen (As of August 1, 2021)
The Tanizawa Sogo Appraisal Co., Ltd.
None
Undecide
FRC
Pass-through2.8% (based on the assessment by Tokio Marine dR Co., Ltd. )・As for the structure (advertising signboard) of the property,
inspection certification has not been confirmed. However, it isconfirmed in the survey report on the status of structure issued byUnion Research Co., Ltd. that said structure is generally consistent
with the material at the time of building confirmation and that there are
no technical issues.
・With regard to the border violation with the land adjacent to theconcrete block and the crossarm of the private utility pole installed at- 3 -the property, an agreement to make utmost efforts to conclude amemorandum on the border violation by March 1, 2022 at theresponsibility and expense of the seller and provide a written
document indicating the process of negotiation if said memorandumcannot be concluded has been reached with the seller. Moreover, noconflicts, etc. have occurred with the owner or occupant of said
adjacent land.
・The following indicated matters have been confirmed for thebuilding of the property, but an agreement to ameliorate them byMarch 1, 2022 at the responsibility and expense of the seller has beenreached with the seller.
-A section for other use may become necessary at the cardboard
storage space in the parking lot-The door of the parking lot management office may not qualify as
fire prevention equipment (fire door)-The door of the waiting room for cleaners may not qualify as fire
prevention equipment (fire door)-Grounding for the water pipes, water tank stand and electricalconduits installed within 1.5 km of the lightning rod is not installed
・The transfer agreement falls under the category of forward
commitment, etc. In the transfer agreement, it is stipulated that FRC
can cancel the transfer agreement by abandoning the deposit that has
already been paid to the seller only until the commencement of
performance by the seller after paying an amount equivalent to 10% of
the planned acquisition price of the property as deposit. FRC has acommitment line of a total of 13 billion yen (commitment line 1: 6billion yen (commitment period: until July 31, 2024), commitment line
2: 7 billion yen (commitment period: until February 29, 2024)).
Because there is no outstanding balance as of today, it is unlikely that
FRC will abandon said deposit and cancel the transfer agreement due
to not being able to procure the acquisition funds.

Status of leasing

Total number of tenants
Total rent income(annually)
Security deposits
Total leasable area
Total leased area
Occupancy rate

12 (Note2)
226 mm yen (Note3)
145 mm yen (Note4)
5,994.41 ㎡ (Note5)
5,796.60 ㎡ (Note5)
96.7% (Note6) (as of August 1, 2021)*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) As for the status of leasing, the content as of August 1, 2021 is indicated, but a notice of cancellation forsome sections (leased area of the targeted section: 548.60m2, ratio to the total leasable area of the property: 9.2%)
has been received from a tenant as of today, and the lease agreement is scheduled to be terminated in December 2021.
(Note2) The number of tenants as of August 1, 2021 (including sellers using the property on their own) is indicated.
(Note3) The figure is calculated by multiplying the total monthly rent indicated in the lease agreements concluded- 4 -with tenants as of August 1, 2021 by 12. As for the own-use section of sellers, a building lease agreement withcondition precedent stipulating the conclusion of a real estate management and disposition trust agreement for theproperty as the condition precedent for effectuation has been concluded with the seller as of August 30, 2021, and theannual rent for said section has been included. Moreover, the figure has been rounded off to the nearest million yen.
Parking lot, etc. are not included.
(Note4) The figure is the sum of the amounts indicated in the lease agreements concluded with tenants as of August
1, 2021. As for the own-use section of sellers, a building lease agreement with condition precedent stipulating theconclusion of a real estate management and disposition trust agreement for the property as the condition precedent
for effectuation has been concluded with the seller as of August 30, 2021, and the annual rent for said section hasbeen included. Moreover, the figure has been rounded off to the nearest million yen. Parking lot, etc. are not included.
(Note 5) Total leasable area is the area that can be leased to tenants and total leased area is the total contract area
indicated in the lease agreement concluded with tenants as of August 1, 2021 and the total contract area indicated in
the building lease agreement with condition precedent concluded with the seller as of August 30, 2021. Moreover,parking lot, etc. are not included.
(Note6) 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 Report
Surveyor

Tokio Marine dR Co., Ltd.

Date of Survey reportAugust 20, 2021

Urgent and short-termLong-term repair andrepair and replacement

replacement expenses

expenses (Note1)(Note2)-40 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
The profile of the seller is not disclosed as no consent to disclosure has been obtained from theseller. The seller, which is a domestic general business company, has no capital, personnel orbusiness relationship to note with FRC and the asset management company or the affiliates oraffiliated companies of FRC and the asset management company. The seller and the affiliates oraffiliated companies of the seller do not fall within the scope of related parties of FRC and the asset
management company.
(6) Condition of property acquirer
The acquisition is not from a party having special interests with FRC or the asset managementcompany.
(7) Sales Agent Profile
The intermediary party in the acquisition of the Property does not have any special interests withFRC and the asset management company.
(8) Form of payment
The transaction for the property will be settled by paying 443 million yen as a deposit on the date ofconclusion of the contract (August 30, 2021) or the next day (August 31, 2021), and the remaining
amount will be paid on the scheduled acquisition date (March 1, 2022).

- 5 -(9) Acquisition on Schedule
August 30, 2021 Decision of acquisition
August 30, 2021 Conclusion of agreement
March 1, 2022
Payment (scheduled)
March 1, 2022
Delivery of the property (scheduled)
4. Outlook
Since the scheduled acquisition date of the Property is March 1, 2022, the acquisition of the Property had noimpact on the forecast of performance for the fiscal period ending August 2021 (March 1, 2021 – August 31,2021) and for the fiscal period ending February 2022 (September 1, 2021 - February 28, 2022), announced in“Earnings Briefing for the Period Ended February 2021” dated April 15, 2021.

- 6 -5. Outline of appraisal report
Property Name

Hakata Chikushi-Dori Center Building

Appraisal value

4,540,000 thousand yen

Appraiser

The Tanizawa Sogo Appraisal Co., Ltd.

Pricing dateAugust 1, 2021
Category

Figures

Reasons, etc.

4,540,000 thousand yen

Income Capitalization Approach Value

4,760,000 thousand yen

Value Calculated Using the Direct Capitalization Method

320,925 thousand yen

Gross Operating Revenue
Maximum Gross Operating Revenue337,485 thousand yen Based on the market price

Shortfall Attributed to Vacancies

16,559 thousand yen
91,434 thousand yen

Operating Expenses
Maintenane and Management Fees・PM Fees（Note）

34,086 thousand yen Based on the estimate, proposals, etc

Utilities Expenses

16,976 thousand yen

Repair and Maintenance Expenses

10,850 thousand yen

Based on the similar cases of otherproperties

Tenants' Leasing Expenses etc.

Based on the engineering report andsimilar cases of other properties
Assumed annual 10.0% tenant
2,340 thousand yen replacement

Taxes and Fees

23,391 thousand yen Based on the property taxes notice, etc

Damage Insurances

1,223 thousand yen Based on the estimate

Other Expenses

2,567 thousand yen

Net Operating Income

229,490 thousand yen

Profit through Mangement of Temporary Deposits, etc.

1,381 thousand yen

Capital Expenditure Reserve

26,350 thousand yen
204,522 thousand yen

Net Cash Flow

Evaluated considering the location, etc.
4.3% of the property, future uncertainties,
comparable cases, etc.

Capitalization Rate
Value through DCF mothod

4,440,000 thousand yen

Discount Rate

4.1%

Termial Cap Rate

4.5%

Value through cost method

4,460,000 thousand yen

Percentage of Leased Land

74.3%

Percentage of Building

25.7%

Other matters noted by the appraiser in inconducting appraisal

Based on the similar cases of otherproperties

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 https://www.fukuoka-reit.jp/en/index.html- 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
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
Tenjin Nishi-Dori Business Center(Land with leasehold interest)
Hakata Chikushi-Dori Center Building
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
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

32,00021,06019,610
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

15.5%
10.2%
9.5%
3.2%
4.8%
2.6%
1.2%
0.5%
1.2%
1.7%
2.5%
7.1%
5.4%
2.1%
3.4%
2.9%
1.3%
1.4%
2.1%
1.6%

Jun.1, 2021

7,700

3.7%

Mar. 1, 2022
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
－4,320
2,060
1,111
1,280
2,800
1,100
1,530
2,835
1,2508,150
5,050
1,700
206,339

2.1%
1.0%
0.5%
0.6%
1.4%
0.5%
0.7%
1.4%
0.6%
3.9%
2.4%
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.

- 12 -