Fukuoka REIT Corporation(8968）

Overview of Fifth Fiscal Period Performance(September 1, 2006 – February 28, 2007)
http://www.fukuoka-reit.jp

Fukuoka Realty Co., Ltd.

REIT Overview
ProfileProfileCurrent
Current Pricing
Pricing【Name】

Fukuoka REIT Corporation【Unit Price】【Asset Manager】

Fukuoka Realty【Outstanding Units】107,050【Sponsors】

Fukuoka Jisho, Kyushu Electric Power,
The Bank of Fukuoka,
The Nishi-Nippon City Bank,
Nishi-Nippon Railroad, Saibu Gas,
Kyudenko, Kyushu Railway Company,
Royal Holdings【Market Cap 】【Listed date】

June 21, 2005 (TSE and FSE)

【Total Debt】【Debt Rating】

120.9 billion yen【High (since IPO)】 1,300,000 yen (February 26, 2007)【Low (since IPO)】 763,000 yen (September 15, 2005)

Portfolio
Portfolio Summary
Summary

Financial
Financial Highlights
Highlights【Total Assets】

1,130,000 yen (as of April 10, 2007)

Note:The values are arrived at using the assets under management and assets
scheduled to be acquired (contract base) as of April 10, 2007. The
planned acquisition price is used for City House Tenjin Keyaki Dori(tentative) and the preferred silent partnership interest is not included.
The figures for the total leasable area and occupancy are the figures forthe assets under management as of February 28, 2007.

【Asset Types】
117.2 billion yen(as of February 28, 2007)

Retail 62.6%, Office 34.5% andResidential 2.9%

【Asset Location】

44.1 billion yen(as of February 28, 2007)

Fukuoka metropolitan area 72.1%,
other Kyushu 27.9%【Properties】

12

S&P A- (stable)【Total Leasable Area】 304,024.87m2【Occupancy】

99.4%

Dividend
Dividend Information
Information【Previous Fiscal Period (5th) End】 February 28, 2007 (semi-annual periods ending every February and August)【Cash Dividend for 5th Fiscal Period (actual)】 17,341 yen per unit
【Yield】 3.1% (Annualized dividend for the 5th period/the investment unit price as of April 10, 2007)【Spread vs. JGB】 1.4% (Comparison with 10-year JGB as of April 10, 2007)

TableTable ofof Contents
Contents

1. Presentation of Accounts for Fifth Fiscal Period……………… 4

2. Portfolio ………………………………………………………………………………12
3. Acquisition Strategy ……………………………………………………………17
4. Management ………………………………………………………………………21
5. Finance………………………………………………………………………………26

6. Compliance …………………………………………………………………………30
7. Environmental Analysis and Management Policy ………………33
8. Appendix …………………………………… ………………………………………41

These materials may contain future performance, plans, management targets and strategies. These forward-looking descriptions are based on present
assumptions on future events and trends in the business environment, but such assumptions may not necessarily be accurate. Actual results may differ
materially due to various factors. Fukuoka REIT Corporation nor Fukuoka Realty shall be liable for the accuracy, rationality and completeness of
information contained in these materials, whether they were prepared by Fukuoka REIT Corporation or Fukuoka Realty or provided by a third party.
These materials have not been prepared to entice investment. When applying to purchase investment units issued by Fukuoka REIT Corporation, do sobased on your own judgment and responsibility.

Presentation of Accounts
for Fifth Fiscal Period

Presentation of Accounts for Fifth Fiscal Period

Portfolio

Acquisition Strategy

Management

FinanceCompliance

Environmental Analysis and Management Policy

Appendix

Settlement Highlights of the 5th Fiscal Period (ended February 2007)
Category
Operating revenues

5th Fiscal Period

4th Fiscal Period

September 1, 2006
〜February 28, 2007

March 1, 2006
〜August 31, 2006

4,870 mm yen

4,496 mm yen

Variation

Acquisition of 3 new properties during the 5th fiscal period

374 mm yen

Operating profit

2,210 mm yen

1,983 mm yen

227 mm yen

Ordinary profit

1,866 mm yen

1,716 mm yen

149 mm yen

Net profit

1,856 mm yen

1,715 mm yen

141 mm yen

Distribution per unit

17,341 yen

18,632 yen-1,291 yen

Number of investment
units (as of end of period)

107,050

92,05015,000Length181 days

184 days

Properties (period end)

(note)

11 properties

8 properties

Tenants (period end)

314 tenants

250 tenants

304,024.87m2

277,580.44 m2

Leaseable floor space(period end)

Occupancy (average)
Occupancy (period end)

Primary Factors for Period-on-Period Variationin Net Profit Compared●●Increase
Increase inin property
property NOI
NOI

+315
+315 million
million yen
yen●● Increase
Increase in
in depreciation
depreciation expenses
expenses-69-69 million
million yen
yen●● Increase
Increase inin generalgeneral administration
administration costs
costs

-19
-19 million
million yen
yen

Conversion to long-term debt
during the 4th and 5th fiscal periods●● Increase
Increase inin financing
financing cost
cost

-79
-79 million
million yen
yen
Average
Average interest
interest rate
rate during
during thethe fiscal
fiscal periods
periods
44thth fiscal
fiscal period:
period: 0.83%
0.83% →
→ 55thth fiscal
fiscal period:
period: 1.49%
1.49%●● Public
Public offeringoffering inin September
September 2006
2006

(Number(Number ofof investment
investment units
units increased
increased byby 16%)
16%)

Achieved increases inrevenues and profits forthird consecutive fiscal period
Distribution per unit

●Actual (surpassing forecast)
17,341 yen

99.2 ％
99.4 ％

99.3 ％
99.4 ％●Forecast at period start (April 20, 2006)
17,000 yen

SunLiveCity
Kokura and Park
Place Oita
surpassed
budget NOIs

(Note) Properties planned for acquisition and the silent partnership interest have been excluded.

5

Presentation of Accounts for Fifth Fiscal Period

Portfolio

Acquisition Strategy

Management

FinanceCompliance

Environmental Analysis and Management Policy

Appendix

Profit and Loss Statement for the 5th Fiscal Period(unit: thousand yen)

5th Fiscal Period
September 1, 2006 – February 28,
2007

Category
I. Operating revenues
Real estate leasing revenues
Other revenues from real estate leasing
Silent partnership distribution

II. Operating expenses
Real estate leasing expenses

Percentage
(%)

Value
4,870,051

100.0

4th Fiscal Period
March 1, 2006 – August 31, 2006

Value
4,496,048

Variation

Percentage
(%)

Value

Percentage
(%)

100.0

374,003

8.3

4,544,795

4,231,464

313,331

189,256

128,583

60,672

136,000
2,659,590

136,000
54.6

2,512,620−
55.9

146,9692,251,250

2,123,240

128,010
24,401

297,694273,293

Asset custodian fee

9,041

8,344

696

General administration fees

30,43132,192(1,761)

Asset management fees

Director compensation

9,600

9,600

−

Other operating expenses

61,572

65,948(4,375)

Operating income

III. Non-operating revenues
Interest received
Other non-operating revenues

IV. Non-operating expenses

5.8

45.4

1,983,427

44.1

227,033

11.4

12,247

0.2

368

0.0

11,879

−

3,728

368

8,519
356,613

3,359
8,519

−
7.3

267,693

6.0

88,919295,397

171,148

5,595

5,595

0

Investment unit issuance fee write off

8,412

−

8,412

Expenses related to financing

44,22589,099(44,874)

Other non-operating expenses

2,982

1,850

1,132

33.2

124,249

1,866,095

38.3

1,716,102

38.1

149,993

8.7

Net profit before tax
Corporation, inhabitant andbusiness tax
Adjustment to corporation tax

1,866,095

38.3

1,716,102

38.1

149,993

8.7

9,654

0.2

1,048

0.0

8,606

−

19

0.0

(0)

0.0

19

−

Net profit

1,856,421

38.1

1,715,054

38.1

141,367

8.2

16

37

(20)

Unappropriated profit

1,856,438

1,715,092

141,346+315+315 million
million yen
yen●Contribution of newly acquired properties+266 million yen- Amex Akasakamon Tower
66 million yen- Square Mall Kagoshima Usuki
163 million yen- Kumamoto Intercommunity SC
37 million yen●Canal City Business Center Building
Contribution of rise in occupancy+13 million yen(period average: fourth period 95.2%→fifth period 99.4%)

th fiscal
ImpactImpact of
of 3
3 new
new acquisitionsacquisitions inin 5
5thfiscal period
periodIncrease
Increase in
in depreciation
depreciation +69+69 million
million yen
yen
Increase
Increase inin generalgeneral administration
administration costs
costs
+19
+19 million
million yen
yen

Increase
Increase inin financing
financing costs
costs +79
+79 million
million yen
yen

Ordinary profit

Profit carried forward

Increase
Increase inin property
property NOINOI●Contribution of Taihaku Dori Business Center
full operation +18 million yen

2,210,461

Amortization of establishment cost

Interest paid

Primary Factors for Period-on-Period Variation•• Conversion
Conversion into
into long-termlong-term debt
debt between
between AugustAugust andand
September
September 2006
2006•• Average
Average interest
interest rate
rate during
during thethe periods
periods
4th
4th fiscal
fiscal period
period 0.83%
0.83% →
→ 5th
5th fiscal
fiscal period
period 1.49%
1.49%

6

Presentation of Accounts for Fifth Fiscal Period

Portfolio

Acquisition Strategy

Management

FinanceCompliance

Environmental Analysis and Management Policy

Balance Sheet for the 5th Fiscal Period(unit: thousand yen)

5th Fiscal
Period(as of February 28, 2007)

Category

Value

Share
(%)

4th Fiscal
Period(as of August 31, 2006)
Share
(%)

Value

(as of February 28, 2007)

Percen-tage(%)

Assets

Value

Share
(%)

(as of August 31, 2006)

Value

Share
(%)

Variation
Value

Percen-tage(%)

I. Current liabilities
6,561,682

2,935,049

3,626,632

3,493,655

3,430,267

63,387

Operating receivables

248,290

333,808(85,518)

Deferred tax assets

19

(19)

Consumption tax receivables−
99,44389,196

10,246

Other current assets

229,751

252,634(22,882)

Cash and cash equivalents
Cash and deposits in trust

Total current assets

10,632,823

9.1

7,040,976

6.8

3,591,846

Accrued business fees
Short-term debt

51.0

136,683

Structures

55,34046,3199,021

250,629

35,230Rent received in advance

140,384(3,701)

II. Fixed liabilities
Long-term debt

805

843

(38)

641,782

641,782−

Buildings in trust

41,797,815

37,987,229

3,810,585

Structures in trust

397,201

209,848

187,353

Machinery and equipment in trust

295,701

244,50351,197

Tools and fixtures in trust

291,519

214,652

76,866

59,463,999

54,117,497

5,346,502

LandLand in trust
Temporary account of construction
in trust
Total tangible assets in trust

25,39724,457103,050,906

93,581,20087.9

Deposits and guarantees on deposit
Deposits and guarantees in trust
Derivative liabilities

9,469,705

10.1

2. Investment and other assets
Investment securities
Guarantees and deposits

3,421,633
10,0003,421,633
10,000Long term pre-paid expenses

79,342

101,252

Total investment and other assets

3,510,975

3.0

3,532,885

3.4(21,909)(0.6)

106,561,881

90.9

97,114,086

93.2

9,447,795

9.7

Total fixed assets
III. Deferred assets

22,381

27,977(5,595)Investment unit issurance fees

42,062−

42,06264,444
117,259,149

0.0
100.0

27,977104,183,040●Kept funds to acquire Hara SATY on hand one extra day(sixth fiscal period – March 1, 2007)

0.0
100.0

36,467
13,076,109

975

235

535,254

54,609500,819
10,217,442

736,8488.7

9,902,209(236,028)
9.5

315,232

35,600,000

34,600,000

98,595

103,128(4,533)9,222,293

8,694,810

527,483

97,9463.2

1,000,000

128,594(30,647)

Total fixed liabilities

45,018,836

38.4

43,526,532

41.8

1,492,303

3.4

Total liabilities

55,236,278

47.1

53,428,742

51.3

1,807,536

3.4

60,264,380

51.4

49,167,800

47.2

11,096,580

22.6

I. Unitholders’ capital
1. Total capital
2. Reserves−−(21,909)

Founding fees

1,210
589,863

Net Assets

939
89.8

52,164400,000

285,860

Deposits held

Buildings

232,183
8,100,000

Expenses payable

Total current liabilities

1. Tangible fixed assets

284,3488,500,000

Accounts payable
Income taxes payable

II. Fixed assets

Total assets

Category

4th Fiscal
PeriodLiabilities

I. Current assets

Total deferred assets(unit: thousand yen)

5th Fiscal
PeriodVariation
Value

Appendix

130.3
12.6

Unappropriated profit

1,856,438

Total reserves

1,856,438

1.6

1,715,092
1,715,092

1.6

141,346
141,346

8.2

Total unitholders’ capital

62,120,818

53.0

50,882,892

48.8

11,237,926

22.1

II. Difference of valuation and conversion
1. Deferred hedge profit/loss
Total difference of valuationand conversion
Net assets

62,022,871

52.9

Total liabilities and net assets

117,259,149

100.0●Three properties newly acquired (Amex Akasakamon Tower,
Square Mall Kagoshima Usuki, Kumamoto Intercommunity SC)(97,946)(97,946)(128,594)(0.1)(128,594)

30,647(0.1)

30,647－50,754,298

48.7

11,268,573

22.2

104,183,040

100.0

13,076,109

12.6●Increased capital in September 2006
•Issuance of new investment units 15,000 units•Capital raised 11,096 million yen

7Presentation of Accounts for Fifth Fiscal Period

Portfolio

Acquisition Strategy

Management

FinanceCompliance

Environmental Analysis and Management Policy

Cash Flow Statement for the 5th Fiscal Period
September 1, 2006 – February 28, 2007

1,866,095
688,585
5,595
8,412(3,728)295,397
85,518(10,246)
9,821
8,966
13,78354,609(230,248)
34,033
21,909(21,540)
2,826,966
3,728(273,950)(9,977)2,546,767(10,105,000)−(4,533)632,917(111,214)−(50,475)(488,662)(10,126,968)
8,500,000(8,100,000)
1,000,000
11,096,580(1,715,020)
10,781,559
3,201,358
6,365,317
9,566,675(thousand yen)

4th period (184 days)

5th period (181 days)
Ⅰ Cash flows from operating activities
Income before income taxes
Depreciation
Amortization of founding fees
Investment unit issuance fee depreciation
Interest received
Interest paid
Increased/decreased amount of operations receivables
Increased/decreased amount of uncollected consumption tax
Increased/decreased accrued business payments
Increased/decreased unpaid fees
Increased/decreased unpaid expenses
Increased/decreased advanced rents
Increased/decreased deposits held
Increased/decreased advance payments
Increased/decreased long-term advance payments
Other
SubtotalInterest received
Interest paid
Corporation tax payment, etc.
Net cash provided by operating activities
Ⅱ Cash flow from investment activities
Expenses for acquiring tangible fixed assets placed in trust
Expenses for paying deposits
Expenses from security deposits and guarantees
Income from security deposits and guarantees in trust
Expenses from security deposits and guarantees in trust
Expenses from acquiring investment securities
Expenses for investment unit issuance fees
Expenses for depositing entrusted deposits
Net cash provided by investment activities
Ⅲ Cash flow from financing activities
Proceeds from short-term debt
Repayment of short-term debt
Proceeds from borrowing long-term loans
Income from issuance of investment units
Distribution payment
Net cash provided by financing activities
Ⅳ Increased/decreased cash and cash equivalents
Ⅴ Cash and cash equivalents at start of period
Ⅵ Cash and cash equivalents at end of period

Appendix

March 1, 2006 – August 31, 2006

Acquisition of 3 newproperties (Amex Akasakamon
Tower, Square Mall Kagoshima
Usuki and Kumamoto
Intercommunity SC)

Increased capital in
September 2006

1,716,102
619,112
5,595
−
(368)
171,148(201,166)(89,196)(86,287)
25,103
12,67354,165
251,306(53,923)(7,808)(7,898)2,408,557
368(161,247)(1,109)2,246,568(7,380,419)(114,960)(4,533)399,921(75,223)(20,212)−−(7,195,428)
20,700,000(27,700,000)
16,000,000−(1,696,208)
7,303,791
2,354,931
4,010,386
6,365,317

8

Presentation of Accounts for Fifth Fiscal Period

Portfolio

Acquisition Strategy

Management

FinanceCompliance

Environmental Analysis and Management Policy

Appendix

Leasing Business Income and Expenditure
Category

Canal City
HakataPark Place
Oita

Kominedai
Community
Mall

Square Mall
Kagohima
Usuki

Kumamoto
Intercommunity
SC

Canal City
Business
CenterBuilding

Gofukumachi
Business
CenterBuilding

Sanix
HakataBuilding

Taihaku
StreetBusiness
CenterAmex
Akasakamon
Tower

5th Fiscal Period (September 1, 2006～February 28, 2007）(Fiscal period)(Length)SunLiveCity
Kokura(million yen)

Total

5th

4th

Variation

181 days

181 days

181 days

181 days

154 days

91 days

181 days

181 days

181 days

181 days

181 days

181 days

184 days

1,390

903

285

33

226

38

699

554

203

318

80

4,734

4,360

374

1,366

884

285

33

189

38

696

494

189

317

47

4,544

4,231

313

24

19

0

0

36

0

2

60

13

0

32

189

128

60

Total leasing business
expenses ②

659

523

66

8

109

14

340

270

89

132

35

2,251

2,123

128

Outsourcing fees

323

257

8

1

34

1

189

73

19

61

5

975

920

55

Maintenance expenses

6

23

0

0

0

0

3

4

0

1

0

40

39

1

Expenses for restoration
to former state

0

0

0

0

0

0

0

0

0

0

0

0

2

(1)

Tax and public charges

70

74

26

3

0

275

300

(25)

Insurance permiums andtrust compensation

7

5

2

Depreciation

176

122

Other expenses

74

Real estate rental
business profit (loss) ③（=①－②）
ＮＯＩ④（=③＋depreciation）

Total leasing businessincome ①
Rent
Other Income

ＮＯＩ yield (Note 2)（Annual conversion of ④
/Acquisition price）(Note 1)0(Note 1)

0

46

38

15

0

2

0

4

3

1

1

0

30

29

0

27

3

46

12

83

94

35

64

21

688

619

69

39

0

0

26

0

12

56

17

2

7

239

211

28

730

380

218

24

116

24

359

284

113

185

44

2,482

2,236

245

906

503

246

28

162

36

442

378

149

250

66

3,171

2,855

315

5.7%

6.5%

7.5%

7.8%

7.3%

6.2%

6.1%

6.8%

6.8%

7.2%

6.5%

6.3%

6.2%

0.1%

0

(Note 1)

(Note 1)

(Note 1) Property taxes and city planning taxes are planned to be entered as expenses (60 million yen) for the 6th fiscal period, although they are appropriated as assets when properties are newly acquired.
(Note 2) NOI yields by property have been calculated by annualizing NOIs of individual properties based on the length of their management. The NOI yields in the “Total” column have been obtained by annualizing the NOI of the 4th and 5th fiscal periods
using the length of each period.

9

Presentation of Accounts for Fifth Fiscal Period

Portfolio

Acquisition Strategy

Management

FinanceCompliance

Environmental Analysis and Management Policy

Appendix

Forecasts for 6th and 7th Fiscal Periods
Category

7th Fiscal Period(forecast)

6th Fiscal Period(forecast)

5th Fiscal Period(results)

4th Fiscal Period(results)

3rd Fiscal Period(results)

September 1, 2007 –February 28, 2008
(181 days)

March 1, 2007 –August 31, 2007
(184 days)

September 1, 2006 –February 28, 2007
(181 days)

March 1, 2006 –August 31, 2006
(184 days)

September 1, 2005 February 28, 2006
(181 days)

5,124 mm yen

5,188 mm yen

4,870 mm yen

4,496 mm yen

4,050 mm yen

Operating profit－－

2,210 mm yen

1,983 mm yen

1,751 mm yen

Ordinary profit

1,822 mm yen

1,886 mm yen

1,866 mm yen

1,716 mm yen

1,698 mm yen

Net profit

1,820 mm yen

1,884 mm yen

1,856 mm yen

1,715 mm yen

1,697 mm yen

17,000 yen

17,600 yen

17,341 yen

18,632 yen

18,438 yen

Operating revenue

Distribution per unit

The
The risk
risk ofof interest
interest rates
rates
risingrising andand thethe risk
risk ofof NOINOI
decreasing
decreasing due
due toto vacancy
vacancyrooms
rooms were
were considered
consideredThe
The incorporation
incorporation ofof HaraHara SATY
SATY into
into thetheportfolio
portfolio atat thethe beginning
beginning ofof thethe fiscal
fiscalperiodperiod contributes
contributes toto raisingraising thethe property
property
NOI
NOI【Reference】【Reference】•Depreciation•Depreciation 766
766 mmmm yenyen•Plan•Plan toto incorporate
incorporate City
City House
House Tenjin
TenjinKeyakidori
Keyakidori into
into portfolio
portfolio during
during thethe fiscal
fiscalperiodperiod【Reference】【Reference】•Depreciation•Depreciation 753
753 mmmm yenyen•Recording•Recording of
of 60
60 mm
mm yenyen inin property
property andand city
city planningplanning
taxes
taxes forfor Taihaku
Taihaku Street
Street BusinessBusiness Center,
Center,Amex
Amex Akasakamon
Akasakamon Tower,
Tower,
SquareSquare Mall
Mall Kagoshima
Kagoshima Usuki
Usuki andand
Kagoshima
Kagoshima Intercommunity
Intercommunity SC
SC●● Capital
Capital raised
raised inin September
September 2006
2006
(16%
increasein(16% increase in investment
investment units)
units)●● Conversion
Conversion ofof debt
debt into
into long-termlong-term debt
debt during
during AugustAugust–– September
September 2006
2006
th
(average(average fiscal
fiscal period
period interest
interest rose
rose fromfrom 0.83%
0.83% inin 44ththfiscalfiscal period
period toto 1.49%
1.49% inin 55th fiscal
fiscal period
period*Property and city planning taxes for Hara SATY to berecorded from 8th fiscal period(Note) The above forecast values were calculated based on set premises.
There is the possibility that the actual operating revenues, ordinary profit, net profit and distribution per unit will change and these values are not guaranteed by being entered here.

Maintain and Continue High Level of Dividends

10Presentation of Accounts for Fifth Fiscal Period

Portfolio

Acquisition Strategy

Management

FinanceCompliance

Environmental Analysis and Management Policy

Appendix

Financial Indicators + Top 10 REIT ComparisonsCategory

Fifth Period
Results(note 1)

Weighted
Average for
Top 10 REITs

Weighted
Average for
All REITs(note 2)

Remarks (Definitions of Indices, etc.)(note 3)Return on Assets (ROA)*Annualized

3.4%

3.1%

3.1%

Ordinary profit/(total assets at start of period + total assets at end of period)/2

Return on Earnings (ROE)*Annualized

6.9%

6.0%

6.0%

Net profit/(net assets at start of period + net assets at end of period)/2

Ratio of interest-bearing to total assets

37.6%

37.8%

39.8%

End of period interest-bearing debt/
end of period total assets

Ratio of long-term interest-bearing debt

80.7%

67.1%

68.2%

Long-term interest-bearing debt /total debt at end of period

9.6

11.4

10.3

579,382 yen

611,832 yen

582,619 yen

FFO per unit

23,744 yen

24,666 yen

22,287 yen

Distribution per unit

17,341 yen

17,655 yen

16,448 yen

Forecast dividend

17,600 yen

16,486 yen

15,412 yen

Forecast dividend yield

2.9%

2.9%

3.3%

(Forecast dividend/managed days x 365)/end-of-term price of investment units

Spread vs. JGB

1.2%

1.2%

1.6%

Forecast dividend yield – 10-year JGB yield

Revised PBR

2.1 Ｘ

－

－

FFO multiple

25.9 Ｘ

23.1 Ｘ

21.0 ＸDSCR
Net assets per unit

※Long-term loans and investment corporation
bonds are not included in the long-term
interest-bearing debt

(Net profit + paid interest + depreciation - capital gains from sale of real estate)/interest paid

(Net profit + depreciation - capital gains from sale of real estate )/outstanding units at end of period

End-of-term investment unit price/{net assets per unit + (end-of-term appraised value – end-of-term book value)/
outstanding investment units}
End-of-term investment unit price/FFO per unit

Note 1) Figures for Fukuoka REIT are calculated based on the fifth fiscal period settlement and the investment unit price at the end of the fifth fiscal period (1,240,000 yen as of the end of February 2007). The forecast dividend and forecast dividend
yield are calculated based on the forecast performance for the sixth fiscal period (ending in August 2007). Note 2) The top 10 REITs in the investment unit price are the top 10 REITs in the ranking by investment unit price at the end of March 2007 among 27REITs
that are listed on the Tokyo Stock Exchange and have settlement results of more than two fiscal periods as of the end of March 2007. They are Nippon Building Fund, Japan Real Estate, Japan Retail Fund, Japan Prime Realty, Tokyu REIT, Global One
Real Estate, Nomura Real Estate Office Fund, Mori Trust Sogo REIT, Frontier Real Estate and Hankyu REIT. The unit price of Japan Prime Realty, which has split its units, has been adjusted with the split ratio of 1:2.5. Each index has been calculated
based on the settlements of most recent fiscal periods and the unit prices at the end of most recent fiscal periods for individual REITs.Note 3) All REITs are the 27 REITs listed on the Tokyo Stock Exchange that have settlement results of two fiscal
periods or more as of the end of March 2007. Each index has been calculated based on the settlements of most recent fiscal periods and the units prices at the end of most recent fiscal periods for individual REITs.
(Source) Prepared by Fukuoka Realty based on materials disclosed by individual investment corporations.

11Portfolio

Presentation of Accounts for Fifth Fiscal Period

Portfolio

Acquisition Strategy

Management

FinanceCompliance

Environmental Analysis and Management Policy

Appendix

J-REIT Specialized in Fukuoka/Kyushu Area
Supported
Supported byby Kyushu
Kyushu BusinessBusiness WorldWorld

Investment
Investment Policy
Policy13

Presentation of Accounts for Fifth Fiscal Period

Portfolio

Acquisition Strategy

Management

FinanceCompliance

Environmental Analysis and Management Policy

Appendix

Portfolio Map

14

Presentation of Accounts for Fifth Fiscal Period

Portfolio

Acquisition Strategy

Management

FinanceCompliance

Environmental Analysis and Management Policy

Appendix

Portfolio Table

Note 1) All values in the Acquisition (Planned) Price column exclude fees, public charges and expenses.
Note 2) Properties acquired through arrangement by sponsors have been indicated as “sponsor.”
Note 3) Figures in the Tenants, Total Leasable Area and Occupancy columns are for the above-listed properties as of February 28, 2007.
Note 4) The total leasable area figure of Taihaku Street Business Center combines 11, 225.30㎡ for the office building and 3,427.38㎡ for the
residential building.
Note 5) Figures in the Age column are weighted-average of building ages of above-listed properties using acquisition (planned) prices (The building
age of the uncompleted property has been set as 0.). Figures in the Occupancy column have been obtained by dividing the total leased
areas of the above-listed properties as of February 28, 2007 by the total leasable areas.
Note 6) The figure in the Assumed IRR column is based on the "Survey on Investment Profitability Value of Preferred Equity" by Japan Real Estate
Institute.
Note 7) Figures in parentheses are not included in respective total figures.

(Note) These figures are based on
properties owned as of April 10,2007 and those scheduled for
acquisition (contract base). City
House Tenjin Keyaki Dori(tentative) is entered based on its
scheduled acquisition price. The
preferred silent partnershipinterest has not been included.

A Portfolio Primarily Comprised of Retail Properties and Focused on the Fukuoka Metropolitan Area

15

Presentation of Accounts for Fifth Fiscal Period

Portfolio

Acquisition Strategy

Management

FinanceCompliance

Environmental Analysis and Management Policy

Appendix

List of Property Prices

Note 1) All values in the Acquisition (Planned) Price columns exclude fees, public charges and expenses.
Note 2) Figures in the Acquisition CAP column have been calculated by dividing the direct capitalization method NCFs in
the appraisal reports (including survey reports) by the acquisition (planned) prices.
Note 3) The Appraisal CAP figures are the cap rates under the direct capitalization method in the appraisal reports(including survey reports).
Note 4) Figures in the Most Recent Capitalization Method Appraisal are evaluation values based on the direct
capitalization method in appraisal reports as of February 28, 2007. In the case of Hara SATY and (tentative)
City House Tenjin Keyaki Dori, they are evaluation values based on the direct capitalization method in the mostrecent appraisal reports.
Note 5) The figures in the Most Recent DCF Appraisal are based on the DCF method in appraisal reports as of February
28, 2007. In the case of Hara SATY and (tentative) City House Tenjin Keyaki Dori, they are figures based on
the DCF method in the most recent appraisal reports.

Steady Increase in Latent Profit

16

Acquisition Strategy

Presentation of Accounts for Fifth Fiscal Period

Portfolio

Acquisition Strategy

Management

FinanceCompliance

Environmental Analysis and Management Policy

AppendixExternal Growth Roadmap(Note 1)

(Note 2)This is a preferred silent partnership interest in
CCH Bridge YK, the SPC that is the operator
that manages the portion owned by Canal City
Hakata SPC.
This is calculated based on the acquisition
prices of owned properties and planned
acquisitions (contract based price) as of the endof March 2007.

Fukuoka REIT is Creating the Optimal Portfolio as a Dedicated Fukuoka/Kyushu REIT

18

Presentation of Accounts for Fifth Fiscal Period

Portfolio

Acquisition Strategy

Management

FinanceCompliance

Environmental Analysis and Management Policy

Appendix

Map of Sponsor Development Trends (Properties are not owned by Fukuoka REIT)

Hakata Riverain
EastsideWest Japan
Building

New Japan Building

Higashihie
Business Center(tentative)

Canal City Ⅱ
Plan for new
housing projectat Akasaka
2-chomeTenjin Kirameki
Dori Building(Iwataya Annex)

Property developed by sponsor

天神きらめき通りビル
Hakata Ekimae
Business Center

Hyatt Regency
Fukuoka

Property sponsor is planning ordeveloping
Property owned by affiliate realestate firm of sponsor(Note) This map is as of April 10, 2007 and there are no plans for Fukuoka REIT to acquire any of these properties.

19

Presentation of Accounts for Fifth Fiscal Period

Portfolio

Acquisition Strategy

Management

FinanceCompliance

Environmental Analysis and Management Policy

Appendix

History of Acquisition Cap Rates and Implied Cap Rates
History
History ofof Acquisition
Acquisition Cap
Cap Rates
Rates(Office(Office Buildings)
Buildings)

Comparison
Comparison ofof Implied
Implied Cap
Cap Rates
Rates andand NOINOI Returns
Returnsforfor Fukuoka
Fukuoka REIT
REIT

Source) Real Estate Investor Survey by Japan Real Estate InstituteNote) This indicates the history of transaction returns for office buildings

Note 1) Implied cap rates and NOI yields of Fukuoka REIT have been calculated based on the fifth fiscal period settlement and the investment unit price at the end of the fifth fiscal period.
Note 2) The top 10 REITs in the investment unit price are the top 10 REITs in the ranking by investment unit price at the end of March 2007 among 27 REITs that are listed on the Tokyo Stock Exchange and have settlement results of more than two fiscal
periods as of the end of March 2007. They are Nippon Building Fund, Japan Real Estate, Japan Retail Fund, Japan Prime Realty, Tokyu REIT, Global One Real Estate, Nomura Real Estate Office Fund, Mori Trust Sogo REIT, Frontier Real Estate and Hankyu
REIT. The unit price of Japan Prime Realty, which has split its units, has been adjusted with the split ratio of 1:2.5. Each index has been calculated based on the settlements of most recent fiscal periods and the unit prices at the end of most recent
fiscal periods for individual REITs.
Note 3) All REITs are the 27 REITs listed on the Tokyo Stock Exchange that have settlement results of two fiscal periods or more as of the end of March 2007. Each index has been calculated based on the settlements of most recent fiscal periods and theunit prices at the end of most recent fiscal periods for individual REITs.
(Source) Prepared by Fukuoka Realty based on materials disclosed by individual investment corporations.

Fukuoka REIT is Aiming to Raise Dividends through External Growth20

Management

Presentation of Accounts for Fifth Fiscal Period

Portfolio

Acquisition Strategy

Management

FinanceCompliance

Environmental Analysis and Management Policy

Appendix

History of Occupancy Rate by Property

Occupancy of Overall Portfolio at End of Fifth Fiscal Period: 99.4%

22

Presentation of Accounts for Fifth Fiscal Period

Portfolio

Acquisition Strategy

Management

FinanceCompliance

Environmental Analysis and Management Policy

Appendix

History of Retail Property Sales

One of the 10th
anniversary
eventsMerry Pumpkin(84 tsubos), a
new family buffet
restaurant

Established ascommunity’s top
store

Sales at All Three Retail Properties are Performing Strongly

23

Presentation of Accounts for Fifth Fiscal Period

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Acquisition Strategy

Management

FinanceCompliance

Environmental Analysis and Management Policy

Appendix

Rental Portfolio (including common expenses)

Note 1) Figures in the circle graphs do not include the rents (includingcommon expenses) of Kominedai Community Mall, which was sold on
March 9, 2007.
Note 2) Ratios indicated in the circle graphs are figures obtained by dividing
the actual rents (including common expenses) for the 5th fiscal period,
as totaled for each remaining contract period of residents at Amex
Akasakamon Tower, by actual rents (including common expenses) for
the 5th fiscal period from the property.
Note 3) Ratios indicated in the circle graphs are figures obtained by dividing
the actual rents (including common expenses) for the 5th fiscal period,
as totaled for each remaining contract period of tenants at Canal City
Business Center Building, Gofukumachi Business Center, Taihaku
Street Business Center and Sanix Hakata Building, by actual rents(including common expenses) for the 5th fiscal period from those
properties.
Note 4) Ratios indicated in the circle graphs are figures obtained by dividing
the actual rents (including common expenses) for the 5th fiscal period,
as totaled for each remaining contract period of tenants at Canal City
Hakata, Park Place Oita, SunLiveCity Kokura, Square Mall Kagohima
Usuki and Kumamoto Intercommunity SC, by actual rents (includingcommon expenses) for the 5th fiscal period from those properties.

Some Retail Leases are Long-term but Other Leases are Primarily Short-term

24

Presentation of Accounts for Fifth Fiscal Period

Portfolio

Acquisition Strategy

Management

FinanceCompliance

Environmental Analysis and Management Policy

Appendix

Breakdown of Tenant Rent Types (including common expenses) for Retail Properties

Note 1) Figures in the circle graphs do not include the rents (including common expenses) of Kominedai Community Mall, which was sold on March 9, 2007.
Note 2) "Fixed rent tenants" are tenants whose monthly rent (including common expenses) are fixed. Moreover, the indicated ratios are figures obtained by dividing the actual rent (including common expenses) for the 5th fiscal period from the tenantswith fixed rent housed in Canal City Hakata, Park Place Oita, SunLiveCity Kokura, Square Mall Kagoshima Usuki and Kumamoto Intercommunity SC, by actual rents (including common expenses) for the 5th fiscal period from those properties.
Note 3) Entirely percentage of sales tenants are tenants whose monthly rents (including common expenses) shall be calculated by multiplying their monthly sales amount by a certain percentage. The indicated ratios are figures obtained by dividing theactual rent (including common expenses) from the tenants with rent entirely linked to sales housed in Canal City Hakata, Park Place Oita, SunLiveCity Kokura, Square Mall Kagoshima Usuki and Kumamoto Intercommunity SC by the amount of actual rent(including common expenses) for the fifth fiscal period from those properties.
Note 4) Percentage of sales with minimum guarantee tenants aretenants whose monthly rents (including common expenses) are fixed and who are required by contract to pay extra rents that are calculated by multiplying the excess sales amounts, when theirsales exceed certain amounts, by percentage. The indicated ratios are figures obtained by dividing the actual rent (including common expenses) from the tenants with percentage of sales and minimum guarantee housed in Canal City Hakata, Park Place
Oita, SunLiveCity Kokura, Square Mall Kagoshima Usuki and Kumamoto Intercommunity SC by the amount of actual rent (including common expenses) for the fifth fiscal period from those properties.
Note 5) Fixed rent + percentage of sales tenants are tenants whose monthly rents (including common expenses) are fixed and who are (except for certain tenants) required by contract to pay extra rents that are calculated by multiplying their sales amounts
by the percentage of sales. The indicated ratios are figures obtained by dividing the actual rent (including common expenses) from the tenants with fixed and percentage of sales housed in Canal City Hakata, Park Place Oita, SunLiveCity Kokura, Square
Mall Kagoshima Usuki and Kumamoto Intercommunity SC by the amount of actual rent (including common expenses) for the fifth fiscal period from those properties.

Supplementing with Percentage of Sales while Suppressing the Downside Risk

25

FinancePresentation of Accounts for Fifth Fiscal Period

Portfolio

Acquisition Strategy

Management

Status of Interest-bearing Debt

FinanceCompliance

Environmental Analysis and Management Policy

Appendix

th fiscal
Total
Total interest-bearing
interest-bearing debt
debt asas ofof thethe endend ofof thethe 55th
fiscal period
period 44.1
44.1 billion
billion yen
yen

Fukuoka REIT Successfully Fixed Interest Rates in the 4th Period

27

Presentation of Accounts for Fifth Fiscal Period

Portfolio

Acquisition Strategy

Management

FinanceCompliance

Environmental Analysis and Management Policy

Itemization of Borrowings
Type

LenderShortterm debt

Repayment
Maturity

Nishi-Nippon City Bank

2,000,000,000

2007.2.27

2008.2.27

1,500,000,000

2007.2.27

2008.2.27

Mizuho Corporate Bank

1,500,000,000

2007.2.28

2008.2.29

Mitsubishi UFJ Trust and Banking

1,500,000,000

2007.2.28

2008.2.29

Payment
MethodAnnual Interest

Interest

Description

Floating

No collateral
No guarantee

0.98818% (*1)
Lump sumupon maturity

0.98818% (*1)
0.95636% (*2)

Lump sumupon maturity

0.93636% (*2)

Floating

6,500,000,000

Development Bank of Japan

12,000,000,000

2004.11.9

2009.8.31

1.39000%

Fixed

Aozora Bank, Fukuoka Bank, Nishi-Nippon City Bank,
Oita Bank, Iyo Bank, The Bank of Saga, EighteenthBank, Miyazaki Bank, Yamaguchi Bank, Shinwa Bank,
Chikuho Bank

6,600,000,000

2005.6.29

2008.6.23

1.03636% (*3)

Floating

Mizuho Corporate Bank, Norinchukin Bank, Shinkin
Central Bank, Hiroshima Bank, Iyo Bank, The Bank ofSaga, Yamaguchi Bank, Higo Bank, Shinwa Bank

10,000,000,000

2006.8.25

2010.7.30

1.92250% (*4)

Made fixed(*4)

Fukuoka Bank

2,000,000,000

2006.8.25

2011.7.29

Nishi-Nippon City Bank

2,000,000,000

2006.8.25

2011.7.29

2.05174%

The Dai-ichi Mutual Life Insurance

1,000,000,000

2006.8.25

2011.7.29

2.05174%

Shinsei Bank

1,000,000,000

2006.8.25

2011.7.29

2.00174%

1,000,000,000

2006.9.29

2011.7.29

1.80296%2007.2.28

2007.3.30

Sumitomo Trust and Banking
Subtotal

Commitment line

Borrowing
Date

Sumitomo Trust and Banking

SubtotalLong-termdebt(as of February 28, 2007)
Amount (JPY)(new transaction in 5th period)

Commitment line
agreement (1)Commitment line
agreement (2)Lump sumupon maturity

2.05174%

No collateral
No guarantee

Fixed

35,600,000,000

Fukuoka Bank, Resona Bank, Kumamoto Family
Bank, Saikyo Bank and Shinwa Bank (*5)

2,000,000,000

Subtotal

2,000,000,000

Total

44,100,000,000

Type

AppendixLenderCredit Limit (JPY)

Lump sumupon maturity

Commitment Period
Start
End

Fukuoka Bank

3,000,000,000

2006.6.29

2007.6.29

Fukuoka Bank, Resona Bank, Kumamoto
Family Bank, Saikyo Bank and Shinwa
Bank

5,000,000,000

2006.8.25

2007.8.23

Total

8,000,000,000

0.95636% (*2)

No collateral
No guarantee

Description
No collateral
No guarantee(*1) From February 27, 2007 to March 30, 2007 (not inclusive of that day)(*2) From February 28, 2007 to March 30, 2007 (not inclusive of that day）(*3) From December 26, 2006 to March 23, 2007 (*4) Fukuoka REIT has concluded a swap agreement to fix interest
rates on borrowings with floating interest and the interest rate at which the swap agreement was concluded is entered. (*5) These are the borrowings for Commitment Line 2.

All Borrowings of Fukuoka REIT are Now Unsecured

28

Presentation of Accounts for Fifth Fiscal Period

Portfolio

Acquisition Strategy

Management

FinanceCompliance

Environmental Analysis and Management Policy

Appendix

LTV Control

Fukuoka REIT has Capacity to Borrow an Additional 15 to 20 Billion Yen

29CompliancePresentation of Accounts for Fifth Fiscal Period

Portfolio

Acquisition Strategy

Management

FinanceCompliance

Environmental Analysis and Management Policy

Appendix

Organizational Structure of Asset Manager
Organizational Chart of
Fukuoka Realty
Full-time directors and employees: 39(as of April 10, 2007)■Investment Management Committee (8)President (1), Investment Department Managers (4), Finance Department General Manager (1), Planning Department General Manager (1) and Compliance Officer (1)■Compliance Assessment Committee (3)Compliance Department General Manager (lawyer) (1), and Outside Compliance Committee Members (lawyer and real estate appraiser) (2)◯Certifications of Full-time Staff*Real estate agents (10)*Condominium manager (1)*Lawyer (1)*Real estate appraisers (2)*Real estate consultant (1)*SME analysts (2)*First class architect (1)*Japanese securities analysts (2)*MBA holders (5)*Building managers (3)*Tax attorney (1)Note) Figures in parentheses represent the number of people

Group of Professionals with a Wealth of Local and Real Estate Finance Knowledge and Expertise31

Presentation of Accounts for Fifth Fiscal Period

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Acquisition Strategy

Management

FinanceCompliance

Environmental Analysis and Management Policy

Appendix

Decision-Making Process of Fukuoka REIT

Fukuoka REIT has a Strict Compliance System that Matches the Risk Perception of Capital Markets

32

Environmental Analysis
and Management Policy

Presentation of Accounts for Fifth Fiscal Period

Portfolio

Acquisition Strategy

Management

FinanceCompliance

Environmental Analysis and Management Policy

Appendix

Office Lease Market Trends in Fukuoka

Vacancy
Vacancy Rate
Rate ofof Office
Office Buildings
Buildings

Average
Average Rent
Rent ofof Office
Office Buildings
Buildings (excluding(excluding common
common expenses)
expenses)Note) Each of the above graphs was prepared by Fukuoka Realty based on data provided by Ikoma Data Service System.

Occupancy Rate is Steadily Rising34

Presentation of Accounts for Fifth Fiscal Period

Portfolio

Acquisition Strategy

Management

FinanceCompliance

Environmental Analysis and Management Policy

Appendix

Shift in Supply-Demand Balance (Comparison of Fukuoka and Tokyo)
Shift
Shift inin Supply-Demand
Supply-Demand Balance
Balance forfor Fukuoka
Fukuoka City
City (1993-2006)(1993-2006)
Major new supply triggers
demandTotal
Total Rental
Rental Office
Office Area
Area inin
Major(as ofof 2006)
2006)
Major Cities
Cities Nationwide
Nationwide (asOver half of the supply is from
non-local real estate companies

New supply over the past three
years is low

77 buildings that havemore than 2,000 tsubos offloor space and satisfy
the new anti-seismic standards

Note) The above Total Rental
Office Area in Major Cities
Nationwide (as of 2006) was
prepared by Fukuoka Realty
based on data prepared by
Ikoma Data Service System.

Note 1) This is calculated as (vacant area/total rental office area) x 100.
Note 2) The total rental office area of each year is multiplied by the occupancy (100% - vacancy) to calculate the actual floor area used by tenants (occupied
floor area). The new demand area for that year is arrived at by then determining the difference between the concerned year and its previous year.
Note 3) This is the total lease area of the rental office buildings completed in each year between January and December.
Note 4) The above graph was prepared by Fukuoka Realty based on data provided by Ikoma Data Service System.

There is a Possibility that Major New Supply will Stimulate Latent Demand

35

Presentation of Accounts for Fifth Fiscal Period

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Acquisition Strategy

Management

FinanceCompliance

Environmental Analysis and Management Policy

Map of New Development Trends in Fukuoka Office Market
Aqua Hakata Bu
Building
Floor Space: 3,945 tsubos
Developer: Round Hill
Completion: March 2008

Hakata Bu
Building*

Floor space: 5,692 tsubos
Developer: Fukuoka Shoji
Completion: April 2008

Appendix(The asterisk indicates a tentative
name and all completion dates arescheduled dates.)

Reisenmachi
Reisenmachi Building*Floor space: Unknown
Developer: Mitsui FudosanCompletion: Unknown

Hakata Ekimae
Building*

Floor space: 4,260 tsubos
Developer: Asset Managers
Completion: June 2008

Tenjin 122 Project*

Floor area: 3,250 tsubos
Developer: Taisei Corporation and Sekisui House
Completion: March 2009

Kita Bu
Building*

Floor space: 7,429 tsubos
Developer: Denki Building
Completion: May 2008

Buildings to becompleted in 2007

Buildings to becompleted in 2008

Buildings to becompleted in 2009

Higashihie Business Center*

Yakuin Project*

Floor space: 5,866 tsubos
Developer: Fukuoka Jisho andNomura FudosanCompletion: February 2009

Floor space: Unknown
Developer: Tokyo Tatemono
Completion: Unknown

Kamiyo Yakuin
Building

Floor Space: 3,765 tsubos
Developer: Kamiyo FudosanCompletion: March 2007

Note) The above was created by Fukuoka Realty.

Gion Project*

Floor space: Unknown
Developer: Tokyo Tatemono
Completion: Unknown

Meiji Yasuda Watanabe Building

Floor space: 3,404 tsubos
Developer: Meiji Yasuda Life Insurance and Watanabe Jisho
Completion: August 200736

Presentation of Accounts for Fifth Fiscal Period

Portfolio

Acquisition Strategy

Management

FinanceCompliance

Environmental Analysis and Management Policy

Appendix

Kyushu Shinkansen to Fully Open in 2011

Source: Fukuoka City’s “Report on Impact of Kyushu Shinkansen’s Opening on Fukuoka City”

Sole Concentration of Socioeconomic Activities on Fukuoka Metropolitan Area to Accelerate

37

Presentation of Accounts for Fifth Fiscal Period

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Acquisition Strategy

Management

FinanceCompliance

Environmental Analysis and Management Policy

Appendix

Opening of the New Hakata Station Building• Hakata Station is the largest terminal station in
Kyushu with about 340,000 users a day

Opens

2011

• The total floor area of the new station building isabout 200,000m2 (This is more than 6 times larger thanthe present Hakata Station Building and amounts to morethan 4 Tokyo Domes)

Overview
Overview ofof New
New Hakata
Hakata Station
Station Building
Building

Site area

About 22,000m2

Floor area

About 200,000m2

No. of floors

3rd basement floor – 10th floor

Usage

Station and general retail facility (department store,
specialty shops, entertainment, service, parking lot, bicycle
parking lot, etc.)

New Hakata Station Scheduled to Open Together with the Kyushu Shinkansen

38

Presentation of Accounts for Fifth Fiscal Period

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Acquisition Strategy

Management

FinanceCompliance

Environmental Analysis and Management Policy

Appendix

New Town Planning Measures
The Hakata Station District Town
Planning Promotion Working Group• The Hakata Station District Town
Planning Promotion Working Group is
the organization playing a central
role in managing the Hakata Station
District from now on.
• The Working Group isconceptualizing a worthy face for the
gateway to Kyushu and aims to work
as one with the community increating a planned town andmanaging the public space.

[Participating Companies]● Kyushu Railway (JR Kyushu)○ Japan Post
○ Hakata Station Building○ Fukuoka Traffic Center○ Mitsui Fudosan● Nishi-Nippon City Bank
○ Fukuoka Asahi Building● Fukuoka Jisho○ Fukuoka City

Gofukumachi Business Center

Taihaku Street Business Center

Planned construction siteof No. 2 Canal City

Sanix Hakata
Building

Planned construction site for
the New Hakata Station Building
Canal City Hakata
Canal City Business Center Building

Site area: 22,000m2
Floor area: 200,000m2*●indicates sponsors of Fukuoka Realty

Conceptual Strategy for the Hakata Station Area is Being Developed in Alliance with the Local Business World

39

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FinanceCompliance

Environmental Analysis and Management Policy

Appendix

Management Policy

40Appendix

Presentation of Accounts for Fifth Fiscal Period

Portfolio

Acquisition Strategy

Management

FinanceCompliance

Environmental Analysis and Management Policy

Appendix

Retail Property Description: Canal City Hakata and Preferred Silent Partnership Interest
Urban SC

Canal City Hakata
Nov 9, 2004

32bn yen

6.0％

Characteristics• Within walking distance from Hakata Station and located near the
popular area of Nakasu• Renowned tourist destination in Fukuoka with over 10 million visitors ayear• Distinguished design by Jon Jerde renowned for his work on Las Vegas’
Fremont Mall and Tokyo’s Roppongi Hills
Stores• Washington Hotel• Comme Ca Store• United Cinema (cinema complex)• OPA (Canal City OPA)
• Sports Authority• Others

Urban SC

Overview• Address:

1-chome, Sumiyoshi,
Hakata Ward,
Fukuoka City
• Total leasable area: 47,858.67m2• Built:
April 15, 1996
• Property manager: Fukuoka Jisho

Preferred Silent Partnership Interest with CCH Bridge Y.K. as Operator
Characteristics• Ownership of preferred silent partnership interest (3.4 billion yen) in CCH Bridge
Y.K.(*), a special purpose company• CCH Bridge is a special purpose company that owns the portion
outlined in white to the left (Canal City Hakata SPC portion).
• A contract to reserve acquisition of the “Canal City Hakata SPC
Owned Section” for the subject real estate was also signed
simultaneously (execution of the reservation fulfillment right by
Fukuoka REIT will establish the transaction contract at a priceappraised by the Tanizawa Appraisal Office or the Japan Real
Estate Institute).
Tenants of the Section Owned by Canal City Hakata SPC• Top luxury hotel in the region: Grand Hyatt Fukuoka (370 guest rooms)• OPA Shopping Mall (more than 100 specialty shops)• One of the largest MUJI (Mujirushi Ryohin) stores in Kyushu• Fukuoka City Theater of Shiki Theater Company• Others

42

Presentation of Accounts for Fifth Fiscal Period

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Acquisition Strategy

Management

FinanceCompliance

Environmental Analysis and Management Policy

Appendix

Retail Property Description: Park Place Oita and SunLiveCity Kokura
Regional SC

Park Place Oita
Nov 9, 2004

15.7bn yen

6.5％

Characteristics• Located in new town development next to Oita Prefectural Sports Park
(World Cup Soccer Stadium)• Near Oita-Mera Interchange with parking for about 4,000 cars
• Designed as an open mall in a forest by Jon JerdeStores• Jusco• K’s Denki• T Joy• Sports Authority• Plaza Capcom• Others

Regional SC

Overview• Address:

2-chome, Koen Dori
Nishi, Oita City
• Total leasable area: 100,716.74m2• Built:
March 26, 2002
April 17, 2002
April 28, 2004
• Property manager: FJ Real Estate

SunLiveCity Kokura
Jul 1, 2005

6.63bn yen

6.6％

Characteristics• Lies along National Highway 10 and near the Kokura Higashi
Interchange on the Kyushu Expressway with parking for about 2,000
cars• Leading regional mall in Kitakyushu region with about 110 specialty
stores centering on the SunLive Supermarket• Core development in the Kami Kuzuhara Rezoning District (about
120,000 tsubos), a large commercial zoneStore
• SunLive

Overview• Address:

2-chome, Kami Kuzuhara,
Kokura Ward, Kitakyushu City
• Total leasable area: 61,450.22m2• Built:
March 17, 2005
• Property manager: Fukuoka Jisho

43

Presentation of Accounts for Fifth Fiscal Period

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Acquisition Strategy

Management

FinanceCompliance

Environmental Analysis and Management Policy

Appendix

Retail Property Description: Square Mall Kagoshima Usuki and Kumamoto Intercommunity SC
Community SC

Square Mall Kagoshima Usuki
Sep 28, 2006

5.3bn yen

6.2％

Characteristics• Located at one of the busiest thoroughfares of Kyushu (along Prefectural
Highway 217) with 42,000 cars passing per 12 hours in 1999
• Leading category killers of each industry as tenants• Design by John Jerde creates great appeal to users• Concluded long-term leases with tenants that enjoy a high level of credibility
Overview• Address:

Stores• Sports Depo/Golf 5• Nishimatsuya• Honeys• ABC Mart
• Best Denki, etc.

Community SC

Usuki 2-chome,
Kagoshima City
• Floor space:
14,661.72m2• Built:
September 28, 2006
• Property manager: Fukuoka Jisho

Kumamoto Intercommunity SC
Nov 30, 2006

2.4bn yen

6.5％

Characteristics• Located at one of Kyushu’s busiest thoroughfares (along National Highway 57
Bypass) with 39,000 cars passing per 12 hours in 1999
• Plan to conclude long-term leasehold contracts with highly regarded tenants
Stores• Sports Depo and Golf 5• Starbucks(drive thru coffee shop)

Overview• Address:

Kozono 1-chome,
Kumamoto City
• Floor area:
6,968.66m2• Built:
November 30, 2006
• Property manager: Fukuoka Jisho

44

Presentation of Accounts for Fifth Fiscal Period

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Acquisition Strategy

Management

FinanceCompliance

Environmental Analysis and Management Policy

Appendix

Retail Property Description: Hara SATY
Regional SC

Hara SATY
Mar 1, 2007

5.41bn yen

6.8％

Characteristics• Excellent location for retail property in Fukuoka suburb• 286,000 people within 3km radius (equivalent to a suburb in the Tokyo
metropolitan area) and lacks competitor with equal size in the area
• First SATY to open in Fukuoka (following full-scale renovation of a former
Daiei store)• Long-term fixed lease agreement with Mycal Kyushu has been concluded(12 years, no early cancellation allowed, no decrease in rents allowed)
Store• SATY
Overview• Location: Sawara Ward, Fukuoka City
• Floor space: 27,580.75m2• Built: October 26, 1976
(Renovated in spring 2007)• Property Manager: Fukuoka Jisho(Excerpt from April 3, 2007 article in Nihon Keizai Shimbun)

AEON Kyushu Merging with Mycal Kyushu
AEON Kyushu and Mycal Kyushu are merging on August 21 with the continuing company being
AEON Kyushu. The combined net sales for the two firms as forecast for fiscal 2006 will be thelargest among large stores in Kyushu and the chain will boast 95 stores. AEON will own 62.78% of
the company. SATY will remain as the store name of former Mycal Kyushu stores.

45

Presentation of Accounts for Fifth Fiscal Period

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Acquisition Strategy

Management

FinanceCompliance

Environmental Analysis and Management Policy

Appendix

Office Property Description: Canal City Business Center Building and Gofukumachi Business Center
Class A Building

Canal City Business Center Building
Nov 9, 2004

14.6bn yen

6.2％

Characteristics• Pioneer of multi-use office and retail complexes• Enjoys benefit of popularity and name recognition of Canal City Hakata• Used by TOTO Ltd. as Fukuoka office and showroom
Tenants• TOTO• Bell System 24• USEN Corporation• Aflac Japan• Mitsubishi Electric Building
Techno-Service• Others

Class A Building

Overview• Address:

1-chome, Sumiyoshi,
Hakata Ward,
Fukuoka City
• Total leasable area: 23,018.04m2• Built:
April 15, 1996
• Property manager: Fukuoka Jisho

Gofukumachi Business Center
Nov 9, 2005

11.2bn yen

6.2％

Characteristics• Faces Meiji Dori and Taihaku Street and directly connects to Gofukumachi
Subway Station• Designed by Michael Graves, designer of the Museum of Newark• Top Quality Specs in Region■1 floor: 620 tsubos ■Ceiling height: 2,900mm ■Optic fiber cables• Sanyo Shimpan, NTT West Japan-Kyushu, Sony Life Insurance and otherleading firms use the premises as a call center
Tenants• Sanyo Shimpan• NTT West Japan-Kyushu• Sony Life Insurance• Suntory• Sunny• Others

Overview• Address:

Kami Gofukumachi,
Hakata Ward, Fukuoka City
• Total leasable area: 19,906.21m2• Built:
October 16, 2003
• Property manager: Fukuoka Jisho

46

Presentation of Accounts for Fifth Fiscal Period

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Acquisition Strategy

Management

FinanceCompliance

Environmental Analysis and Management Policy

Appendix

Office Property Description: Sanix Hakata Building and Taihaku Street Business Center
Class A Building

Sanix Hakata Building
Sep 30, 2005

5.9％

4.4bn yen

Characteristics• Two-minute walk from Hakata Station (Shinkansen), and Fukuoka Airport isa mere five-minute subway ride away
• The concentration of hotels and government offices surrounding thebuilding make it an optimal location for business
Overview
Tenants• Address:
2-chome, Hakataeki• Sanix
Higashi, Hakata Ward,• The Nishi-Nippon
Fukuoka City
City Bank• Total leasable area: 6,293.67m2• ROHM• Idemitsu Kosan• Built:
March 31, 2001
• Others• Property manager: Fukuoka Jisho

Class A Building

Taihaku Street Business CenterMar 16, 2006

7bn yen

6.0％

Characteristics• Superbly located with excellent accessibility: ten-minute walk from Hakata
Station and a two-minute walk from Gion Subway Station; located along the“Taihaku Street” central thoroufare• Exemplary facility specs for Fukuoka City office buildings:- Functional floor plan of 333 tsubos, 2.7m ceiling height, free accessfloor of 100mm, optical fiber cables, independent air conditioning
systems, etc.
• Accompanied by luxurious 59-room residential tower- 1LDK – 3LDK units tomeet requirements of downtown commuters
Tenants• NTT Comware• Tokio Marine Nichido
Jimu Outsourcing• Fujitsu Network Solutions• Tokio Marine & Nichido
Anshin Life Insurance• Others

Overview• Address:
3-21 Gokushomachi, Hakata Ward, Fukuoka City
• Total leasable area: Office Tower: 11,225.30m2
Residential Tower:3,427.38m2• Built:
March 7, 2002
• Property manager: Fukuoka Jisho

47

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Management

FinanceCompliance

Environmental Analysis and Management Policy

Residential Property Description: City House Tenjin Keyaki DoriResidential(tentative)

Appendixand Amex Akasakamon Tower

City House Tenjin Keyaki Dori (tentative)
Dec 20, 2007

1.11bn yen

5.4％

Characteristics• Near the Tenjin district with good access and walking distance from Tenjin Station andAkasaka Station on the Municipal Subway Line• Planned to have 13 stories above ground (total floor area of 3,531.37m2) and havethirty 2LDK units (about 58m2 per unit) and twelve 3LDK units (about 75m2 per unit)• Anti-seismic structure for high safety and security
Overview• Address:• Total floor area:• Scheduled completion date:• Property manager:

Residential

Kego 2-chome, Chuo Ward, Fukuoka City3,531.37m2
November 30, 2007
DMC (a member of the Daio Group, a giant residential management company in the Tenjin area) (planned)

Amex Akasakamon Tower
Sep 1, 2006

2.06bn yen

5.4％

Characteristics• Property is near the Tenjin area and enjoys strong transit convenience (withinwalking distance of the metro subway’s Akasaka and Tenjin stations)• A tower rental condominium with 2LDK（55.58m2）to 4LDK (144.84m2) units.
Overview• Address: 2-chome Maizuru, Chuo Ward, Fukuoka City
• Leasable area: 4,755.14m2• Built: July 26, 2005
• Property manager: DMC (a member of the Daio Group, a giant residential
management company in the Tenjin area)48

Presentation of Accounts for Fifth Fiscal Period

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Acquisition Strategy

Management

FinanceCompliance

Environmental Analysis and Management Policy

Appendix

Construction Confirmation Inspection Agencies
Property Name

Canal City Hakata

Construction
Completion Date
Name
New
construction
andrenovation
work

April 15, 1996

March 26, 2002

Construction
Confirmation
AgencyConstruction
Confirmation
Inspection Agency

Design Companies

Contractor

PML Value

Fukuoka Jisho First Class Architect’s
Office, FJ Urban Development,
Takenaka Corporation and Zenitaka
Corporation Design Consortium (Note 1)

Canal City Hakata New
Construction Zone 1
Construction Joint
Venture and Takenaka
Corporation

Fukuoka City

Asanuma Corporation,
Fujita Corporation

Oita City

Oita City

14.5%

A 8.0%
Fukuoka City

B 7.6%
C 5.3%
D 11.1%New
constructionand expansion
work

April 17, 2002
April 28, 2004

Asanuma Corporation Kyushu Branch,First Class Architect’s Office
Fujita Corporation Kyushu Branch FirstClass Architect’s Office

SunLiveCity KokuraNewconstruction

March 17, 2005

Matsui and Kono Joint Design Venture

Penta-Ocean
Construction Co., Ltd.

Japan ERI Co.,
Ltd.

Japan ERI Co., Ltd.

6.7%

Gofukumachi Business Center

New
construction

October 16, 2003

Institute of New Architecture Inc.

Takenaka Corporation

Fukuoka City

Fukuoka City

4.0%

Canal City Business Center BuildingNew
construction
andrenovation
work

April 15, 1996

Fukuoka Jisho First Class Architect’s
Office, FJ Urban Development FirstClass Architect’s Office

Canal City Hakata New
Construction Zone 2
Construction Joint
Venture, Zenitaka
Corporation

Fukuoka City

Fukuoka City

6.9%

Sanix Hakata BuildingNew
construction

March 31, 2001

Maeda Corporation First Class
Architect’s Office

Maeda Corporation
Kyushu Branch

Fukuoka City

Fukuoka City

4.3%

Taihaku Street Business Center

New
construction

March 7, 2002

Yamashita Sekkei, Inc.

Takenaka Corporation

Fukuoka City

Fukuoka City

7.5%

Square Mall Kagoshima Usuki

Newconstruction

September 28,
2006

Yamashita Sekkei, Inc.

Fujita Corporation

Kagoshima City

Kagoshima City

9.6%

Kumamoto Intercommunity SC

New
construction

November 30,
2006

Kajima Corporation

Kajima Corporation

Japan ERI Co.,
Ltd.

Japan ERI Co., Ltd.

16.3%

Amex Akasakamon Tower

New
construction

July 26, 2005

Masaki Architect & Associates

Tada Corporation
Kyushu BranchJapan ERI Co.,
Ltd.

Japan ERI Co., Ltd.

11.6%

City House Tenjin Keyaki Dori(tentative)New
construction(not yetcompleted)

Planning Office LECS Co., Ltd.

Daiho Corporation
Kyushu BranchJapan ERI Co.,Ltd.

(not yet completed)－

Hara SATY

New
construction

October 26, 1976

Pal Corporation

Obayashi Corporation

Fukuoka City

Fukuoka City

13.2%

Park Place Oita

Portfolio(Note 1) This consortium is the joint design venture by the designers of each zone.
(Note 2) Of multiple assumed earthquake scenarios, the portfolio PML values of Fukuoka REIT have been calculated by assuming the central part of Fukuoka City as the earthquake epicenter.
(Note 3) Zones A through D of Canal City Hakata are classified by building status surveys. A indicates the Washington Hotel building, and B the amusement building, C the megastore building and D the common areas.

4.9%

49

Presentation of Accounts for Fifth Fiscal Period

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Acquisition Strategy

Management

FinanceCompliance

Environmental Analysis and Management Policy

Appendix

Analysis of Investor Attributes and Volume Ownership Reports
Distribution
Distribution by
by Investor
Investor Category
Category (Breakdown(Breakdown ofof Investment
Investment Units)
Units)Major
Major Investors
Investors (End(End ofof 5th5th Fiscal
Fiscal Perriod)
Perriod)Note) Figures in parentheses represent the number of investment units.

FilingFiling ofof Volume
Volume Ownership
Ownership Report
Report50

Presentation of Accounts for Fifth Fiscal Period

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Management

FinanceCompliance

Environmental Analysis and Management Policy

Appendix

History of Investment Unit PriceHistory
History ofof Investment
Investment Unit
Unit Price
Price

51

AppendixⅡ

52

Presentation of Accounts for Fifth Fiscal Period

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Acquisition Strategy

Management

FinanceCompliance

Environmental Analysis and Management Policy

Appendix

Where is Fukuoka/Kyushu

Tokyo
Osaka

Kyushu Region

Fukuoka Pref.

■ 7 prefectures■ “#16” GDP in the world■ 14mm Population■ Industry－Semiconductor－Automotive－Processed foodproducts■ 1.5h flight from Tokyo, Seoul,
Shanghai■ Population: 2.47mm(Metropolitan Area), 5mm(Pref.)■ Strong history of commerce with
Korea and China of more than
1,000 years

Kyushu, Westernmost Island of the 4 Main Japanese Islands, is the Closest to Asia

53

Presentation of Accounts for Fifth Fiscal Period

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FinanceCompliance

Environmental Analysis and Management Policy

AppendixSize of the Fukuoka Metropolitan Area
Populations
Populations ofof Major
Major JapaneseJapanese
Metropolitan
Metropolitan Areas
Areas
Fukuoka Metropolitan Area
Fukuoka City and municipalities from which 10% or more of the population
commutes to school or work in Fukuoka City
Fukuoka City population: 1.34 million
Fukuoka metropolitan area population: 2.37 million

Tokyo
Metropolitan Area
30.28 million people

Osaka
Metropolitan Area
12.20 million people

Fukuoka
Metropolitan Area
2.47 million people

NagoyaMetropolitan Area
5.46 million people

Source：Tabulated by the Japan Economic Research Institute based on
the 2000 National Census conducted by the Ministry of Internal Affairs
and Communications

Fukuoka is the Fourth Largest Metropolitan Area in Japan following Tokyo, Osaka and Nagoya

54

Presentation of Accounts for Fifth Fiscal Period

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FinanceCompliance

Environmental Analysis and Management Policy

Appendix

Kyushu’s GDP is Near Australia’s in Size
CountryCountry Comparison
Comparison ofof Kyushu’s
Kyushu’s GDP
GDP

Source： Global Statistics 2005: National Economic Figures issued by the Statistics
Bureau of the Ministry of Internal Affairs and Communications and the2002 Prefectural Citizens Economic Figures issued by the Cabinet Office’s
Economic and Social Research Institute

Kyushu’s
Kyushu’s Commercial
Commercial Capital:
Capital:Concentration
Concentration on
on Fukuoka
Fukuoka

Source： From the left, the Area Study of National Prefectures and Municipalities (official values as of October 1, 2004) issued by the Geographical Survey Institute, Estimated Present
Population on October 1, 2004 issued by the Statistics Bureau of the Ministry of Internal Affairs and Communications, 2002 Prefectural Citizens’ Economic Figures issued by the
Economic and Social Research Institute of the Cabinet Office and the 2002 Commercial Statistics Study of the Ministry of Economy, Trade and Industry

55

Presentation of Accounts for Fifth Fiscal Period

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Management

FinanceCompliance

Environmental Analysis and Management Policy

Appendix

Growth in Automobile and Semiconductor Industries
Long-termLong-term Fluctuations
Fluctuations inin Capital
CapitalInvestment
Investment by
by Manufacturers
Manufacturers

Distribution
Distribution ofof PrimaryPrimary Automobile
Automobile andand
Semiconductor
Semiconductor Factories
Factories inin Kyushu
KyushuDENSO Kitakyushu Plant(Kitakyushu City)

Toyota Motors Kyushu, Kanda Plant(Kanda-machi, Fukuoka Prefecture)
Nissan Motor, Kyushu Plant(Kanda-machi, Fukuoka Prefecture)

Toyota Motors Kyushu(Wakamiya City, Fukuoka Prefecture)

Capital investment by manufacturingindustry in the Kyushu area:

673.2 bn yen(planned for fiscal 2006)

ROHM Fukuoka(Yukuhashi City, Fukuoka Prefecture)

Power Device Division,
Mitsubishi Electronic(Fukuoka City)

Daihatsu Auto Body
(Nakatsu City, Oita Prefecture)
Oita Canon(Kunisaki City, Oita Prefecture)

Tokyo Electron Kyushu(Tosu City, Saga Prefecture)

Toshiba, Oita Plant(Oita City)
Nagasaki Technology Center,Sony Semiconductor Kyushu(Isahaya City, Nagasaki Prefecture)
Aishin Kyushu(Jonan Town,
Kumamoto Prefecture)

NEC Kyushu(Kumamoto Prefecture)

Honda Motor,
Kumamoto Plant

Asahi Kasei
Microsystems Kyushu(Nobeoka City,
Miyazaki Prefecture)

Fuji Photo Film
(Kikyuyo Town,
Kumamoto Prefecture)
Fujitsu Integrated
Microtechnology, Kyushu Plant(Satsuma-Sendai City, Kagoshima
Prefecture)

Automobile
IT

Miyazaki Oki Electric(Kiyotake Town, Miyazaki Prefecture)
KYOCERA Corporation Kagoshima
Kokubu Plant(Kirishima City, Kagoshima Prefecture)

Source: Nihon Keizai Shimbun, April 29, 2006

Automobiles and Semiconductors Support Expansion in Capital Investment

56

Presentation of Accounts for Fifth Fiscal Period

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Management

FinanceCompliance

Environmental Analysis and Management Policy

Appendix

TOYOTA MOTOR KYUSHU Leads Expansion of Exports

Port
Port ofof Hakata
Hakata Expands
Expands Handling
Handling ofof Containers
Containers
History of Handling Volume of International Trade
Containers (comparison among principal ports)

ToyotaToyota Establishing
Establishing Second
Second Largest
Largest Production
Production
Base
Base inin JapanJapan
Sales of Toyota Motor Kyushu

300
Port of Tokyo
Port of Yokohama
Port of Nagoya
Port of Kobe
Port of Osaka
Port of Hakata
Japan total

250
200
150
100
50
0

1996

1997

1998

1999

2000

2001

2002

2003

(Note) Graph formed after establishing the figures in 1996 as 100
Source: Institute for Advanced Port Transportation of Japan
Ports and Harbours Bureau of the Ministry of Land, Infrastructure and Transport

2004

2005

Source: Nihon Keizai Shimbun, July 6, 2006

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Presentation of Accounts for Fifth Fiscal Period

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Acquisition Strategy

Management

FinanceCompliance

Environmental Analysis and Management Policy

Appendix

Estimated Future Population Changes
Population
Population Change
Change inin Principal
Principal Metropolitan
Metropolitan Areas
Areas inin JapanJapan(Indicated(Indicated byby index
index with
with figures
figures inin 1985
1985 asas 100)100)

Fukuoka Metropolitan Area’s Population will Continue to Grow

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Presentation of Accounts for Fifth Fiscal Period

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Management

FinanceCompliance

Environmental Analysis and Management Policy

Appendix

Population Growth
Comparison
Comparison ofof Population
Population Growth
Growth in
in Major
Major
Metropolitan
Areas
Metropolitan Areas

Comparison
Comparison ofof Students
Students per
per 1,000
1,000 People
People(Ordinance(Ordinance designateddesignated cities;
cities; universities
universities andandjuniorjunior colleges
colleges excluded)
excluded)

Automobiles and Semiconductors Support Expansion in Capital Investment

59

Presentation of Accounts for Fifth Fiscal Period

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Management

FinanceCompliance

Environmental Analysis and Management Policy

Appendix

Percentage of Change in Fukuoka City Land Prices (2006 → 2007)
Percentage
Percentage ofof Change
Change inin Fukuoka
Fukuoka City
City
(2006
→
2007)(YOY)Land
PricesLand Prices (2006 → 2007)(YOY)

Percentage
Percentage ofof Change
Change inin Fukuoka
Fukuoka City
City
Land
(2005 →
→ 2006)(YOY)2006)(YOY)Land Prices
Prices (2005(Source) Official land prices published by the Ministry of Land, Infrastructure and Transport and the Geographical Survey Institute’s 1/25000th Scale Map of Fukuoka (based on spatial data)
Note 1) All of the reference sites for the land study located in central Fukuoka City are shown.
Note 2) The red bar indicates locations where land prices have increased and the red numerals indicate the increase rate in land prices. The blue bars indicate where land prices have decreased and the blue numerals indicate the decrease rate in land
prices.

The 44.1% Increase at Hakata Ekimae 1-chome was the Third Highest Increase in Commercial Land Prices in Japan

60

Presentation of Accounts for Fifth Fiscal Period

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FinanceCompliance

Environmental Analysis and Management Policy

Appendix

Consumption Trends
Fluctuations
Fluctuations inin Monthly
Monthly (YOY)(YOY) ComparisonsComparisons ofof Large
Large Retail
Retail StoreStore Sales
Sales
(June
(June 2005
2005 -- February
February 2007)
2007)

Source: Commercial Sales Statistics issued by the Ministry of Economy, Trade and Industry

Fukuoka’s Retail Market has a Strong Base

61

Presentation of Accounts for Fifth Fiscal Period

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FinanceCompliance

Environmental Analysis and Management Policy

Appendix

Primary Shopping Centers of Kyushu
Kitakyushu
metropolitan
area

Fukuoka metropolitan area

Sasebo metropolitan area

Saga
metropolitan
area

Kurume metropolitan area

Nagasaki metropolitan area

(Source) Floor area: Kyushu Factbook (2006 edition) published by
the Fukuoka Branch of the Development Bank of Japan;
the shopping centers with floor spaces of at least
15,000m2 were entered
Population: the 2000 national census issued by theStatistics Bureau of the Ministry of Internal Affairs andCommunications(Note 1) The length of the graph illustrates the floor area size
(Note 2) Metropolitan Areas are the central cities and municipalities
where at least 10% of their populations work or study inthe central cities and this is based on the workers due toresidence, workers who are 15 or older in themunicipalities and students commuting who are 15 orolder in the 2000 national census issued by the Statistics
Bureau of the Ministry of Internal Affairs andCommunications.

Oita
metropolit
an area

Kumamoto
metropolitan area

Miyazaki metropolitan
area

Floor Area
Kagoshima metropolitan area

Miyakonojo
metropolitan
area

33,000m2

Population
100,000
500,000
1,000,000

Fukuoka REIT Carefully Discerns the Scope of the Trade Area and Competitive Environment in Selecting its Strategic Focus Areas

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Presentation of Accounts for Fifth Fiscal Period

Portfolio

10 HIGH ROLLERS

Acquisition Strategy

Management

FinanceCompliance

Environmental Analysis and Management Policy

Las Vegas(U.S.)

Beyong the Strip

Fukuoka(Japan)City of Substance

Munich(Germany)

Rich and Richer

AppendixLong the fastest-growing metropolis in
America, sin city is building more than casinos.
There are many would-be ‘Gateways to Asia.’ This
one’s for real.
A bright spot in the gloaming, but for how long?

Capital of Magnet

London(U.K.)

London’s gain is Manchester’s loss, but Brits worry
more about Shanghai.

Toulouse(France)‘It’s Airbusville’Nanchang(China)Welcome, World

Moscow(Russia)

The Great Pump

Ghaziabad(India)An ancient city has evolved into a new type: themultinational town.
A star marks the unlikely epicenter of China’s
second-city explosion.
Moscow draws all the new arrivals, from babies tofortune seekers.

Ring of Change
A factory suburb of Delhi, now surrounded by poshhigh rises.

Goyang(South Korea)

Lovely Little Rebels

Florianopolis(Brazil)Bigger yet Better

Built by the state, an affluent enclave is now battlingit.
On ‘Magic island,’ a virtuous cycle began with a ban
on heavy industry.

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Appendix

POINT 1• Capital investment in the manufacturingindustry in Kyushu has grown as fast as
52% in recent years• Fukuoka residents refer to Kyushu as Car
Island, or Silicon Island

POINT 2
• 50% increase in containers handled at
Hakata Port, the main port of Fukuoka City,
over the past six years• Toyota established its second manufacturingbase in Japan in Kyushu and started shipping
Lexus models to China from Hakata this year

POINT 3• Cultural assets and festivals that attract
tourists• 50% increase in foreign tourists over the
past six years• Consumption propelled by Asian tourists andyoung visitors from other Kyushu areas

64Presentation of Accounts for Fifth Fiscal Period

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Acquisition Strategy

Management

FinanceCompliance

Increasing Number of Foreign Tourists

Regional Breakdown of Foreigners
Entering Japan

Breakdown by Principal Seaport

160,000

100%

Port of Tokyo
Port of Yokohama
Port of Osaka
Port of Kobe
Port of Shimonoseki
Port of Hakata

140,000
120,000

Appendix

Fukuoka Has Strong Asian Features

Fluctuation in the Number of Foreigners
Entering Japan(people)Environmental Analysis and Management Policy

3.5

1.0
3.2
3.0

14.1
80%

12.2

100,000

60%

80,00092.7
40%60,00068.2

40,000No nationality
OceaniaSouth America
North America
AfricaEuropeAsia

20%

20,000
0%

0

2000

2001

2002

2003

All of Japan

2004

Fukuoka

Source: Immigration Bureau of Japan of the Ministry of JusticeSource: Immigration Bureau of Japan of the Ministry of Justice

Cultural Assets and Festivals that Attract Tourists

Hakata Gion Yamagasa Festival

Hakata Dontaku Festival

Kyushu National Museum

Kyokusui-no-en festival at Dazaifu
Tenmangu shrine

65