Sustainability

Role of the Planning Department
The Planning Department oversees matters related to corporate policies, general affairs and human resources, accounting,and guided by the fundamental principle of “Act Local, Think Global,” we believe it is essential to create an environment
where all employees can contribute to regional revitalization and the creation of an attractive community.

Organizational Approach to Sustainability

Sustainability Initiatives and GRESB

Keiichi Shimoda

emission reduction measures, it becomes imperative to engage
multiple business partners and afﬁliated companies in these efforts.
We acknowledge that the challenges are multifaceted, as this is
not a task that can be solely accomplished within our organization.
Regarding materiality, we identiﬁed issues that are deemed highly
important for both society and stakeholders, as well as critical forbusiness continuity through discussions at the management level,validation, and approval of their relevance. Moving forward, we aim
to assess the changes in the social and environmental landscape,consider the current evaluations, and explore the items subject
to materiality review. We will continue to proactively engage inactivities that prioritize sustainability.

■ Chronology of FRC Initiatives

2018

Establishes Sustainability Policy
Creates Sustainability Promotion Committee
Announces GRESB evaluation results
Signs and registers with PRI
Signs and registers with PFA21
Certified as a “Fukuoka ʻWork Style Reformʼ Promotion Company”

2019

Issues integrated report
Identifies materiality
Implements sustainability finance2022

Registers as a“Master”in the Fukuoka City Well-Being& SDGs Registration System
Endorses TCFD recommendations
Joins TCFD Consortium

2023

Registers with the Fukuoka Prefecture
SDGs Registration System

Fukuoka REIT Corporation 2023

Data Section

24

FRC is a region-speciﬁc REIT with strong ties to Fukuoka andKyushu. In identifying materiality, we have incorporated an emphasison contributing to the local community. Our commitment tofostering connections with the local community is evident throughactive participation in area management organizations such as the
Hakata Town Planning Promotion Council, as well as involvement
in local events such as the Hakata Gion Yamakasa Festival and the
Hakata Dontaku Festival. In the Kyushu region, we have consistently
implemented the corporate version of the hometown tax program
since ﬁscal 2020, extending our participation beyond Fukuoka to
include Saga Prefecture, Oita Prefecture, Kumamoto Prefecture
Kagoshima Prefecture, and Okinawa Prefecture every year.
Our current primary focus is on addressing climate changerisks. In September 2022, we expressed our support for the
TCFD and concurrently joined the TCFD Consortium. We are now
organizing disclosures based on the TCFD recommendations,which encompass Governance, Strategy, Risk Management, andMetrics and Targets. We are also setting climate-related scenarios,
conducting impact assessments for each scenario, and actively
considering strategies to address them. Given the signiﬁcantchanges in recent abnormal weather patterns, we recognize thisas a crucial issue.
In this integrated report, we disclose our CO2 emissions (Scope
1 + 2). In terms of reducing CO2 emissions, we have set a goal toachieve a 35% reduction by 2030 (compared with 2019 levels).
Calculating emissions within FRCʼs supply chain is a complex
endeavor, and as we transition into the phase of implementing

Executive Officer in charge of Planning
Department and General Manager of
Sustainability Promotion OfficeSustainability

Since going public, we have been actively pursuingsustainability initiatives, including obtaining DBJ Green Building
certification. In our overseas investor relations activities in 2017,
we began to receive increasing inquiries from investors about
ESG. Recognizing the need to align with global standards, we
decided to participate in GRESB in 2017 to further promote
our initiatives in sustainability.
In our efforts to set goals for sustainability initiatives, wesought to deepen our understanding of ESG and sustainability
with various stakeholders, including inviting investors, analysts,
and issuers engaged in innovative practices to an IR workshop
held with the Japan Investor Relations Association to impartknowledge on non-ﬁnancial information disclosure. We havealso endorsed the Principles for Responsible Investment (PRI)
and the Principles for Financial Action for the 21st Century(PFA21).
Through such initiatives, we will continue to conduct asset
management with a focus on sustainability, aiming to contributeto the promotion of urban development and revitalization of thelocal economy in Fukuoka and the Kyushu region as Japanʼsﬁrst region-speciﬁc REIT.
In our ﬁrst GRESB Real Estate Assessment in 2018, weearned a 4-star rating, maintaining GRESB evaluations annually
since. In 2023, as in 2022, we achieved a 4-star rating in the
GRESB Real Estate Assessment, along with a Level A rating in
the GRESB Disclosure Assessment.

establishing internal structures, collaborating with external
stakeholders, considering specific goals and measures related
to information disclosure policies, and monitoring the progressof implementation initiatives. The practical responsibilities
for goals determined by the committee are held by the
Sustainability Officer, with the general manager of the Planning
Department overseeing the role.

Growth Strategy

In 2018, to promote sustainability through considerationfor environmental, social, and governance (ESG) factors,
FRC established the Sustainability Policy and Regulations
Concerning Sustainability Management. We also formed
the Sustainability Promotion Committee, consisting of fulltime directors, executive officers, and department heads,
to oversee these efforts. The committee is responsible forPlanning
Department

Who We Are

and sustainability as its delegated responsibilities. Understanding the overall activities of the Asset Management Company

In 2023, marking the sixth year, we conducted a comprehensive
organizational review and fortified our framework in order toadvance sustainability through consideration for environmental,social, and governance (ESG) for the realization of a sustainable
society. Over the past five years, we have undertaken a range ofactivities to drive our sustainability agenda forward. These activities
include (1) identifying materiality (key issues) and establishing goals
and KPIs for each materiality; (2) obtaining external certifications
from organizations such as GRESB, DBJ Green Building, andCASBEE; (3) demonstrating our commitment to sustainability
by endorsing initiatives such as the Principles for Responsible
Investment (PRI), the Principles for Financial Action for the 21stCentury (PFA21), and the Task Force on Climate-related Financial
Disclosures (TCFD) recommendations; (4) pursuing sustainability
finance; (5) engaging in community activities rooted in the Fukuoka
region; and (6) implementing initiatives directed toward our
employees and tenant staff.
I was involved in the property management of retail facilities
until I assumed my position at Fukuoka Realty in June 2023. In
Kitakyushuʼs retail facilities, we actively participated in sustainability
initiatives, including waste sorting into 14 categories for recycling.
In Fukuoka and Oita, we implemented on-site measures, such as
reusing kitchen wastewater and rainwater, along with the adoptionof LED lighting to enhance our energy efﬁciency efforts. In addition,
we organized activities such as clothing collection, food drives,
and the sale of non-standard vegetables at on-site
events in retail facilities. I look forward to continuing oursustainability efforts from an on-site perspective.

25

Materiality

Fukuoka REIT Corporation and Fukuoka Realty Co., Ltd., consider it essential to take into account environmental, social,

Materiality

and governance (ESG) factors in addition to pursuing proﬁtability to achieve the best interests of unitholders over the
medium to long term. Accordingly, we strive to respond to various ESG-related issues within our real estate investment andMateriality

management processes.

Mapping of Issues

Environment

High

Environment

Fukuoka Realty, the Asset Management Company, has identified materiality (important issues to address) in its sustainability initiatives basedon the demands and expectations of stakeholders and the expected impact on and importance to FRCʼs business.

● Creation of pleasant workplaces (Asset Management

Company)● Creation of pleasant workplaces (tenants)

Governance● Information disclosure and dialogue with stakeholders

High● Compliance/Risk management

Societyrevitalization of Fukuoka and Kyushu● Co-creation with the local community

・Carry out performance and function evaluation of properties
on a regular basis and ameliorate any deterioration in
performance
・Maintain and improve competitiveness by acquiring
green building certifications and through visual
representation of building performanceSee p.31

・(by 2030) 85% Green Building
Certification rate or higher

Creation of pleasant
workplaces (AssetManagement
Company)・Improve quality of operations by enhancing and expanding
employee education systems and promoting acquisition ofqualifications
・Continue to improve office environments and work on
providing pleasant working environments
・Give consideration to a work-life balance and boost employee
satisfaction

・Training per employee (numberof times)
・Improve office environment(number of cases)

Creation of pleasant
workplaces (tenants)

・Promote improvement of employee
satisfaction and work toward increasing job
satisfaction of tenant employees

・Conduct regular tenantsatisfaction surveys (allproperties)

Contributions
toward boosting
the attractivenessand revitalization of
Fukuoka and Kyushu

・Enhance dissemination of information regarding strengths andcharms of Fukuoka and Kyushu
・Support research and studies on the local economy and industries
and promote attractive urban development in
See p.37
collaboration with local business circles

・Join and participate in local
economic organizations
・Host local community events(number of times)

Co-creation with thelocal community

・Deepen dialogue and collaboration with local communities
through participation in community activities and various
initiatives using properties under our management to grow anddevelop together with the local community

・Join and participate in area
management organizations
・Continued participation in
activities that contribute to thecommunity (number of times)

Formulated
sustainability policy

September 2017

June 2018
Acquired DBJ Green
Building Certification for
2 properties (9 in total)

August 2018

September 2018

Certified as a “Fukuoka
ʻWork-Style ReformʼPromotion Company”

Announced results of GRESBReal Estate evaluations(participation for first time)

July 2018
Acquired BELS
Certification for 4
properties (reissued)

September 2018
Became a signatoryof the Principles
for Responsible
Investment (PRI)

September 2019

August 2022

February 2023

Identified
materiality

Created “Climate
Change and Resilience
Policy”

Registered with Fukuoka
Prefectureʼs SDGs
certification system

September 2018
Became a signatoryof the Principles for
Financial Action for the
21st Century (PFA21)

April 2022
Set key performanceindicators (KPIs) for
materiality

July 2022
Registered with
Fukuoka Cityʼs WellBeing & SDGs
certification system(master level)

September 2022
Endorsed the TCFD (Task
Force on Climate-related
Financial Disclosures) andparticipated in the TCFD
Consortium

Process for Identifying Materiality
STEP 1Governance

January 2018

Began initiatives
regarding participationin GRESB 2018

Information disclosureand dialogue withstakeholders

・Disclose financial and non-financial information to stakeholders
in an appropriate and timely manner
・Build relationships of trust through proactive dialogue
with stakeholders and reflect stakeholder feedback in the
management strategy

・Dialogue with investors (numberof times)
・Employee ESG training (numberof times)
See p.38

Compliance/Riskmanagement

・Ensure thorough compliance including compliance with laws
and ordinances and elimination of conflicts of interest withinterested parties, and develop and operate an appropriate
internal risk management system to maintain and improve
corporate value・Compliance training(number of times)

See p.36

See p.39

Data Section

Maintenance andenhancement ofenvironmental
and construction
performance

Sustainability

Historical Background to Identification of Materiality

26

・(by 2030) 35% reduction in CO2emissions (compared with 2019,
basic unit), 75% waste recyclingrate● Contributions toward boosting the attractiveness andWe have identified eight material issues through the process below from environmental, social, and governance perspectives that are of highimportance to society and stakeholders and to business continuity.

Established Policies
That Include Those
Regarding CustomerOriented BusinessConduct

・Coordinate with Property Management and Building
Management on promotion of management and reductionof energy consumption, greenhouse gas emissions, water
consumption, and waste output
See p.24
See p.28

construction performance

Society

Importance to business continuity

FY2017–

Reduction ofenvironmental load

● Maintenance and enhancement of environmental andImportant
items

Related SDGs

Growth Strategy

Importance to society and stakeholders● Reduction of environmental load

KPIs and targets

Who We Are

Identifying Materiality

Policies and targets

Process for Revising Materiality
STEP 2

Identify social issues

Narrow and prioritize issues

Based on the needs of society andthe expectations of stakeholders
within and outside of the Company,
prepare a list of social issues taking into
account conditions at other companies
in the same industry, items used atassessment agencies, ESG disclosure
standards, and SDGs.

Narrow and prioritize identified
issues based on their importanceto stakeholders and the importanceto and degree of impact on FRCʼsbusiness based on potential risks andopportunities. Prepare draft proposals
regarding materiality.

STEP 3

Deliberate at the management level, confirm
appropriateness
Ensure that the Sustainability Promotion Committee, establishedby the Asset Management Company, deliberates on all draft
proposals regarding materiality. Materiality is identified afterinvestigating appropriateness based on the opinions and adviceof experts acting on behalf of stakeholders. Reports are ultimately
delivered to the Board of Directors of the Asset Management
Company and the Board of Directors of FRC.

STEP 1

STEP 2

STEP 3

Identify items to be revised

Exchange opinions with third parties

Identify items in materiality to be revised
based on an examination of changes
in the social environment and anassessment of the current situation.

Create proposed revisions to materiality
based on dialogue with stakeholders andan assessment from FRCʼs perspective,
and request third parties to provide theiropinions on the proposed revisions.

Deliberate at the management level, seek resolution
by the Board of Directors
Ensure that the Sustainability Promotion Committee,
established by the Asset Management Company, deliberates
on all proposed revisions in consideration of the opinions
provided by the third parties before any changes are maderegarding materiality. Ultimately, reports are to be delivered
to the directors of the Asset Management Company and theBoard of Directors of FRC.

Fukuoka REIT Corporation 2023

27

Environmental Response
IC

Related Materiality

Investment Corporation (FRC)

AMC Asset Management Company

・Reduction of environmental load

Environmental Performance Data

Office buildings

IC

FY2019FY2020

FY2021

FY2022CO2 emissions intensity (t-CO2/m2)

0.05170.04660.04580.0439

Scope 1 + 2 (t-CO2)

11,059

9,986

9,260

8,815

Scope 1

t-CO2

60

64

53

53

Scope 2t-CO210,999

9,923

9,207

8,762

■ Power Consumption(MkWh)

100,000(Data coverage)
72.6％

70.3％

* The properties covered by Scope 1 + 2 include 21 buildings, comprising five retail facilities, nine officebuildings, two logistics facilities, and five residential properties.
* The emissions intensity for the entire Scope 1 + 2 portfolio is calculated by dividing the total emissions of
the covered properties by their total floor area (common areas).

(MkWh/m )
2

70.3%

70.7%

0.180

80,000City water potable (m3)

■ Water Consumption*1

Well water/Rainwater (m3)Basic unit (m3/m2)

Reclaimed water*2 (m3)

(Data coverage)

(m )
3

72.6％

800,000

88,611

70.3％

70.3%

(m /m )
3

70.7%

2

1.600

667,074
79,6240.167

82,47982,1900.170

565,663

600,000

1.258

0.155

40,000

0.153

0.150

400,000

0.872

1.054
0.953

0.800

200,000

0.400

0.149

0

FY2019FY2020

FY2021

FY2022(Mar. 2019–Feb. 2020)(Mar. 2020–Feb. 2021)(Mar. 2021–Feb. 2022)(Mar. 2022–Feb. 2023)

At LOGICITY Minato Kashii and LOGICITY Hisayama, we have installed

reduce energy consumption.

solar panels on the rooftops to generate renewable energy and<Office buildings already converted to LED>

contribute to the formation of a recycling-based society.

・Gofukumachi Business Center(e.g., interior shared spaces, someexternal areas, exterior wall lighting)

0

FY2019FY2020

FY2021

FY2022(Mar. 2019–Feb. 2020)(Mar. 2020–Feb. 2021)(Mar. 2021–Feb. 2022)(Mar. 2022–Feb. 2023)

・Taihaku Street Business Center (e.g.,
entrance, interior shared spaces)
・Tenjin North Front Building(common spaces)

Green Finance

Example of shifting to LED lighting at Sanix
Hakata Building

LOGICITY Hisayama

With the goal of further promoting ESG activities and expandingof borrowings required in the acquisition of Eligible Green Assets, or thefinancing options through an enhanced investor base, FRC establishedredemption of Investment Corporation bonds issued and outstanding.

the Green Finance Framework in 2019 in line with the Green Bond

Eligible Green Assets are specified assets held by FRC that havePrinciples 2018, the Green Bond Guidelines 2017 from the Ministry

received or are scheduled to receive one of the following certificationsof the Environment, and the Green Loan Principles to ensurefrom third-party organizations at the time of procurement or the

implementation of green financing, including sustainability linked loans

reporting date.

and green loans . The funds procured through green finance will be

Note: Total value for 15 properties, including five retail facilities, nine office buildings, and one logistics facility. Basic unit is calculated by adjusting the total floor area (m²) by the occupancy rate. Data coverage is the area ratio
of properties subject to data aggregation as compared to all properties in the portfolio (excluding land) as is calculated at the end of the period. The figure for Canal City Hakata, Canal City Hakata・B, and Canal City
Business Center Building reflects total power and water consumption for the entire Canal City Hakata complex, including power and water consumption for certain theater and hotel areas not owned by the Investment
Corporation. The figure for Park Place Oita covers only the main building section and excludes the section for independently run stores. The figure for Taihaku Street Business Center covers only the office tower andexcludes the residential tower. Water consumption excludes some well water volumes for which data cannot be obtained.
*1. Includes treated water volume.
*2. Includes externally purchased greywater.

allocated toward the acquisition of Eligible Green Assets, the repayment(1) DBJ Green Building certification of 3, 4, or 5 stars(2) CASBEE certification of S, A, or B+ rank
(3) BELS evaluation of 3, 4, or 5 stars(3-star or B+ rank)

Eligible Green Assets

140.1 billion yen
67.5%

Retail facilities(5-star oro S rank)

Eligible Green
Assets140.1 billion yen
13 properties

Total assets LTV
42.4%

Maximum green financeprocurement amountAmount of Green Eligible Liabilities
59.4 billion yen(4-star or A rank)

As of August 31, 2023

Natural Environment Conservation and Creation

Canal Water Filtration System (rainwater reuse system)

At Canal City Hakata and Park

Canal City Hakataʼs symbolic

Place Oita, we are making efforts

canal has both a recreational

to coexist with various naturalfunction and is a source of water・The number of properties classified as Eligible Green Assets, and the number and type of environmental certifications obtained.

environments by providing green

to fight fires in the case of anspace in communal areas, installing

emergency. At all times, this canal■ Sustainable Finance (Actual)aquatic spaces, and creatingholds roughly 1,200 tons of water,

shaded spaces. We are creating

and rainwater is used to conserve

habitats for wild fauna and flora

resources.

places where employees and visitors can relax and interact with nature.
Retail facilities

Greywater Plant (kitchen drainage reuse system)

After procuring green finance, FRC will announce the total amount of Eligible Green Assets, the amount of related liabilities, and the amount of funds
from green finance as of the end of each fiscal period (February and August each year). FRC will also announce the following indicators related to
Eligible Green Assets as of the end of February each year.

LenderAmount(Millions of yen)Interest rate

Procurement dateLong-term loan (green loan)

Mizuho Bank, The Bank of Saga,
Higo Bank

2,200

0.52100%*1

July 31, 201910 years Green loan assessment: Green 1*2

Long-term loan (donation loan)

Juhachi-Shinwa Bank

1,000

0.59000%

March 31, 2021

10 years for research on the development of a new

1,600

0.72625%

June 30, 2022

7 years

Green loan assessment: Green 1*2

4,900

0.91875%*3

August 31, 2022

10 years

Third-party opinion onsustainability linked loan*4

Type

Sumitomo Mitsui Banking
Corporation
Development Bank of Japan,
The Nishi-Nippon City Bank,
The Bank of Fukuoka

Long-term loan (green loan)

Retail facilities

Long-term loan(sustainability linked loan)

Term

Summary

A portion of the interest is donated as funds
coronavirus vaccine at Nagasaki University.

Introducing Renewable Energy Equipment

Long-term loan (green loan)

NEW

Sumitomo Mitsui Trust Bank

900

0.50100%

July 31, 2023

5 years

Green loan assessment: Green 1*2

At Konoha Mall Hashimoto, weLong-term loan (green loan)

NEW

Sumitomo Mitsui Trust Bank600

0.82900%

July 31, 2023

8 years

Green loan assessment: Green 1*2

Mall Hashimoto, kitchen wastewater

have installed solar panels on theLong-term loan (green loan)

NEW

Development Bank of Japan

2,000

0.83750%

August 31, 2023

6 years

Green loan assessment: Green 1*2

discharged by restaurants is

rooftops to generate renewable

Long-term loan (green loan)

NEW

Development Bank of Japan

2,000

0.90689%

August 31, 2023

6.5 years Green loan assessment: Green 1*2

collected and processed asenergy and contribute to thereclaimed water. It is then used asformation of a recycling-based

tap water in on-site restrooms.

society.

At Canal City Hakata and Konoha

Data Sectionthat contribute to the preservation of biodiversity, as well as providing

Sustainability

Total properties
owned
207.5 billion yen
35 propertiesIC

Retail facilities

Solar panelsIC

For fiscal 2022, power consumption was reduced by 8.3% and water consumption was reduced by 16.2% compared with fiscal 2019.

Environmental Initiatives

28

We are focusing on shifting to LED-based lighting in each property to

Growth Strategy

0.160

1.200

507,865464,518

60,000Introducing Renewable Energy Equipment

・Sanix Hakata Building(interior recessed lighting)

Basic unit (MkWh/m2)

Power consumption (MkWh)

For the ﬁscal period ended February 2023, CO2 emissions were reducedby 15.1% compared with the ﬁscal period ended February 2019.

Energy-Saving Measures by Switching to LED lighting

Who We Are■ GHG Emissions (Scope 1 + 2)

Others (logistics facilities)*1. FRC has concluded a swap agreement to establish a fixed interest rate on debt. The indicated interest rate reflects the effects of the swap agreement.
*2. FRC has received the highest “Green 1” rating from Japan Credit Rating Agency for our adherence to the Green Loan Principles.
*3. In case the CO2 reduction target is achieved, the preferential interest rate from the initial borrowing will be applied from August 2031 until the repayment date.
*4. FRC has obtained a third-party opinion from Japan Credit Rating Agency.
Glossary

Sustainability linked loan
A loan that encourages the borrower to achieve ambitious Sustainability Performance
Targets (SPTs).
Green loan
A loan in which the use of funds is limited to environmentally friendly businesses.

Green bonds
Bonds issued by companies and local governments in order to raise the funds forgreen projects in Japan and overseas.
Fukuoka REIT Corporation 2023

29

Environmental Response
IC

Related Materiality

Investment Corporation (FRC)

AMC Asset Management Company

・Maintenance and enhancement of environmental and construction performance

Initiatives for Facility and Building Management

Initiatives We Support and External Certifications

IC

Individual Facility Initiatives

FRC makes continuous improvements through feedback on the results it receives from acquiring external certifications.

GHP air-conditioning system update NEW

before■ Endorsement of the Recommendations of the Task Forceafter

on Climate-related Financial Disclosures (TCFD)

In Park Place Oita, the update to an energy-efﬁcient GHP airconditioning system contributed to the reduction of running costs andCO2 emissions.

Office buildings

Disaster prevention amplifier updateNEW

beforeafter

prevention amplifier, specifically updating the automatic fire alarm

東京都

receiver (emergency broadcast panel). This enhancement enables early

愛知県

11,800大阪府

11,800detection and evacuation guidance through audible alerts in the event of

福岡県

0Initiatives for Disaster Risk

5,000

15,00020,00025,00030,000 （円）■ Capacity of Stormwater Storage Facilities of Fukuoka City
FY1999FY2023No stormwater storage facilities

128,300 m3 (estimate)

Stormwater management capacity increased from 59.1 mm/h

measures have greatly improved flood safety within the city limits.

installed equipment as part of our countermeasures to river flooding asa result of typhoons and locally heavy rains, which appear likely to comemore frequently and increase in severity due to global warming.

to 79.5 mm/h (city center）

4,000

Instances of inundation
have steadily declined

3,000
1,721

2,000

1,122

June 29,
1999

July 19,
2003

July 24,2009

August 30,
2013

Maximum hourly
79.5
precipitation (mm/h）

104

116

72.5

■ Emergency Drills

According to the probabilistic earthquake prediction map from the Office

We have conducted

30 years is lower in Fukuoka Prefecture than in the Kanto, Chubu, and Kansai
areas. FRC establishes the insurance value of each property based on its
replacement value, earthquake PML value, and other factors, and maintainsof a sustainable
society.

■ Ratio of Properties Certified as Green Buildings

Between FY2000 and FY2023

Stormwaterdrainage capacity
has increased
significantly
Since the launch of
the project in FY2000

on the Evaluation Guidelines for the Building Energy-Efficiency Labeling

estate properties that feature excellent environmental and social

System for Non-Residential Buildings (2013). FRC has acquiredconsiderations. FRC has acquired certification for 13 of its properties

certification for five of its properties owned.

owned that exhibit environmental and social awareness (including six
properties that were recertified in March 2022).

Properties with
Green Building
Certification

80.3%

Canal City Hakata since 2017,with all tenants participating(not held in 2020 or 2021 due

Canal City Hakata（2021）★★★★★ Canal City Hakata・B（2021）★★★★

Park Place Oita（2021）
Konoha Mall Hashimoto（2020）★★★

Hakata FD Business Center (2023)
Canal City Business Center Building（2021）
Gofukumachi Business Center（2021）
Higashi Hie Business Center（2021）
LOGICITY Minato Kashii (2020)
LOGICITY Hisayama (2020)
Higashi Hie Business Center Ⅱ (2020)★

SunLive City Kokura (2019)
Marinoa City Fukuoka（Marina Side Building）（2019）

to COVID-19). The drills wereconducted in November 2023.

to estimate earthquake damage to properties based on various scenarios.
Earthquake PML
Refers to the probable maximum loss as a percentage of the expected maximum damage (Probable Maximum Loss) caused by an earthquake. The higher the PML value,
the higher the buildingʼs seismic risk.
[Calculation method] PML = Expected maximum damage / Replacement cost

Higashi Hie Business Center(acquired in March 2016)(based on total floor space)comprehensive disaster drills at

earthquake insurance for all its properties（buildings）. In addition, FRC

30

energy conservation performance of non-residential buildings, based

system established by the Development Bank of Japan for real

Instances ofinundation havesteadily declined

continues to conduct annual property surveys through external organizations

Glossary

In addition, the Building Energy-Efficiency Labeling System (BELS)
is a system in which third parties evaluate, indicate, and certify the

Data Section

Fukuoka Prefecture is an area in which there are relatively few earthquakes.

probability of an earthquake with an intensity of six or greater over the next

the achievement

Source: Prepared by Fukuoka Realty based on data from the “Storm Water Management Action Plan
2026” pamphlet about the Fukuoka City StormWater Emergency Control Plan.

Other Disaster Prevention Measures

Bureau, Ministry of Education, Culture, Sports, Science and Technology, theLevel, in the GRESB Public Disclosure Assessment.

philosophies of the Principles for Responsible Investment (PRI) and

The DBJ Green Building Certification is a third-party certification
3,173

Earthquake Risk Countermeasuresand Disaster-Reduction Research Division, Research and Development

4 Stars and Green Star. In addition, we obtained the highest level, A

portfolio certified as green buildings was 80.3%.

(Buildings)

3of the Headquarters for Earthquake Research Promotion, Earthquake

Real Estate Assessment conducted in 2023, FRC achieved a rating of

support the TCFD.

As of September 1, 2023, the ratio of properties within the entire■ Inundation Instances of Fukuoka City

1,000

Canal City Business Center Building

overseeing this assessment is also named GRESB. In the GRESB

a group of companies in Japan that

Sustainability

stops throughout the Canal City Hakata premises and either repaired or

estate companies and funds. The organization conducting andmanagement, the company is contributing toflooding was particularly harsh. Ongoing efforts to implement antiflooding

We reviewed the specifications and installation locations of existing water

environmental, social, and governance (ESG) considerations in real

institutions should respond.

became a signatory to these initiatives. Through ESG-conscious asset

contributed to the formulation of the Storm Water Management Action Plan

■ Replacing and Installing New Water Stops (July 2020)

GRESB serves as the annual benchmark assessment for measuring

Board (FSB) to examine climate-related disclosures and how financial

the Principles for Financial Action for the 21st Century (PFA21) andCountermeasures to Flooding Risks

and the upgrading of rainwater drainage facilities in the areas where thegroups that endorse the Principles for Responsible Investment (PRI).

Disclosures (TCFD), which was established by the Financial Stability

In September 2018, Fukuoka Realty Co., Ltd., endorsed the basic
10,000IC

Severe damage from flooding in Fukuoka City on June 29, 1999,

established in 2009, primarily by leading European pension fundrecommendations of the Task Force on Climate-related Financial■ Other Initiatives We Support

7,400

The Global Real Estate Sustainability Benchmark (GRESB) was

Growth Strategy

a fire, playing a crucial role in ensuring the safety and security of tenants.

27,500■ Participation in GRESB Assessment 2023

In September 2022, we announced our endorsement of the

At the same time, we became a member of the TCFD Consortium,

At the Gofukumachi Business Center, we have upgraded the disaster

Canal City Hakata North Bldg.

AMC

Who We Are

Retail facilities

IC

Higashi Hie Business Center Ⅱ(acquired in September 2015)

LOGICITY Minato Kashii(acquired in May 2015)

LOGICITY Hisayama(acquired in March 2016)

Tissage Hotel Naha(acquired in November 2022)

Fukuoka REIT Corporation 2023

31

Environmental Response
IC

Related Materiality

Investment Corporation (FRC)

AMC Asset Management Company

・Reduction of environmental load

FRC’s Recognition of Climate Change

TCFD Endorsement(and Participation in the TCFD Consortium)
The Asset Management Company expressed its support for the Task

proven progression of climate change, as outlined in the Paris

Force on Climate-related Financial Disclosures (TCFD) in September

Agreement (2015), the IPCC Special Report (2018), and the IPCC

2022 to promote disclosure of information related to climate-related

Sixth Assessment Report (Working Group I, 2021). We recognize

issues. Alongside this endorsement, we are also a member of theclimate change as a significant (material) challenge that brings about

TCFD Consortium. Within this consortium, which includes numerous

dramatic changes to the natural environment and social structures,companies and organizations endorsing TCFD in Japan, discussions

exerting a profound impact on the management and overall businesstake place on how information on climate-related issues should beof FRC. Based on this recognition, the Asset Management Company

disclosed and used.

established the Policy on Climate Change and Resilience in August

In the most recent scenario analysis, the focus is on FRCʼs real estate leasing business.
The analysis timeline is set for 2030 (medium term) and 2050 (long term).

External Scenario Referenced
In accordance with the TCFD recommendations, it is advisable to

Risk type

Source1.5℃ Scenario

4.0℃ Scenario

articulate the resilience of oneʼs own strategy, taking into account multiple

Transition
riskInternational Energy Agency (IEA)
World Energy Outlook 2020

IEA NZE2050

IEA STEPS

PhysicalriskIntergovernmental Panel on
Climate Change (IPCC)
Fifth Assessment Report

IPCC RCP2.6

IPCC RCP8.5

scenarios, including those aligning with the goal of limiting global warming
to below 2°
C. The scenarios referenced by the Asset Management
Company in conducting the scenario analysis as shown on the right.

Who We Are

In the Asset Management Company, we acknowledge the scientifically

Scope of Analysis

2022. This policy outlines our approach to responding to risks andEnvisioned Worldview in Each Scenario

opportunities associated with climate change, as well as initiatives
to ensure the resilience (strength and buoyancy) of operations andBased on each scenario, the Asset Management Company envisions the following worldview.

strategies relative to climate-related issues.

■ 1.5℃ Scenario■ System for Promoting Sustainability

risks and opportunities, providing updates on initiatives related to

The Asset Management Company has established a Sustainability

adaptation and mitigation, and reporting on climate change responses,

Policy and related internal regulations as specific practical guidelines toconsistently and systematically promote sustainability initiatives, as wellas the Sustainability Promotion Committee. This Committee meets atleast twice a year in principle to examine goals and measures related

including the establishment of indicators and goals. The Sustainability
Promotion Committee deliberates on each agenda item with theparticipants, and final decisions rest with President and CEO.

introduction of stringent regulations,tax measures, and other initiatives tocombat climate change, aiming to
As part of a worldwide effort toPresident and CEO serves as the chairperson of the Sustainability

within the socioeconomic landscape.

managers of each division. President and CEO makes final decisions

Promotion Committee and, as the ultimate decision-maker forThis entails establishing frameworks forregarding sustainability, while the general manager of the Planningsustainability (also the highest authority for climate-related issues),

reducing greenhouse gas emissions

Department holds the role of Sustainability Officer.

makes final decisions regarding the implementation of related

and enhancing emission regulations.

anticipated shift toward decarbonization

This shift has the potential to

we have established the Sustainability Promotion Office. Comprising

President and CEO also periodically reports on specific targets,significantly impact the operations ofsustainability representatives from diverse departments, this officeproposals, and progress on sustainability initiatives determined by theboth the Asset Management Company

operates in accordance with decisions made by the ultimate authority

Sustainability Promotion Committee to the Board of Directors of bothand FRC.

on sustainability. This structure enables the effective implementation of

the Investment Corporation and FRC.

The Asset Management Company positions climate-related issues■ Oversight by the Board of Directors

as one of its sustainability challenges and has established the following

President and CEO serves as the chair of the Board of Directors for thegovernance structure to address climate-related risks and opportunities

Asset Management Company.

President and CEO holds the highest authority for climate-related

The Board of Directors is responsible for making the final decisionon the formulation and revision of the Sustainability Policy, whichissues, serving as the ultimate decision-maker for sustainability. The

represents the specific operational guidelines for sustainability for the

executive overseeing climate-related matters is the general manager

Asset Management Company.

of the Planning Department, responsible for the supervision ofsustainability promotion.
This executive consistently reports to President and CEO within the
Sustainability Promotion Committee, covering various aspects such

Furthermore, the Board of Directors monitors and supervises thesustainability initiatives of the Asset Management Company by receiving
reports from the Sustainability Promotion Committee and offering
guidance as necessary.

as identifying and assessing the impacts of climate change, managing

Government regulations■ 4.0℃ Scenario
The 4.0°
C Scenario is based on thepremise that stringent regulations andtax measures necessary to achieve

Enhanced regulations oncarbon emissions andenergy consumption

Financial institutions

FRC
Increased measures forCO2 emission reduction

Evaluation of environmental
regulation compliance andenvironmental certificationin lending assessments

Tenants

Investors

Growing emphasis on
selecting properties based on
environmental performance

Rising importance of evaluating
environmental regulation
compliance and environmental
certification in investment decisions

Technological innovation

Climate and weather

Increased costs associated withequipment replacement anddisaster recovery

Rise in wind and water-related disasters
Increase in acute weather-related
disasters

a decarbonized society are not
implemented, resulting in a continued
increase in greenhouse gas (GHG)
emissions.
As climate change advances, we
anticipate an increase in the frequency
and intensification of meteorological

Government regulations

FRC

Financial institutions

Enhanced regulations on
disaster prevention andmitigation

Increased operationalcosts due to risingprocurement prices

Expansion of disclosure
requirements related to climate
risks in lending assessments

and climate-related disasters, including
severe typhoons, heavy rainfall, more

Strategy
The Asset Management Company has established a process to

Rise in wind and water-related disasters
Progression of chronic climate changes
to a certain extent

Data Section

associated with FRC.

Advancement and widespread
adoption of renewable energy andenergy-efficient technologies

Sustainability

comprises President and CEO, Executive Officers, and the generalactivities associated with sustainability promotion.

Climate and weather

address climate change, there is an■ Role of Management

measures.

Technological innovationachieve a decarbonized society.

to climate change issues and determine the progress of initiatives. It

In addition, to streamline the execution of sustainability initiatives,

32

The 1.5°
C Scenario is premised on the

Growth Strategy

Governance

The Asset Management Company, in conjunction with its

frequent heatwaves and droughts, andTenants

the ongoing rise in global sea levels.

Growing emphasis on
selecting properties with highsafety standards against
meteorological disasters

This has the potential to significantly

identify, assess, and manage the impacts of climate-related risks andcommitment to the TCFD in September 2022, released the results ofimpact the operations of both the Asset

opportunities on its business activities, strategies, and financial plans.

its first scenario analysis. It subsequently conducted a second scenario

Management Company and FRC.

Ongoing analyses are being conducted.

analysis, reassessing risks and opportunities.

Investors
Expansion of disclosure
requirements related toclimate risks in investment
assessments

Fukuoka REIT Corporation 2023

33

Environmental Response
IC

Related Materiality

Investment Corporation (FRC)

AMC Asset Management Company

・Reduction of environmental load

Identification of Risks and Opportunities
The Asset Management Company has identiﬁed risks and opportunities based on scenarios and assessed their impact on business as outlined
below. For the ﬁnancial impact, we conducted both qualitative and quantitative assessments, referring to the aforementioned scenarios and literatureprovided by industry associations.

■ Risks and Opportunities

Note: Items for which evaluation or calculation is difficult are indicated with “-”.
ImportanceTransition risk

Risk and opportunity factors and financial impacts

Response to risks and opportunities

Low

MediumAdvancement of CO 2 reduction goals/Energy-efficientrenovations/Introduction of renewable energy/Efficientenergy management

Technology

Expenses increase for energy-saving and energy-creating measures for existing
properties, including energy conservation, energy storage, ZEB/ZEH conversion,and solar power generation.

High

High

Establishment of long-term renovation plansconsidering the useful life span/Utilization of subsidies/
Improvement of portfolio environmental performancethrough acquisition of ZEB/ZEH properties

MarketMarket preferences lead to an increase in vacancy rates and a decline in rents forproperties not aligned with decarbonization.

Low

Low

Delayed adoption of decarbonization measures results in a decline in investment
unit prices and missed opportunities for external growth.

----

Delayed implementation of decarbonization measures leads to an increase in loaninterest rates and a shortening of borrowing periods.

Low

Low

Increased frequency of disasters results in a rise in damage costs and disasterrecovery expenses.

High

High

Increased frequency of disasters leads to a rise in disaster preparedness
expenses.

Low

MediumThe rise in air-conditioning usage due to increasing temperatures results in higher
utility costs.

Low

Low

Expenses for addressing the impacts of rising sea levels increase.

Low

Low

Resource efficiency

Implementation of energy-saving measures leads to a reduction in energy
procurement costs.

Low

Low

Energy sources

As the transition to clean energy progresses, the carbon tax burden decreases.

Low

Low

Products andservices

The increased supply of ZEB properties in the market leads to an increased
opportunity for acquiring such properties.

----

Market preferences lead to an increase in vacancy rates and a decline in rents forproperties not aligned with decarbonization.

Low

MediumThe success of decarbonization measures leads to an expansion of lending
partners and opportunities.

Low

Low

The success of decarbonization measures opens up new investor segments.

--

--

Acute

Chronic

MarketResilience

The success of disaster preparedness measures results in a reduction in damage
costs and disaster recovery expenses.

MediumMediumPromotion of environmental certifications/Understandingof tenant needs through satisfaction surveys/Advocacy ofGreen Lease agreements/Promotion of green initiatives/
Appealing to investors who prioritize environmental
issues/Improvement of portfolio environmental
performance through property replacement

The process by which the Asset Management Company manages climate change–related risks is as follows.

Implementation of air-conditioning efficiency improvement
renovations/Efficient energy management■ Process of Identifying and Evaluating Risk

Energy-efficient renovations/Introduction of renewableenergy/Improvement of portfolio environmental
performance through acquisition of ZEB/ZEH properties/
Decrease in the cost of high-efficiency equipment
Promotion of acquisition of environmental certifications/
Understanding tenant needs through satisfaction
surveys and other measures
Utilization of green financeAppealing to investors who prioritize environmental issues
Risk monitoring of property locations/Implementationof disaster preparedness measures (e.g., installationof water stoppers, waterproofing of central monitoring,
reinforcement of power receiving and transforming
facilities)/Risk mitigation through insurance coverage

Transition risks and opportunities

Carbon tax burden increases.

Physical risks and opportunities

Details of financial impact

34

Increased costs for energyefficient retrofitting and energygenerating on-site renovations
for existing properties.
Energy procurement costs
decrease with renovations.
Vacancy rates increase andrents decline for properties notaligned with decarbonization.
Damage costs and disasterrecovery expenses increase due
to water damage.
Expenses for water damage
prevention measures increase.
Utility costs increase due to therise in air-conditioning usage.
Expenses for addressing theimpacts of rising sea levels
increase.

Note: Items not yet calculated are represented as “-”.

1.5℃

4.0℃

Risk Management

The risks and opportunities related to climate change are addressed
through a climate-related working group. This group, led by
the executive responsible for climate-related issues, convenes
representatives from various departments believed to be necessary
for the identification and assessment of climate-related risks. The
process involves listing and identifying risk items, qualitatively assessing
business impacts, and evaluating risk significance. The outcomes arethen deliberated and assessed, and subsequently presented to the
Sustainability Promotion Committee for consideration.
The Sustainability Promotion Committee deliberates on climaterelated risks identified by the working group that need to be prioritizedbased on the likelihood of occurrence and impact and draws up
risk management responses in order of priority. The Committee
also deliberates on climate-related opportunities and establishes
prioritization for business strategy.
Furthermore, the Committee reports on the deliberation and review
process to the Board of Directors.

Additional information

Risk

-352

-

Increase in carbon tax burden■ Process of Managing Risks

Countermeasure effects

188-

Reduction through energy-saving and energy-generating (on-site) renovations

Risk

-783

-

The executive with ultimate responsibility for climate-related issues
designates responsible departments or individuals and instructs
the formulation of countermeasures for climate-related risks andOpportunity

Reflected in the effects of carbon tax
countermeasures, energy procurement costs, andopportunities in the real estate leasing business

Increase in CAPEX investment
Rise in maintenance costs for energy-generating facilities

Countermeasure effects
and opportunity

119-

Reduction through energy-saving and energy-generating (on-site) renovations

Risk

-91

-

Decrease in real estate leasing business income if no measures are taken

Opportunity

329-

Increase in real estate leasing business income with the implementation ofenergy-saving and energy-generating (on-site) renovations

Risk

-56

-169

Increased probability of heavy rainfall leading to direct damages from floods
and indirect losses such as business interruptions

Countermeasure effects

13

38

Risk mitigation through insurance for direct and indirect damages from flooding
Effects of reducing risk by implementing flood prevention measures

Risk

-65

-103

Increase in insurance premiums
Rise in CAPEX investment for flood prevention projects

Risk

-3

-14

Utility costs increase due to the rise in air-conditioning usage

Countermeasure effects

2-

Reduction through energy-saving and energy-generating (on-site) renovations

Risk

-

-

At present, no significant impact has been identified regarding the depreciationof asset values or the incurrence of costs for properties in flood-prone areas
due to rising sea levels.

opportunities of high priority in business and financial planning, asdeliberated in the Sustainability Promotion Committee.
The countermeasure plans formulated by the designateddepartments or individuals are reviewed and approved in internal
forums such as the Sustainability Promotion Committee, depending on
their content, before being implemented.
Regular progress reports on the implemented measures are
submitted to the Committee, where the advancement of responses torisks and opportunities is monitored and verified.
■ Integration into Comprehensive Risk Management
In the Asset Management Company, based on the Risk Management
Regulations, each department head is designated as a risk
management officer. A Risk Management Committee has been
established to monitor the risk management status overseen by theseofficers. The Committee convenes at least once every three months inprinciple, focusing on identifying, understanding, and managing various
potential risks.
The executive with ultimate responsibility for climate-related issues
instructs the inclusion of significant climate-related risks in business andfinancial planning within the existing company-wide risk management
program through the executive in charge of climate-related issues. This
directive aims to integrate the process of identifying, assessing, andmanaging risks within the Risk Management Committee.

Data Section

Scenario

We are currently mitigating physical risk through insurance coverage.
We will also conduct ongoing risk monitoring, including the review ofhazard maps, and implement necessary measures as required. By
conducting BCP exercises and addressing various operational aspects,
our goal is to effectively mitigate risks.

Risk monitoring of property locations/Implementationof disaster preparedness measures (e.g., installationof water stoppers, waterproofing of central monitoring,
reinforcement of power receiving and transforming
facilities)/Conducting BCP training/Insurance coveragefor damages/Conducting hazard risk assessments atthe time of property acquisition

Qualitative Analysis Results of Climate-Related Risks and Their Financial Impact■ Financial Impact (Millions of yen)

We aim to achieve the current CO2 reduction targets associated withtransition risk. We will pursue energy-efﬁcient upgrades, including LED
conversions, and enhance energy efﬁciency during facility updates.
In addition, we will explore initiatives such as the integration of solar
power generation and consider transitioning ZEB and ZEH.
Furthermore, we will look into the greening of externally sourcedenergy.

Sustainability

The introduction of carbon pricing results in an increased carbon tax burden.

Concrete Initiatives in Response to Risks and Opportunities

Growth Strategy

Physical risk

2050

Policy and legal

Reputation

Opportunities

2030

climate-related scenarios and literature. The unit is primarily in theform of impact amounts (millions of yen) per year on a cash basis, andthe time frame assumes the year 2050. Note that the accuracy of thecalculations cannot be guaranteed at present. In addition, the assumed
countermeasures are based on simulation and are not decisions orplans that have been executed.

Who We Are

Qualitative Analysis Results of Climate-Related Risks and Their Financial Impact

This simulation reﬂects only the aspects deemed calculable at present
and does not assess all climate-related risks associated with FRC.
Moving forward, we will strive to evolve our analysis in response todevelopments in global and Japanese climate-related risks.
The simulation was conducted by considering FRCʼs existing
financial information, taking into account information provided by

Metrics and Targets
The Asset Management Company has established key performance indicators (KPIs) and goals to manage and monitor risks and opportunities.
These metrics, targets, and results are outlined below.
■ Reduction of Environmental Load

・35% reduction in CO2 emissions
by 2030 (compared with 2019, basic unit)■ Maintenance and Enhancement of Environmental and Construction PerformanceSee p.28

・85% Green Building Certification rate or higher by 2030

See p.31

Reference: https://www.fukuoka-reit.jp/en/about/sustainability.html

Fukuoka REIT Corporation 2023

35

Social Response
Related Materiality

IC

Related Materiality

・Creation of pleasant workplaces

Investment Corporation (FRC)

AMC Asset Management Company

・Contribute to increased attractiveness and vitalization of Fukuoka and Kyushu
・Involvement in local community

Initiatives for Employees and TenantsInitiatives for Local Communities
Initiatives for Local Communities

Initiatives for Employees AMC

8 years and 3 months

・Child-rearing support（maternity
leave, childcare leave system）
・Nursing care leave
・Leave for voluntary work

Full-time personnel

Training for employees

47 (Male: 21 Female: 26)

・Regular lectures by Kyushu
Economic Research Center・Compliance training

The average number of years of continuous serviceof permanent employees

Gender ratio Male: 44.7％ Female: 55.3％

Employees seconded from sponsors:
Employees seconded to a sponsor:

Participation in Clean-Up Days

At Canal City Hakata, employees of the Asset Management
Company participate in events that involve sprinkling water onsidewalks to cool them down and promote well-being as part ofefforts to enhance the environment.

Asset Management Company executives and employees actively
participate in cleanup activities, of which there had been 313 asof October 19, 2023.

3
9

Safety Town Council

Various Events Held

Participation in Community Events(Hakata Gion Yamakasa)

・Employee welfare (e.g., 401K,
cumulative investment system)
・Encouraging use of paid
holidays
etc.

・ESG training
・Nursing care training
・In-house recreationetc.

Number of credentialed personnel (total number of people)

・Employee satisfaction survey
・Self-assessment system
・Career interview
・Secondment system(dispatching employees tosponsor companies)
・Promotion from contract employee
to permanent employee status

Real estate brokers:
23
ARES Certified Masters:
22
Certified Building Administrators:
5
CMAs:
3
First-class registered architects:
3
Real estate appraisers:
3
MBAs:
2
Attorney:
1
Licensed Representative of Condominium Management Company: 1

・Offering of training programs
tailored to each management level
・System for supporting acquisitionof qualifications (e.g., Real EstateTransaction Agent, Real Estate
Securitization Master)・Support for language learning
etc.

・Initiatives to prevent infectious diseases such as influenza（Implementation of influenza vaccination and full coverage of vaccination costs）
・Mandatory health checkups and comprehensive medical
examinations
・Health counseling by public health nurses
・Application system to restrict excessive overtime work
・Assistance for use of sports clubs
・Installation of personal booths, meeting booths, plants, etc.
・Installation of personal lockers

At Park Place Oita, we established a “Safety Town Council” thatpartners with related institutions and groups to conduct crimeprevention patrols.

At Canal City Hakata, we held events such as Flea Maniacsʼ
SAKE and a recycling process experience using discarded
plastic, known as SDGs WEEK.

Gatherings for Real Estate, Finance, and the Economy AMC

The Kyushu Economic Research Center AMC

We have held gatherings annually since 2008 with the cooperation of
the Japan Real Estate Institute (not held in 2020 due to concerns over
the COVID-19).
Local real estate companies, ﬁnancial institutions, and government
agencies participate in the conference, which contributes to networking
and further stimulation of the local
economy.
It has been designated as acontinuing education course for The
Association for Real Estate Securitization(ARES) masters.

Fukuoka Realty Co., Ltd., and the Kyushu Economic Research Center
have concluded a memorandum of understanding in a bid to promoteincreased cooperation in macroeconomic analysis of the Kyushu
economy. Through this initiative, both signatories to the memorandum
will share information on the current
state of the Fukuoka-Kyushu economy
as well as issues to be faced, thereby
revitalizing economic activity throughout
the region. In addition, study groups
on seasonal topics that are speciﬁc
to Fukuoka and Kyushu are held on aregular basis.

・Installation of ceiling-mounted projectors
Installation of personal lockers

Meeting booths

AMC• Kyushu IR GroupA Comfortable Working Environment

Initiatives for Tenants

AMC

IC

With a focus on the health and comfort of tenant employees, we are
improving the employee lounge environments within retail facilities andrenovating ofﬁce building common areas. Moreover, FRC is engaging
in a variety of initiatives for tenants as a part of efforts to promotesustainability.

・Improvement of employee lounge・Implementation of tenant satisfaction surveys
Certified as a “Fukuoka ʻWorkStyle Reformʼ Promotion
Company”（August 2018）36

Registration with Fukuoka City
Well-Being & SDGs Registration
System（July 2022）

Registration with Fukuoka
Prefecture SDGs Registration
System (February 2023)

・Distribution of sustainability guidebooks
・ESG training

etc.

The Kyushu IR Group, which entered its 13th year in 2023, was established in cooperation with the Japan Investor Relations Association. The Group assists inlearning about the latest IR trends with IR employees of companies located in Fukuoka and Kyushu and fosters the forming of networks between participatingcompanies. Impacted by COVID-19, the study groups have been held in a hybrid style that combined online tools with face-to-face interaction.

Data Section

Other Activities

Sustainability

Health management/Improvement of office environment

After a four-year hiatus, employees participated in the regular
Hakata Gion Yamakasa Oiyama event (Hachiban Yamakasa,
Kamikawabata Shopping Arcade).

Growth Strategy

Career development support

Who We Are

As of August 31, 2023

AMC

Annual Events

Support for flexible work styles

Fukuoka Realty: Numbers of credentialed personnelIC■ Details of the Study Group
Date

Theme and lecturer

1st workshop
July 2023

Guiding Sustainable Evaluation in IR ~ Trends and Disclosure in IR for FY2023 ~Yoshiko Sato, Executive Managing Director, Japan Investor Relations Association

2nd workshop
November 2023

IR Activities at Yaskawa Electric(Expansion of Disclosure Information and Dialogue Opportunities)
Corporate Branding Division, Public Relations & IR Department, Yaskawa Electric Corporation
Daisuke Nakahara, Manager of IR Promotion Section

Note: Information on lecturers is current as of the time of the respective Kyushu IR Group meetings.

Fukuoka REIT Corporation 2023

37

Corporate GovernanceIC

Related Materiality

AMC Asset Management Company

Investment Corporation (FRC)・Information disclosure and dialogue with stakeholders
・Compliance/Risk management

Stakeholder Engagement

IC

Risk Management and Compliance Initiatives

AMC

FRC engages in proactive dialogue with its various stakeholders aimed at sustainable growth and higher corporate value. At
the same time, FRC recognizes that fulﬁlling its required social responsibilities leads to sustainable business activities. Valuing■ The Asset Management Fee Structure

As an asset management

Asset management fees linked to unitholder interests

company for a listed REIT, we
strive to enhance complianceand governance by building
appropriate systems andEnvironment
・Customer satisfaction surveys
at retail facilities
・Implementation of tenantsatisfaction surveys

Property
Clients andTenants

Region andSociety・Organizing community and other events
utilizing the common areas of facilities

conducting appropriate

・Participation in Hakata Town Planning
Promotion Council

unitholdersʼ best interests.

・Offering real estate, finance, and economic
educationthat managing transactions

business operations in pursuit of
In particular, we recognize

・Disclosure of financial and non-financial
information in an appropriate and timely manner

・Collaboration in environmental
and social initiatives

between unitholders andGeneral Manager
Compliance Department
Fukuoka Realty Co., Ltd.

a stakeholder such as asponsor of FRC that might

Daisuke Yokoyama

involve conflicts of interest in
an appropriate manner andpreventing such conflicts of interest are important issues to be

Management Fee 1*

Based on total assets

Management Fee 2

Based on operating revenues

Management Fee 3*

Based on distributable profit

Management Fee 4

Acquisition fee

Management Fee 5

Transfer fee* We reduced the ratio of Management Fee 1 and increased the ratio of Management Fee 3 as of the fiscal
period ended February 2021

■ Decision-Making Process*Proposals by the responsible
department

addressed in governance.
・Steps to share issues throughregular meetings
・Management firm evaluationand feedback

Property
Management
Firms

Unitholders
andInvestors

・Hosting the General Meeting of Unitholders
・Providing results briefings for investors(institutional and individual investors)
・Disclose financial and non-financial informationin an appropriate and timely manner

Employees

to prevent conflicts of interest and make decisions based on theserules. In addition, we verify the appropriateness of the decision-

・Holding 1-on-1 meetings (Japan and overseas)

・ESG training

We have established strict rules for transactions with stakeholders

making process through internal audits and other means.
We also ensure objectivity by receiving advice and evaluations
from outside specialists to avoid taking a self-righteous approach inour decisions.

Deliberations/Resolution by theCompliance Assessment Committee■ Fukuoka REIT Corporation, Directors■ Fukuoka Realty Co., Ltd., Directors

・Employee satisfaction survey
・President interviews, career interviews
・Internal IR・Counseling with public health nurses,

etc.

https://www.fukuoka-realty.jp/english/idea/operation_policy.html#fiduciaryduty

etc.

［Engineering reports］● Law abidance and earthquake

resistance● Check of soil contamination,

toxic substance and use status

Fukuoka REIT Corporation Board of
Executive Officers● Replacement market price,

expenses for long-term
maintenance and repairs, etc.

* The prior consent of the Investment Corporationʼs Board of Directors is obtained in cases falling under theprovisions of Article 201-2 (1) of the Act on Investment Trusts and Investment Corporations.

Oct. 2020–
Sept. 2021

Oct. 2021–
Sept. 2022

Oct. 2022–
Sept. 2023

Compliance training(including e-learning)

6 times

6 times

7 times

Sustainability training

2 times

3 times

4 times

Vice President
Board of Directors(Non-Executive)

Corporate Auditor(Non-Executive)

The term of office for all executive directors and supervisory directors
was set as two years from May 29, 2022.

Supervisory Director

Executive Director

Zenji Koike

Takashi Tanabe

Investment unit holdings: None

Investment unit holdings: 11

Investment unit holdings: None

Yasuo Kawasho

Policies for Customer-Oriented Business Operations

competition situation● Adequate rent levels,

Data Section

etc.

Co., Ltd.

［Market reports］

Glossary

Supervisory Director

Vice President
Board of Directors(Non-Executive)

Vice President
Board of Directors(Non-Executive)

President and CEO

Yukitaka Ohara Hiroshi Shimuta

Zenji Koike

Sustainability

FRC and Fukuoka Realty Co., Ltd., recognize that human resources
are our greatest asset. As part of our efforts to create comfortable
and healthy workplaces, we are endeavoring to improve theefficiency of our operations by enhancing the office environment andour systems. In addition, we provide IR information internally anddisseminate details of results announcements online as part of ourefforts to facilitate internal communication.

Co., Ltd.

Resolution/Decision-making reportby the Board of Directors■ Training Records

FRC works to disclose information in a timely manner to reflect
the importance of dialogue with its unitholders and investors. In
our IR activities, we held an in-person financial results briefing forindividual investors in Fukuoka for the first time since the onset of
the COVID-19 pandemic.

● The Tanizawa Sogo Appraisal● Analysis on trade areas andWhen a transaction such as the purchase and sale of a property
between FRC and a stakeholder, including a sponsor, takes place,
the Asset Management Company must address any possibilityof prioritizing the interests of interested parties over investors.
Fukuoka Realty Co., Ltd., has accordingly established the Basic
Policy on Compliance, as well as compliance regulations and otherinternal rules to prevent any conflict of interest. Based on theserules, we obtain a preliminary assessment from the ComplianceDepartment General Manager and ensure deliberations by theCompliance Assessment Committee, consisting of the ComplianceDepartment General Manager and three outside experts in order toengage in the management of any conflict of interest pertaining toour dealings with stakeholders in an appropriate manner.

・General Meeting of Unitholders (once every two years)
・Results briefings for analysts and institutional investors
・IR for overseas institutional investors
・IR for individual investors
・Enhanced IR tools, information disclosure,

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Deliberations by the Investment
Management Committee

・Employee satisfaction survey

Dialogue with Employees● Japan Real Estate Institute● Daiwa Real Estate Appraisal■ Managing Conflicts of Interest

Dialogue with Unitholders and Investors［Real estate appraisals］

Inspection by the ComplianceDepartment General Manager

・Various employee education programs
・Career interview

Third-party assessment byexternal experts

Growth Strategy

・Announcing results at the Fukuoka Stock
Exchange

AMC

Who We Are

our relationships of trust with stakeholders, we will leverage this concept in our ESG initiatives.

IC

Masanori Kozuma Kazuomi Kamikawa

Engineering reports
Reports outlining the results of a physical survey of a property. These often include surveys on building
conditions, soil contamination, long-term repair and refurbishing costs, and earthquake risk.
Fukuoka REIT Corporation 2023

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