Fukuoka REIT Corporation
Q&A Summary for the 28th Fiscal Period (Period Ended August 2018) Earnings
Briefing Session for Institutional Investors/Analysts
Date: October 17, 2018 (Wed.), 5 pm – 6 pm

Q1: I understand that the number of cases and the total amount of upward rent revision for
office buildings are as explained in the presentation material. As for specific cases in which
upward rent revision was achieved, could you explain at what rates rent was increased? I
would like to know if you have achieved or failed to achieve growth in rent in line with oreven beyond that of the market.

A1: The tenants for whom we work to raise rent are those who pay rent that is less thanmarket rent. As for the tenants for whom we have successfully raised rent, the amount ofincrease is roughly 1,000 yen per month per tsubo, or around 2,000 yen per month pertsubo on the upside. In some cases, it has been arranged that rent will be raised by 500
yen per month per tsubo each year. In successful cases of upward rent revision, the rateof increase is a little less than 10% of the existing rent, or around the latter half of thesingle digit level, as we understand. Meanwhile, the rate of increase in advertising rent inFukuoka over the last 12 months has been approximately 5%. Compared with this, webelieve we have achieved fairly good results in upward rent revision.

Q 2: With regard to Active Retail category properties Canal City Hakata and Canal City
Hakata・B, it seems the rent trend has not shown a major change since 2014. Lookingahead, do you think you will be able to raise rent at retail properties? Or do you consider
that it will remain stable going forward?

A2: For properties in the Active Retail category, we would like to increase the number ofvisitors and raise percentage-of-sales rent tied to the sales of stores. One measures forthis was the renewal of water show facilities and introduction of projection mapping at Canal
City Hakata conducted two years ago. As for inbound tourists, we have worked on theestablishment of tax-free counters that facilitate easier shopping, among other measures.
Going forward, we will continue our endeavors to increase the number of visitors with anaim to increase rental income.

Q3: If your office buildings in Fukuoka are performing well and you want to ride on thegrowth of Fukuoka, is there any consideration for increasing the investment ratio of officebuildings, etc. to accelerate the growth of dividends?

A3: At present, the percentage of retail properties in our portfolio is sixty percent. In thefuture, there is a possibility that the investment ratio of retail properties will be decreasing
as we consider investments in office buildings and other assets.

Q4: In terms of the appraisal cap rate, has the value dropped on the tail of the current
market condition? Will the cap rate remain on its downward trend? Tell me how you see it.

A4: The transaction yield is decreasing because there are few properties for sale available
on the market in contrast to the strong demand for buying properties in view of the potentialof Fukuoka. Reflecting this situation, the cap rate of the properties we own is also
decreasing. However, as some of the cap rate figures are at a level lower than before theglobal financial crisis, we believe that any further drop of the cap rate would be limited.

Q5: You’ve said the impact of the opening of MARK IS Fukuoka Momochi has been factored
into the performance of Konoha Mall Hashimoto, but I wonder if its current earnings forecast
is too conservative?

A5: When a new retail facility is built, early adopters in Fukuoka, or those who like newthings, would like to visit it. Therefore, it is assumed that more people would go to the newfacility after its opening. For Konoha Mall Hashimoto, we think this will have some initial
impact on its sales. However, considering the fact that between Konoha Mall Hashimotoand the new facility there are only 8 shops where tenants are overlapped, among otherfactors, you may say our forecast of the impact is a bit too conservative.

Q6: Looking ahead, many hotels are planned to be supplied in the vicinity of Canal City
Hakata. What impact do you think such a supply would have on the hotel and retailproperties you own?

A6: Like Tokyo and Osaka, Fukuoka is also seeing a growing number of inbound tourists.
Although the number of guest rooms increased by around 2,000 rooms in 2017 through thefirst half of 2018, the room occupancy rate of hotels in Fukuoka City has dropped only 1%
in the first half of 2018 from the first half of 2017. We believe that location is the key factor
for hotels. In this regard, Canal City Hakata should be able to take advantage of attracting
many people including tourists, a strength that only multi-use retail properties can exert.

We believe we can respond to environmental changes, including addressing the labor
shortage problem, by working to differentiate the property despite the increase incompetition.

This material contains statements on future business performances, plans, managementtargets and strategies, etc. These forward-looking statements are based on the latest
judgments made by Fukuoka REIT Corporation and Fukuoka Realty Co., Ltd., and theactual results of Fukuoka REIT Corporation may differ materially from those in the forwardlooking statements due to various factors. Therefore, Fukuoka REIT Corporation andFukuoka Realty Co., Ltd. do no guarantee their respective future performances describedin this material or in the explanations made on the basis of this material. Although Fukuoka
REIT Corporation and Fukuoka Realty Co., Ltd. have prepared this material based on theinformation believed to be reliable, it makes no guarantee as to the accuracy, rationality orcompleteness of the content. Please note that all the descriptions of this material areeffective as of the date when this material was prepared, and may be subject to change
without prior notice. This material is solely for the purpose of providing information toinvestors, and is not intended for soliciting investment or other activities. When making a
final decision on investment, investors are kindly requested to do so based on their own
judgment and responsibility, fully recognizing and understanding the investment-relatedrisks including a decrease in investment value.