37th Fiscal Period
Report on Performance andManagement Status (Semiannual Report)

Security Code 8968

September 1, 2022 to February 28, 2023

Fukuoka REIT
Corporation

8968

I. Overview of Fukuoka REIT Corporation

I. Overview of Fukuoka REIT Corporation
To Our Unitholders

Status of the Investment Corporation

We would like to express our sincere appreciation to all
unitholders for your continued support of Fukuoka REIT Corporation (FRC).
We are pleased to report on the performance results andmanagement status of FRC for the thirty-seventh fiscal period(September 1, 2022 to February 28, 2023).
During the fiscal period under review (the 37th fiscal period), the Japanese economy showed a mild pickup trend despite weakness seen in some areas. Although COVID-19 still
casts an impact, the economy is expected to keep improving
due in part to the effects of various political measures. On theother hand, with monetary tightening and other measures continuing globally, a downturn in overseas economies poses arisk of placing downward pressure on the domestic economy.
Under such circumstances, FRC’s portfolio achieved solid
performance across all asset types. Among them, Canal City
Hakata, a city-center retail property, in particular is on a recovery track as the impact of COVID-19 has faded and the movement of people has resumed driven by tourism demand andother factors.
FRC posted operating revenues of 9,037 million yen, operating income of 3,223 million yen, ordinary income of 2,851
million yen, and profit of 2,849 million yen for the fiscal period
under review. The dividend per unit came to 3,580 yen, which
represents an increase of 60 yen over the dividend forecast of
3,520 yen disclosed at the time of the announcement of thefinancial results for the 36th fiscal period.
With regard to external growth, we decided in March 2023
to acquire three properties in an endeavor to achieve an asset
size of 250 billion yen while diversifying risks in terms of theportfolio structure. Accordingly, we acquired Kumamoto East
Front Building (acquisition price: 1,450 million yen), an officebuilding, on March 28, 2023, and Axion Befu-Ekimae Premium (acquisition price: 1,520 million yen), a residential property,
on April 27, 2023, and plan to acquire Hakata FD BusinessCenter (planned acquisition price: 14,100 million yen), an office building, on September 1, 2023. After the acquisition ofthese new properties, the ratio of retail properties in the portfolio is anticipated to decrease to less than 50%.

FRC is Japan's first REIT specializing in regional properties. FRC manages a portfolio centering on retail facilities featuring excellent design and entertainment qualities and superior office buildings throughout all of Kyushu. With a central focus on Fukuoka,
and in Yamaguchi Prefecture and Okinawa Prefecture, we are utilizing our strength of knowing the local characteristics of realestate, which is a very regional-specific business.

Overview of the Investment Corporation
Zenji Koike
Executive Director
Fukuoka REIT Corporation
President and CEO
Fukuoka Realty Co., Ltd.

As for internal growth, we have been able to increase rents
in association with tenant replacement and contract renewal
mainly for office buildings and residential properties. Sales at
our retail properties and hotels are generally on a recovery
trend due to a pickup in demand from domestic and inboundcustomers.
In terms of “initiatives on sustainability,” one of the key measures of FRC, we have endeavored to “maintain and enhancebuilding performance and environmental performance,” which
covers the E (environment) area. This has resulted in the ratio of
properties certified as green buildings to the entire portfolio
standing at 80%. As an external evaluation, we have obtained“4 Stars” and “Green Star” in the GRESB Real Estate Assessment. In the GRESB Public Disclosure, we have obtained thehighest “A Level.” We will continue our proactive endeavors to
reduce CO2 emissions, coordinate with local communities, andprovide sustainability information to our unitholders through theissuance of integrated reports and other measures.
As a REIT specializing in regional properties, FRC continuously strives to maintain and enhance dividend per unit in astable manner by conducting steady asset management andquickly responding to market changes while receiving support
and cooperation from powerful sponsors leading the Kyushu
business world. We are resolved to make the utmost efforts tosecure stable earnings over the medium to long term andcontinuously offer stable dividends into the future based on
our management philosophy of “Act Local, Think Global.”
We greatly appreciate your continued support and cooperation.

II.

Name: Fukuoka REIT Corporation
Representative: Zenji Koike, Executive Director
Asset manager: Fukuoka Realty Co., Ltd. (Fukuoka Local Finance Branch Bureau (financial instruments) No. 10)
Listed date: June 21, 2005 (Tokyo Stock Exchange Inc., and Fukuoka Stock Exchange)

Sponsors

5%

5%

5%

THE BANK OFFUKUOKA, LTD.

THE NISHI-NIPPON CITY BANK, LTD.

Development Bank of Japan Inc.

55%

Director

Fukuoka Realty Co., Ltd.

FUKUOKA JISHO
CO., LTD. (Note)

Overview of Fukuoka REIT Corporation
To Our Unitholders ........................................................................................................ 1
Profile .............................................................................................................................................. 2
Trend of Growth in Asset Size of FRC / Financial Summary ......................................................... 3
Portfolio Overview .......................................................................................................................... 5
New Property Acquisition ............................................................................................................... 7
Initiatives on Sustainability ............................................................................................................. 8
Semiannual Report ............................................................................................................... 9III.
IV. Balance Sheet ....................................................................................................................... 29
V. Statement of Income ......................................................................................................... 31
VI. Statement of Changes in Net Assets ........................................................................ 32
VII. Statement of Cash Distribution .................................................................................... 33
VIII. Cash Flow Statement ........................................................................................................ 34
IX. Notes to Financial Statements ..................................................................................... 35
X. Supplementary Schedules ............................................................................................. 47

FUKUOKA REIT CORPORATION

1

Kyushu Electric Power Co., Inc.

(Asset Manager)

5%

5%

5%

5%

SAIBU GAS HOLDINGS CO., LTD.

Kyudenko Corporation

Nishi-Nippon Railroad Co., Ltd.

Kyushu Railway Company(Note) Concluded MOU with Fukuoka REIT Corporation and Fukuoka Realty Co., Ltd. concerning pipeline support.

Overview of the Asset Manager
Name: Fukuoka Realty Co., Ltd.
Representative: Zenji Koike, President and CEO
Address: 1-2-25, Sumiyoshi, Hakata Ward, Fukuoka City

Telephone: +81-92-272-3900
Established: December 26, 2003
Capital: 200,000,000 yen

Portfolio
RetailIndependent Auditor's Report ...................................................................................... 26

10%

Outsidedirector

Investment type (based on acquisition price)

CONTENTSI.

Profile53.0%

Investment area (based on acquisition price)

Office buildings Others

33.0%

Total leasable floor space

14.0%

577,161.81 m2

Fukuoka metropolitan area

77.2%

Occupancy rate at end of period

*Figures are based on properties owned as of February 28, 2023.

FUKUOKA REIT CORPORATION

2

Other
Kyushu areas

22.8%

97.9%

I. Overview of Fukuoka REIT Corporation

I. Overview of Fukuoka REIT Corporation

Trend of Growth in Asset Size of FRC
FRC More than Doubled Asset Size and Diversified Investment Types Since
The asset size stood at 205.9 billion yen (on an acquisition price basis) in the 37th fiscal period. FRC aims to achieve 250 billion yen,
Retail (left axis)(mm yen)

Office buildings (left axis)

Logistics (left axis)

Residence (left axis)

Hotels (left axis)

Listing
while working to dissipate risks through the portfolio as a diversified REIT.

(properties)

Number of investment properties (right axis)

225,000

2.0%

Acquired from Sponsor

16200,000

150,000

33

2.1%
Sponsor

4.1%

63.3%

properties* Higashi Hie Business Center, which FRC acquired in the10th fiscal period ended August 2009, was acquired bothfrom an outside seller and a sponsor. Accordingly, the acquisition price of the property has been evenly divided andadded to the acquisition price from outside sources and theacquisition from the sponsor, respectively. As for the numberof properties, it has been added as a single property to thenumber of acquisitions from the sponsor.

Other thansponsor

36.7%
75,649130,315

As ofmillion yen
February 28, 2023

205,964

31

million yen

million yen

23

19
100,000

15

15

32

16

16

16

16

17

23

27

25

24

28

27
25

26

29

29

36
7.2%

33
7.8%

29
33.0%

26

37.5%

20

20

17

11

11

33

4.4%

30

27

14

31

32

40

53.0% 48.9%
10

50,000

7

8

5

0

5th

10th

15th

20th

25th

30th

35th

(Feb. 2007)(Aug. 2009)(Feb. 2012)(Aug. 2014)(Feb. 2017)(Aug. 2019)(Feb. 2022)

 inancial Highlights for 37th Fiscal Period and Business Forecasts forF
38th and 39th Fiscal Periods
37th fiscal period

38th fiscal period

39th fiscal period(September 1, 2022 to February 28, 2023)(March 1, 2023 to August 31, 2023)(September 1, 2023 to February 29, 2024)

ActualForecast

Forecast

Operating revenues

mm yen

9,037

9,200

9,280

Operating expenses

mm yen

5,813

5,946

5,956

Operating income

mm yen

3,223

3,253

3,323

Ordinary income

mm yen

2,851

2,866

2,866

Profitmm yen

2,849

2,865

2,865

Dividend per unityen (1)

3,580

–

–

yen (2)

3,520

3,600

3,600

yen (1)-(2)

60

–

–

796,000

796,000

796,000

Latest dividend forecast per unit
Difference from forecast
Total number of investment units outstanding(at end of period)

units

0

(Note) As the senior equity interest in an anonymous partnership managed by CCH Bridge Y.K. was redeemed in the 14th fiscal period, it is excluded from the total acquired assets from the 14th fiscal period onward.
Since interest in the anonymous partnership managed by Limited Liability Company FRC1 was redeemed in the 26th fiscal period, it is excluded from the total acquired assets from the 26th fiscal period onward.

Financial Summary

Category

37th After acquisition(Feb. 2023) of 3 newproperties

FUKUOKA REIT CORPORATION

3

Dividend Performance
37th fiscal period end

February 28, 2023 (semiannual periods ending every February and August) 37th fiscal period days 181 days

37th fiscal period dividend 3,580 yen per unit

Dividend yield

4.4% {(Dividend / Days × 365) / Unit price (as of February 28, 2023)}

(yen)

4,000

3,580 3,600 3,600

3,000

2,000

1,000

0

5th

Feb.
[2007
]

10th

Aug.
[2009
]

15th

Feb.
[2012
]

20th

Aug.
[2014
]

25th

Feb.
[2017
]

30th

Aug.
[2019
]

*FRC implemented a 5-for-1 split of its investment units with March 1, 2014 as the effective date. Dividend per unit indicates the value after the 5-for-1 split.

FUKUOKA REIT CORPORATION

4

35th

Feb.
[2022
]

37th 38th 39th

Feb. Aug. Feb.
[2023][2023][2024](Forecast) (Forecast)I. Overview of Fukuoka REIT Corporation

I. Overview of Fukuoka REIT Corporation
Purchase of earthquake
insurance

Portfolio Overview
1

Retail2

Canal City Hakata

6

RetailRetail3

Canal City Hakata·B

7

Retail4

RetailPark Place Oita

8

FRC has purchased earthquake insurance
for all the properties (buildings) it owns.

RetailSunLive City Kokura

9

RetailRetail5

RetailOthers31 (residence)

Konoha Mall Hashimoto

10 Retail

Others33 (residence)

Others32 (residence)

D-Wing Tower

34 Others(hotel)Axion Befu-Ekimae
Premium (Note 2)

Granfore Yakuin Minami

35 Others(hotel)Hotel FORZA Oita

Tissage Hotel NahaB Office Building

OthersA (logistics)

Total Acquisition
Price

205.9
12 Office Building

Kurume Higashi
Kushiwara SC

Hanahata SC

13 Office Building

14 Office Building

K’s Denki Kagoshima

18 Office Building

19 Office Building

Saga

20 Office Building

Nagasaki

24
9

23

,
ay e
sw L in
resCit ypx daE no k sl aku 6 IF u u teRo

Fukuoka
Oita

34
3

7

Kumamoto

ssway
Kyushu Expre

17 Office Building

Sanix Hakata Building

Taihaku Street BusinessCentere
Lin

16 Office Building

Gofukumachi BusinessCenter

26

25
A Island City

27 4

ii
sh
Ka
JR

(Marina Side Building)

Canal City BusinessCenter Building(Note 1) Acquired on March 28, 2023.
(Note 2) Acquired on April 27, 2023.
(Note 3) Scheduled to be acquired on March 31, 2029.
(Note 4) Scheduled to be acquired on September 1, 2023.

15 Office Building

Fukuoka
Metropolitan Area

Marinoa City Fukuoka

Hakata FD BusinessCenter (Note 4)30
MiyazakiFukuoka
Metropolitan
Area

Sh
in
ka
ns
en

11 RetailKumamoto
Intercommunity SC

billion yen(as of February 28, 2023)

Sa
ny
o

Square Mall
Kagoshima Usuki

Island City Minato Bay relatedsite (Land with leaseholdinterest) (tentative) (Note 3)

3

Fukuoka IC

Kagoshima

Higashi Hie BusinessCenter21 Office Building

Tenjin Nishi-Dori Center
Building

22 Office Building

Tenjin North Front
Building

23 Office Building

Higashi Hie BusinessCenter II

3

6
10

Higashi Hie BusinessCenter III

Hakata Bay

KyushuArea

Okinawa

35
Others24 (logistics)

Fukuoka Expressway,
Route 1 (Loop Line)FUKUOKA
PayPay DOMEOthers28 (residence)

Others29 (residence)

202

LOGICITY
Minato Kashii

32

33
SubwayNanakumaLine

202

Others30 (residence)NishOmitetut su
a Te
Lin nj
e in

263

5

Fukuoka Airport

LOGICITY Hisayama

LOGICITY Wakamiya

Amex Akasakamon
Tower

FUKUOKA REIT CORPORATIONCity House Keyaki Dori

5

Aqualia Chihaya

01km

Fukuoka
E

xpr
ess
wa

y R oute

op Line)5 (LoFukuoka metropolitan area
Other Kyushu areas(including Okinawa and Yamaguchi prefectures)

0 - 10% Others

Investment type

(Logistics, Residence, Hotels and Other facilities)

8

FUKUOKA REIT CORPORATION

Investment area

40 - 70% Retail
20 - 50% Office buildings
0 - 30% Others

385
202

Investment Policy
60 - 90%
10 - 30%

ine
aL
im
sh
go
Ka

202

19
14 2016
3
22

Hakata1
12
2

Tenjin

29

Line

15

JR

Others27 (logistics)

Tosu Logistics Center

28
31 21
17

13

ay
sw
es ne
pr Li
Ex ifu
an za
rb a
U D

Others26 (logistics)

Kumamoto East Front
Building (Note 1)

B

18

Ohori Park

SubwayKuko Line

Hakata Chikushi-Dori
Center Building

JR Sasaguri

Others25 (logistics)

11

Tenjin Nishi-Dori BusinessCenter (Land with leasehold interest)

Kyushu University Fukuoka Ex pr
Hakozaki Campus R oute 4 Kas essway,
uya Line
Site

6I. Overview of Fukuoka REIT Corporation

I. Overview of Fukuoka REIT Corporation

New Property Acquisition

Initiatives on Sustainability

Kumamoto East Front Building

Axion Befu-Ekimae Premium

Office Building

Others (residence)

External Certification (Important Initiative) upport for the Task Force on Climate-related Financial
S
Disclosures (TCFD) recommendations (September 2022)
The Asset Management Company expressed its support for the “Task Force on Climate-related Financial Disclosures(TCFD)” recommendations established by the Financial Stability Board (FSB) for the purpose of discussing the disclosuresof climate-related financial information and the responses by financial institutions.
At the same time, it joined the “TCFD Consortium,” an organization formed by domestic companies supporting the TCFD
recommendations.

Signing of the Principles for Responsible Investment (PRI) (September 2018)
Overview of Property Acquired
Acquisition date
Acquisition priceAppraisal value
Location
Area (land)
Built
Total floor space
Acquisition cap rate

Overview of Property Acquired
Acquisition date
Acquisition priceAppraisal value

March 28, 2023
1,450 million yen
1,460 million yen
1-5-15 Shinyashiki, Chuo Ward, Kumamoto Cityand two other parcels of land
1,053.70 m²
December 1993
4,251.06 m²
5.0%

Location
Area (land)
Built
Total floor space
Acquisition cap rateSignificance of Acquisition

Significance of Acquisition• First office investment outside of Fukuoka Prefecture, seeking to diversify the portfolio• Approximately a two-minute walk from Befu Station on the
Fukuoka City Subway Nanakuma Line, the convenience of
which has increased with the opening of an extension on
March 27, 2023

• Investment in an area where business markets are expected
to become vitalized with the concentration of TSMC-affiliated companies and such

Hakata FD Business Center• Investment in an area that can expect further increase inpopularity as a residential area going forwardSignificance of Acquisition

Acquisition date (scheduled) September 1, 2023
Acquisition price (planned) 14,100 million yen
Appraisal value
15,000 million yen
10 Tsunabamachi, Hakata Ward, Fukuoka City
Locationand 13 other parcels of land
Area (land)
2,202.31 m²
Built
February 2023
Total floor space
20,603.46 m² (77% co-ownership interest)
Acquisition cap rate
4.1%

• Investment in a highly rare office building in the Gofukumachi
area, a major business area following Tenjin and Hakata• Investment in a newly built high-spec building* FRC plans to acquire 77%
co-ownership interest in thebuilding owned by the seller andthe land (a part of the building’s
leasehold land, so-called “partial
ownership”) held by the seller.

 ummary of Three Properties
S
Newly Acquired/to be Acquired
Acquisition price

Acquisition
cap rate

NOI yield (Note)

Cap rate after
depreciation

1,450 million yen

5.0%

6.0%

4.4%

Axion Befu-Ekimae Premium

1,525 million yen

3.4%

3.5%

2.5%

Hakata FD Business Center

14,100 million yen

4.1%

4.1%

3.1%

4.1%

4.2%

3.2%

Weighted average

Green Building Certification

GRESB Real Estate Assessment
Received the rating of “4 stars” and“Green Star” in the GRESB survey 2022

 atio of Environmental Certification
R
Acquisition
CASBEE

14.7%

GRESB Public Disclosure

Certification forReal Estate

BELS Evaluation
Certification
Certificatedproperties

Received the highest “A Level”

1.6%
DBJ Green Building
Certification

77.9%*As of February 28, 2023 (based on total floor space)

CASBEE Certification for Real Estate
CASBEE Certification for Real Estate is a system in which a third-party
organization certifies the accuracy of the assessment of buildings evaluated by CASBEE-Real Estate through an assessment of contents. It
scores buildings under each of the evaluation items in five categories,
comprising “1. Energy & Greenhouse Gases,” “2. Water,” “3. Use of
Resources & Safety,” “4. Biodiversity & Sustainable Site,” and “5. Indoor Environment.” Based on the scores, the evaluation results are
given one of four ranks: Rank S, Rank A, Rank B+, and Rank B. Twoproperties owned by FRC were certificated Rank A (February 2023).

Sanix Hakata Building(Rank A)DBJ Green Building Certification: 12 properties
BELS Evaluation Certification: 5 properties(Note) The indicated figure is based on the NOI described in the appraisal report.

FUKUOKA REIT CORPORATIONGRESB 2022

Green Building certification obtained for 80.0% of entire portfolio

80.0%

Office BuildingOverview of Property to be Acquired

Kumamoto East Front Building

April 27, 2023
1,525 million yen
1,530 million yen
3-296-1 Befu, Jonan Ward, Fukuoka City andtwo other parcels of land
494.74 m²
March 2023
2,010.53 m²
3.4%

PRI comprises an international network of financial institution investors working to realize six
principles for the finance industry, which were established in 2006 under the leadership of
then-UN Secretary-General Kofi Annan. PRI encourages the incorporation of environmental,social and governance (“ESG”) issues into investment decision-making processes, aiming tothereby help companies enhance their long-term investment performance and better fulfill their fiduciary duty.
The Asset Management Company agrees with the basic approach of PRI and became a signatory in September 2018.

7

FUKUOKA REIT CORPORATION

8

Granfore Yakuin Minami(Rank A)

II. Semiannual Report

II. Semiannual Report

Overview of Asset Management

Overview of Asset Management

2. Management assessment(1) Brief history of the investment corporation

1. Changes in operating results and financial position
Fiscal Period(unit)

Operating revenues

mm yen[Leasing business revenues]

mm yen36th fiscal period

37th fiscal period(September 1, 2021 to
February 28, 2022)(March 1, 2022 toAugust 31, 2022)(September 1, 2022 toFebruary 28, 2023)

mm yen8,658[8,658]5,472[4,810]
3,185
2,816
2,814
198,745[(0.5)]
82,400101,753[(0.0)]
98,9388,830[8,830]5,648[4,974]
3,181
2,805
2,804
201,223[1.2]
83,900101,743[(0.0)]
98,938

9,037[8,921]
5,813[5,147]
3,223
2,851
2,849
201,442[0.1]
83,900101,788[0.0]
98,938

units

796,000

796,000

796,000

796,000

796,000(d)/(e)yen(f)

mm yen127,833
2,817
3,539[3,539][–]127,8312,814
3,536[3,536][–]

127,818
2,804
3,523[3,523][–]

127,875
2,849
3,580[3,580][–]mm yenmm yenmm yenmm yen(a)

mm yen(b)

mm yen(c)

mm yen(d)

mm yen[Change from previous period]%[Change from previous period]%

Unitholders’ equity
Total number of investment
units outstanding
Net assets per unit
Total dividend
Dividend per unit

35th fiscal period(March 1, 2021 toAugust 31, 2021)

8,867[8,762]
5,662[4,978]
3,204
2,817
2,816
199,804[0.1]
82,400101,755[0.1]
98,938[Expenses related to leasing business]

Interest-bearing debt
Net assets

34th fiscal period(September 1, 2020 toFebruary 28, 2021)

8,904[8,904]
5,842[5,180]
3,061
2,677
2,675
199,559[0.3]
82,400101,614[0.1]
98,938Operating expenses
Operating income
Ordinary income
ProfitTotal assets

33rd fiscal period(e)[Earnings dividend per unit]

yen[Dividend in excess of earnings per unit]

yen

127,656
2,675
3,361[3,361][–](Note 2)%

1.3 [2.7]

1.4 [2.8]

1.4 [2.9]

1.4 [2.8]

1.4 [2.9](Note 2)%

2.6 [5.3]

2.8 [5.5]

2.8 [5.6]

2.8 [5.5]

2.8 [5.6](d)/(b)

%

50.9

50.9

51.2

50.6

50.5

%

Ratio of ordinary income to total
assetsReturn on net assets
Ratio of net assets to total
assets(f)/(e)(Note 2)%[(0.1)]
100.0

[0.0]
100.0

[0.3]
100.0

[(0.6)]
100.0[(0.1)]
100.0(c)/(b)

%

41.3

41.2

41.5

41.7

41.6

properties

31

32

32

33

33

m2

608,557.70

572,215.71

572,288.25

578,255.35

577,161.81

%

99.5

99.5

99.4

99.4

97.9

mm yen

1,623

1,552

1,486

1,514

1,499

mm yen

687
5,347
181
4,299
5,401

445
5,336
184
4,265
5,358

600
5,334
181
4,301
5,403

1,946
5,370
184
4,318
5,425

385
5,274
181
4,234
5,319

[Change from previous period]

Payout ratio
Ratio of interest-bearing debt tototal assets at end of period (LTV)[Other reference information]
Number of investment
properties (at end of period)
Total leasable floor space(at end of period)

Occupancy rate
(at end of period)

Depreciation and amortization
expensesCapital expenditures
Leasing NOI
Days in fiscal period
FFO (Funds from Operation)
FFO per unityen

(Note 2)mm yendays(g)(Note 2) mm yen(g)/(e)yen(Note 1) In the above table, monetary amounts are rounded down to the nearest specified unit and percentage figures are rounded off to one decimal place.
(Note 2) The indicators are calculated by using the following methods. Furthermore, the figures in square brackets represent annualized value based on the number of days in each fiscal period.
Ratio of ordinary income to total assets
Return on net assets
Payout ratio
Leasing NOIFFO (Funds from Operation)

Ordinary income / average total assets
Average total assets = (Total assets at beginning of period + total assets at end of period) / 2
Profit / average net assets
Average net assets = (Net assets at beginning of period + net assets at end of period) / 2
Dividend per unit (excluding dividend in excess of earnings) / profit per unit
Profit per unit = Profit / total number of investment units outstanding
Leasing business revenues – expenses related to leasing business + depreciation and amortization expenses
Profit + depreciation and amortization expenses + impairment loss - gain or loss on sales of real estate property

FUKUOKA REIT CORPORATION

9

Based on the “Act on Investment Trusts and Investment Corporations” (Act No. 198 in 1951 including later revisions, hereinafter
the “Investment Trusts Act”), FRC was established on July 2, 2004 as Japan’s first real estate investment trust specializing inregional properties, investing in real estate throughout Kyushu (including Okinawa Prefecture), with a central focus on Fukuoka
City, and Yamaguchi Prefecture (hereinafter the “Fukuoka and Kyushu areas”) by using its strength of expertise in regional characteristics, a feature in the real estate industry. FRC started asset management activities on November 9, 2004 after acquisitionof four properties comprising retail properties and an office building, and listed on the Tokyo Stock Exchange, Inc. and the Fukuoka Stock Exchange on June 21, 2005 as the nation’s (code number: 8968).
As of the end of the 37th fiscal period (February 28, 2023), FRC manages a total of 33 properties comprising 11 Retail, 11
Office buildings (including land with leasehold interest for an office building) and 11 Others.

(2) Investment environment and portfolio performance
During the fiscal period under review (the 37th fiscal period), the Japanese economy showed a mild pickup trend despite weakness seen in some areas. Although COVID-19 still casts an impact, the economy is expected to keep improving due in part tothe effects of various political measures. However, with monetary tightening and other measures continuing globally, a downturnin overseas economies poses a risk of placing downward pressure on the domestic economy. In addition, full attention shouldbe paid to the impacts of rising prices, restrictions on the supply side and changes in the financial and capital markets, etc.
In the Fukuoka and Kyushu area, the core investment target area for FRC, the economy has picked up, with the employment
situation improving moderately despite production activities remaining flat. As we foresee, we must be fully wary of rising raw
materials and other prices, overseas financial and economic trends, COVID-19 situations and the restrictions on the supply side.
As for land price trends, according to the 2023 Land Market Value Publication, the combined average price for residential andcommercial land as well as residential land price and commercial land price increased for the second consecutive year, respectively, on a national basis. Meanwhile, in Fukuoka City, the central area of FRC’s investment targets, land prices rose 10.6%
year-on-year for commercial land and 8.0% year-on-year for residential land.
Under such circumstances, FRC’s portfolio achieved solid performance across all asset types. Among them, Canal City Hakata, a city-center retail property, in particular is on a recovery track as the impact of COVID-19 has faded and the movement ofpeople has resumed driven by tourism demand and other factors.
In the 37th fiscal period, FRC conducted disposition of Kurume Higashi Kushiwara SC (15% co-ownership interest) on February 28, 2023.
When analyzing FRC’s portfolio (on an acquisition price basis) as of the end of the 37th fiscal period by investment target area,
the investment ratio in the Fukuoka metropolitan area accounted for 77.2%; when analyzing by property type, Retail, Officebuildings, and Others accounted for 53.0%, 33.0% and 14.0%, respectively.
Fukuoka Realty Co., Ltd. to which FRC entrusts its asset management (the Asset Manager) has established the Sustainability
Policy and Regulations Concerning Sustainability Management to promote sustainability through environmental, social and governance (ESG) considerations. In the 37th fiscal period, FRC has been newly granted certification of the CASBEE for Building
Certification for two of its owned properties. In terms of external certifications, FRC has acquired either DBJ Green Building Certification, CASBEE for Building Certification or BELS Evaluation for 80.0% of its portfolio properties on a total floor space basis.

(3) Summary of fundraising
The balance of FRC’s interest-bearing debt outstanding (including investment corporation bonds) at the end of the 37th fiscal
period totaled 83,900 million yen. The loan-to-value ratio (ratio of interest-bearing debt (including investment corporation bonds)
to total assets) was 41.6% and the ratio of fixed-interest rate debt (ratio of fixed-interest rate debt (including investment corporation bonds) to total interest-bearing debt) stood at 93.4% at the end of the 37th fiscal period. In addition, with regard to thecommitment line agreement (credit limit: 7,000 million yen) with The Nishi-Nippon City Bank, Ltd. serving as the agent, FRC
extended the commitment period by a year, lengthening the remaining term of commitment to three years. FRC will continue its
endeavors to reduce refinancing risks by dispersing debt repayment dates and other measures. At the same time, FRC will investigate mitigating the possible increase in financing costs in accordance with higher interest rates going forward, including
review of the ratio of fixed-interest rate debt.

FUKUOKA REIT CORPORATION

10

II. Semiannual Report

II. Semiannual Report

Overview of Asset Management

Overview of Asset Management

Moreover, the credit ratings assigned to FRC as of the end of the 37th fiscal period are as follows:
Credit Rating Agency
Rating and Investment Information, Inc. (R&I)
Japan Credit Rating Agency, Ltd. (JCR)

Rating Type
Issuer Rating
Long-term Issuer Rating



RatingA+
AA−

Rating Outlook
StableStableFiscal period

As a result of these management efforts, operating revenues totaled 9,037 million yen and operating income after excluding
operating expenses such as expenses related to leasing business and asset management fees totaled 3,223 million yen. Ordinary income was 2,851 million yen and profit amounted to 2,849 million yen. Management decided to make a dividend of 3,580
yen per unit to meet the requirements of special tax measures for an investment corporation (as stipulated in Article 67-15 of the
Act on Special Measures Concerning Taxation of Japan [Act No. 26 in 1957 including later revisions]). Under this act, an investment corporation is allowed to deduct the maximum amount of dividends paid to investors from its taxable income.

Changes in unitholders’ capital from the incorporation of FRC to the end of the 37th fiscal period are as follows:

July 2, 2004
November 8, 2004
June 20, 2005
July 21, 2005
September 7, 2006
March 1, 2011
March 1, 2013
March 1, 2014
April 27, 2015
March 1, 2018

Established through private placement
Additional issue of investment units through private offering
Additional issue of new investment units through public offering
Additional issue of new investment units through third-party allotment
Additional issue of new investment units through public offering
Additional issue of new investment units through public offering
Additional issue of new investment units through public offering
Split of investment units
Additional issue of new investment units through public offering
Additional issue of new investment units through public offering

Number of investment units
issued (units)
Increase
Balance250
250
82,80083,0507,000
90,0502,000
92,05015,000107,050
16,000123,050
14,950138,000
552,000
690,000
57,000747,000
49,000796,000

Unitholders’ capital(mm of yen) (Note 11)

Increase
125
41,4005,944
1,698
11,096
8,913
10,263–
11,701
7,795

Remarks

Balance
125
41,52547,46949,16760,264
69,17779,441
79,441
91,142
98,938(Note 3)(Note 4)(Note 5)(Note 6)(Note 7)(Note 8)(Note 9)(Note 10)The highest and lowest (closing price) market prices on the Real Estate Investment Trust Section of the Tokyo Stock Exchange,
Inc., on which FRC’s investment certificates are listed, in each fiscal period are as follows:
33rd fiscal period

34th fiscal period

35th fiscal period

36th fiscal period

37th fiscal period(September 1, 2020 toFebruary 28, 2021)(March 1, 2021 toAugust 31, 2021)(September 1, 2021 to
February 28, 2022)(March 1, 2022 toAugust 31, 2022)(September 1, 2022 toFebruary 28, 2023)

179,900 yen
126,300 yen

191,700 yen
163,100 yen

176,000 yen
153,400 yen

173,500 yen
153,200 yen

176,100 yen
160,400 yen

4. Results of dividend, etc.
With respect to the dividend for the 37th fiscal period, FRC determined to distribute the whole unappropriated surplus (except
for the fraction amount, which is the dividend per unit of less than 1 yen) to be eligible for special tax measures for an investment
corporation (as stipulated in Article 67-15-1 of the Special Taxation Measures Act) that allow FRC to deduct the maximum
amount of earnings dividend from its taxable income. Accordingly, dividend per unit for the fiscal period was 3,580 yen.
FUKUOKA REIT CORPORATION

11

36th fiscal period

37th fiscal period(September 1, 2021 to
February 28, 2022)(March 1, 2022 toAugust 31, 2022)(September 1, 2022 toFebruary 28, 2023)

Total dividends[Dividend per unit]

Earnings dividends[Earnings dividend per unit]

Contribution refund[Contribution refund per unit]

2,675,572
2,675,604
248
2,675,356[3,361 yen]
2,675,356[3,361 yen]–[–]

2,816,802
2,817,051
7
2,817,044[3,539 yen]
2,817,044[3,539 yen]–[–]

2,814,814
2,814,821
165
2,814,656[3,536 yen]
2,814,656[3,536 yen]–[–]

2,804,394
2,804,559
251
2,804,308[3,523 yen]
2,804,308[3,523 yen]–[–]

2,849,927
2,850,179
499
2,849,680[3,580 yen]
2,849,680[3,580 yen]
–
[–]

–
[–]

–
[–]

–
[–]

–
[–]

–
[–]

–
[–]

–
[–]

–
[–]

–
[–]

–
[–]

Of the contribution refund,
distribution of the reserve fortemporary difference adjustments

Of the contribution refund,
distribution through the reduction inunitholders’ capital for tax purposes(Of the contribution refund per unit, distribution
per unit through the reduction in unitholders’capital for tax purposes)(Note 2)[Changes in market price of investment certificates]

HighestLowest35th fiscal period(March 1, 2021 toAugust 31, 2021)(Note 1)

(Note 1) FRC was established with an issue of investment units at 500,000 yen per unit.
(Note 2) New investment units were issued through private offering at the issue price of 500,000 yen per unit for the purpose of procuring funds for acquiring new properties, etc.
(Note 3) New investment units were issued through public offering at the issue price of 880,000 yen per unit (purchase price of 849,200 yen) for the purpose of procuring funds for acquiring new properties, etc.
(Note 4) New investment units were issued through third-party allotment at the purchase price of 849,200 yen per unit.
(Note 5) New investment units were issued through public offering at the issue price of 766,360 yen per unit (purchase price of 739,772 yen) for the purpose of procuring funds for acquiring new properties, etc.
(Note 6) New investment units were issued through public offering at the issue price of 576,083 yen per unit (purchase price of 557,078 yen) for the purpose of procuring funds for acquiring new properties, etc.
(Note 7) New investment units were issued through public offering at the issue price of 710,580 yen per unit (purchase price of 686,529 yen) for the purpose of procuring funds for acquiring new properties, etc.
(Note 8) FRC implemented a 5-for-1 split of its investment units.
(Note 9) New investment units were issued through public offering at the issue price of 212,257 yen per unit (purchase price of 205,290 yen) for the purpose of procuring funds for acquiring new properties, etc.
(Note 10) New investment units were issued through public offering at the issue price of 164,414 yen per unit (purchase price of 159,102 yen) for the purpose of procuring funds for acquiring new properties, etc.
(Note 11) No consideration has been given to the change in unitholders’ capital due to distribution of dividend in excess of earnings that came from reserve for temporary difference adjustments. The same shallapply hereafter.

Fiscal period

34th fiscal period(September 1, 2020 toFebruary 28, 2021)(Of the contribution refund per unit, distribution
per unit of the reserve for temporary difference
adjustments)

3. Change in the number of investment units issued
Item

33rd fiscal period

ProfitUnappropriated surplus
Undistributed earnings(4) Summary of performance and dividend

Date(thousands of yen)

5. Future portfolio management policy and vital issues
FRC will further reinforce management and leasing capabilities by cooperating with property management companies including
sponsor companies, and secure and maintain the stable operation of the properties by making the most use of their advantages.
FRC will make investments based on the basic policy stipulated in its Articles of Incorporation and its basic philosophy: focusing on “specialized areas in which FRC can demonstrate its competitive edge” that are in “high growth potential markets.” Bygeographic location, of Fukuoka and Kyushu areas, FRC will invest 60% to 90% of its assets in the Fukuoka metropolitan area
since the Fukuoka metropolitan area is expected to have a high population growth rate in the future. In addition to the Fukuoka
metropolitan area, management has decided to actively acquire properties in major cities if there are regions or properties where
FRC can generate investment merits from community-oriented viewpoints. FRC will acquire high-quality properties with adequate use of its advantages, such as information gathering ability in the areas, good knowledge of regional properties and close
relations with the local business community including its sponsors and governments, so that investors can continue to invest in
FRC with assurance.
Meanwhile, FRC will build stronger relationships with financial institutions to realize stable fundraising and try to maintain asolid financial structure.

6. Significant events that have occurred after the end of the 37th fiscal period
No relevant items.
(Reference information)

Acquisition of AssetOn March 28, 2023, FRC acquired the following real estate.
Type of asset acquired

Property name

Use

Real estate

Kumamoto East Front Building

OfficeLocation
1-5-15, Shinyashiki, Chuo
Ward, Kumamoto City and 2other lots

SellerAcquisition price

Acquisition dateNot disclosed

1,450 million yen(Note 1)

(Note 2)

March 28, 2023

(Note 1) The seller is a domestic operating company but is not disclosed as no consent to disclosure has been obtained from the seller. Note that the seller does not fall under the category of related parties of
FRC or Fukuoka Realty Co., Ltd., the asset management company of FRC.
(Note 2) The acquisition price does not include acquisition expenses and the amount equivalent to the settlement of property taxes and city planning taxes, etc.

FUKUOKA REIT CORPORATION

12

II. Semiannual Report

II. Semiannual Report

Overview of Asset Management

Overview of the Investment Corporation
3. Matters related to directors

On March 30, 2023, FRC concluded a sales agreement regarding acquisition of real estate trust beneficiary interest.
Type of asset acquired
Real estate trust
beneficiary interest

Property nameHakata FD Business Center

Use

Location

SellerOffice10 Tsunabamachi, Hakata
Ward, Fukuoka City and 13
other lots

Fukuoka Jisho Co.,
Ltd.

Acquisition price

Acquisition date(planned)(planned)

14,100 million yen September 1, 2023
(Note 2)

(Note 1) Although the asset to be acquired is actual real estate as of the contract date, the seller plans to place 77% co-ownership interest in the property’s building it owns and the land it owns (part of thebuilding’s leasehold land; so-called “partial ownership”) in a trust for the trustee by the acquisition date (planned), and FRC plans to acquire the beneficiary interest in said trust.
(Note 2) The acquisition price (planned) does not include acquisition expenses and the amount equivalent to the settlement of property taxes and city planning taxes, etc.
(Note 3) The beneficiary interest disposition agreement for the acquisition of the property (the "Acquisition Agreement") falls under the category of forward commitment, etc. (a postdated transaction agreement
where the settlement and delivery are to take place one month or more after the conclusion of the agreement as well as other similar agreements). FRC shall be able to cancel the Acquisition Agreement
without penalty if it becomes impossible to achieve the purpose of the agreement due to a cause not attributable to FRC. In the Transaction Agreement FRC will not pay any deposit.

(1) The names of FRC’s directors, etc. and their fees for the 37th fiscal period are as
follows:
Title

Type of asset acquired
Real estate trust
beneficiary interest

Property name

Use

Axion Befu-Ekimae Premium

Residence

Location
3-296-1, Befu, Jonan Ward,
Fukuoka City and 2 other lots

SellerShibata Industry Co.,
Ltd.

Acquisition price

Acquisition date

1,525 million yen

April 27, 2023

(Note)(Note) The acquisition price does not include acquisition expenses and the amount equivalent to the settlement of property taxes and city planning taxes, etc.

Supervisory Directors

Zenji Koike
Takashi Tanabe
Yasuo Kawasho
PricewaterhouseCoopers
Aarata LLC

President and CEO, Fukuoka Realty Co., Ltd.
Representative attorney at law at Tanabe Law Office
Representative Partner, Kawasho Authorize Accountant Office
–

–
3,600
8,500

(Note 1) Zenji Koike, the Executive Director, possesses seven investment units of FRC under his own name. The Supervisory Directors do not possess investment units of FRC under their own name or underanother person’s name. Although there are cases where the Supervisory Directors may be directors of companies other than those stated above, none of the companies or those stated above havevested interest in FRC.
(Note 2) The fees for the Executive Director and Supervisory Directors are the amounts paid to them in the 37th fiscal period, and the fee to the Independent Auditor is the amount payable to it (estimate) foraudits pertaining to the 37th fiscal period.

FRC will review at its Board of Directors meetings decisions regarding the dismissal of the Independent Auditor in accordancewith the provisions of the Investment Trusts Act, and review decisions not to reappoint the Independent Auditor following thecomprehensive consideration of the audit quality, audit fee and other various conditions.

4. Matters concerning directors and officers liability insurance agreement

1. Summary of unitholders’ capital
Total number of authorized investment units
Total number of investment units outstanding
Number of unitholders

Total fee for each title for the
37th fiscal period(2) Policy on deciding to dismiss and not to reappoint the Independent Auditor

Overview of the Investment Corporation

Fiscal period

Major concurrent assignments(thousands of yen) (Note 2)

Executive Director

Independent Auditor

On April 27, 2023, FRC acquired the following real estate trust beneficiary interest.

Name of directors, etc.

FRC has entered into a directors and officers liability insurance agreement as follows:

33rd fiscal period

34th fiscal period

35th fiscal period

36th fiscal period

37th fiscal period

as of February 28, 2021

as of August 31, 2021

as of February 28, 2022

as of August 31, 2022

as of February 28, 2023

10,000,000 units
796,000 units
13,817

10,000,000 units
796,000 units
13,306

10,000,000 units
796,000 units
13,641

10,000,000 units
796,000 units
13,55410,000,000 units
796,000 units
13,524

2. Matters related to investment units

Scope of the insured

Executive Director andSupervisory Directors

Overview of agreement[Overview of insured event covered by the insurance]
The directors and officers liability insurance agreement covers such losses as compensation payment and dispute costs to be borne by the
insured when they receive a claim for compensation for the actions they have taken based on their positions at FRC.
[Measures to ensure the appropriateness of the execution of duties]
When the insured suffer damages by actions which they executed while recognizing that it may constitute criminal act or violate the laws andregulations, the loss is not subject of the protection.

The following table sets forth the major unitholders of FRC as of February 28, 2023.
Name

Investment units held (units)

Custody Bank of Japan, Ltd. (Trust account)
The Master Trust Bank of Japan, Ltd. (Trust account)
Fukuoka Jisho Co., Ltd.
The Nomura Trust and Banking Co., Ltd. (Investment trust account)
The Shinkumi Federation BankSTATE STREET BANK WEST CLIENT – TREATY 505234
MetLife, Inc.
JP MORGAN CHASE BANK 385771
Shikoku Railway Company
SSBTC CLIENT OMNIBUS ACCOUNT
Total

215,223
97,765
73,13634,091
14,76012,865
10,227
9,400
9,130
9,015
485,612(Note) Percentage of total number of investment units outstanding is rounded down to the nearest specified unit.

FUKUOKA REIT CORPORATION

13

Percentage of total number ofinvestment units outstanding (%) (Note)
27.03
12.28
9.18
4.28
1.85
1.61
1.28
1.18
1.14
1.13
61.00

5. Names of asset management company, asset custodian and generaladministrators as of the end of the 37th fiscal period
The following table sets forth the asset management company, asset custodian and general administrators of FRC as of February 28, 2023.
Category of entrustment
Asset Management Company
Asset Custodian
General Administrator (accounting matters, etc.)
General Administrator (administration of unitholders’ list)
General Administrator (administration of investment corporation bonds registry)
General Administrator (administration of investment corporation bonds registry)Name
Fukuoka Realty Co., Ltd.
Mitsubishi UFJ Trust and Banking Corporation
Mitsubishi UFJ Trust and Banking Corporation
Sumitomo Mitsui Trust Bank, Limited
Sumitomo Mitsui Banking Corporation
Mizuho Bank, Ltd.

FUKUOKA REIT CORPORATION

14

II. Semiannual Report

II. Semiannual Report

Status of FRC’s Assets under Management

Status of FRC’s Assets under Management

1. FRC’s asset structure
Type of asset

Real estate

Real estate trust
beneficiary interest

Use

3. Details of real estate properties in the portfolio

Area(Note 1)37th fiscal period

as of August 31, 2022

as of February 28, 2023

The following table provides details of the real estate properties owned by FRC as of February 28, 2023.

Total value of
properties owned

Percentage of
total assets

Total value of
properties owned

Percentage of
total assets(mm of yen) (Note 2)(%) (Note 3)(mm of yen) (Note 2)(%) (Note 3)

–
–
–
–
–
2,128
66,78037,08959,306–
19,632
5,226
11,060

–
–
–
–
–
1.1
33.2
18.4
29.5
–
9.8
2.6
5.5

–
–
–
–
–
2,122
66,37336,52259,021–
19,535
5,171
12,695

–
–
–
–
–
1.1
32.9
18.1
29.3
–
9.7
2.6
6.3

201,223[190,171]100.0[94.5]

201,442[188,755]

100.0[93.7]

Fukuoka metropolitan area
RetailOther Kyushu areas
Fukuoka metropolitan area
Office buildings
Other Kyushu areas
Fukuoka metropolitan area
OthersOther Kyushu areas
Fukuoka metropolitan area
RetailOther Kyushu areas
Fukuoka metropolitan area
Office buildings
Other Kyushu areas
Fukuoka metropolitan area
OthersOther Kyushu areas
Deposits and other assets
Total amount of assets (Note 4)

36th fiscal period(Note 1) “Fukuoka metropolitan area” refers to cities, towns and villages where 10% or more of the population commute to Fukuoka City for school and work, according to the 2020 census, which states “thenumber of workers and students aged 15 years or older (students including those aged 14 years or younger: particular reference) commuting between their homes and places of work or school” conducted by Fukuoka City and the Statistics Bureau of the Ministry of Internal Affairs and Communications. “Other Kyushu areas” refers to all other parts of Kyushu (excluding the Fukuoka metropolitan area).
(Note 2) “Total value of properties owned” is based on the value on the balance sheet (the value of real estate and real estate trust beneficiary interest is the book value after depreciation).
(Note 3) Concerning the “Percentage of total assets,” the figures are rounded off to one decimal place. The total of individual percentages in the above table may not equal 100%.
(Note 4) Figures in square brackets for “Total amount of assets” refer to the value and percentage of real estate owned in effect to the total amount of assets.

2. Major assets owned by FRC
The following is an overview of the major assets (top ten properties on a book value basis) owned by FRC as of February 28,
2023.
Real estate property name (Note 1)
Canal City Hakata
Canal City Hakata·B
Park Place Oita
Canal City Business Center Building
Konoha Mall Hashimoto
Gofukumachi Business Center
Tenjin Nishi-Dori Business Center(Land with leasehold interest)
LOGICITY Minato Kashii
SunLive City Kokura
Taihaku Street Business Center
Total

Real estate property name2-22, 1-chome, Sumiyoshi, Hakata
Ward, Fukuoka City
2-1, 1-chome, Sumiyoshi, Hakata
Canal City Hakata·B
Ward, Fukuoka City1, 2-chome, Koen Dori Nishi, Oita City,
Park Place Oita
Oita
14-1, 2-chome, Kami Kuzuhara,
SunLive City Kokura
Kokura Minami Ward, Kitakyushu City
27-2, 2-chome, Hashimoto, Nishi
Konoha Mall Hashimoto
Ward, Fukuoka City
2-18, 2-chome, Usuki, Kagoshima
Square Mall Kagoshima Usuki
City, Kagoshima
1-5, 1-chome, Kozono, Higashi Ward,
Kumamoto Intercommunity SC
Kumamoto City
9-12, 4-chome, Hanahata, Minami
Hanahata SC
Ward, Fukuoka City
370-3 Higashi Kushihara, Kurume City,(Note
2)
Kurume Higashi Kushiwara SC
Fukuoka
4-12, Tokai-cho, Kagoshima City,
K’s Denki Kagoshima
Kagoshima
12-30, 2-chome, Odo, Nishi Ward,
Marinoa City Fukuoka
Fukuoka City
(Marina Side Building)

Canal City Hakata

29,624
20,535
20,398
12,6309,934
8,615

46,585.57
31,141.44
121,183.73
23,031.14
22,191.52
19,905.34

38,020.01
29,514.59
120,915.19
23,031.14
22,191.52
19,623.35

81.6
94.8
99.8
100.0
100.0
98.6

7,754

1,343.51

1,343.51

100.0

1.8

Office buildings

City House Keyaki Dori

7,645
5,497
5,466
128,104

43,233.72
61,450.22
14,677.35
384,743.54

43,233.72
61,450.22
14,546.48
373,869.73

100.0
100.0
99.1
97.2

Undisclosed (Note 5)
3.3
3.7
–

OthersRetailOffice buildings–

Aqualia Chihaya(mm of yen)

(Note 4)

Total leased floor Occupancy rate(%) (Note 2)
space (m2)(Note 1) The properties listed above are owned in the form of trust beneficiary interest.
(Note 2) “Occupancy rate” refers to the percentage of leased floor space to leasable floor space and the figures are rounded off to one decimal place.
(Note 3) “Percentage of total leasing business revenues” is rounded off to one decimal place.
(Note 4) The total leasable floor space indicates the land area recorded in the real estate registry. The same shall apply hereafter.
(Note 5) The figures are not disclosed as no consent to disclosure has been obtained from the tenants.

Main use
RetailRetailRetailOffice buildings
RetailOffice buildings

D-Wing Tower
Granfore Yakuin Minami
Hotel FORZA Oita
Tissage Hotel Naha
Tosu Logistics Center

LOGICITY Hisayama
LOGICITY Wakamiya

4-23, 2-chome, Maizuru, Chuo Ward,
Fukuoka City
16-21, 2-chome, Kego, Chuo Ward,
Fukuoka City
3-12, 4-chome, Chihaya, Higashi
Ward, Fukuoka City
10-38, 2-chome, Daimyo, Chuo Ward,
Fukuoka City
11-20, 1-chome, Hirao, Chuo Ward,
Fukuoka City
5-18, 1-chome, Chuo-cho, Oita City,
Oita
14-1, 2-chome, Nishi, Naha City,
Okinawa
1607 Aza Momota, Himekata-cho,Tosu City, Saga
3-4, 2-chome, Minato Kashii, Higashi
Ward, Fukuoka City
2335-3 Oaza Yamada, Hisayamamachi, Kasuya County, Fukuoka
1406 Shimoaruki, Miyawaka City,
Fukuoka

Others subtotal:
Total

15

Trust beneficiaryinterest
Trust beneficiaryinterest
Trust beneficiaryinterest
Trust beneficiaryinterest
Trust beneficiaryinterest
Trust beneficiaryinterest
Trust beneficiaryinterest
Trust beneficiaryinterest
Trust beneficiaryinterest
Trust beneficiaryinterest
Trust beneficiaryinterest

Office buildings subtotal:
Amex Akasakamon Tower

LOGICITY Minato Kashii

FUKUOKA REIT CORPORATION

Trust beneficiaryinterest
Trust beneficiaryinterest
Trust beneficiaryinterest
Trust beneficiaryinterest
Trust beneficiaryinterest
Trust beneficiaryinterest
Trust beneficiaryinterest
Trust beneficiaryinterest
Trust beneficiaryinterest
Trust beneficiaryinterest
Trust beneficiaryinterest

Retail subtotal:
2-25, 1-chome, Sumiyoshi, Hakata
Ward, Fukuoka City
10-10, Kami Gofukumachi, Hakata
Gofukumachi Business Center
Ward, Fukuoka City
1-23, 2-chome, Hakataeki Higashi,
Sanix Hakata Building
Hakata Ward, Fukuoka City
3-21 Gokushomachi, Hakata Ward,
Taihaku Street Business Center
Fukuoka City
1-2, 3-chome, Higashi Hie, Hakata
Higashi Hie Business Center
Ward, Fukuoka City
5-28, 2-chome, Tenjin, Chuo Ward,
Tenjin Nishi-Dori Center Building
Fukuoka City
4-20, 4-chome, Tenjin, Chuo Ward,
Tenjin North Front Building
Fukuoka City
5-13, 1-chome, Higashi Hie, Hakata
Higashi Hie Business Center II
Ward, Fukuoka City45, 4-chome, Higashi Hie, Hakata
Higashi Hie Business Center III
Ward, Fukuoka City
149, 2-chome, Tenjin, Chuo Ward,
Tenjin Nishi-Dori Business Center
Fukuoka City
(Land with leasehold interest)
5, 2-chome, Hakataekiminami, Hakata
Hakata Chikushi-Dori Center Building Ward, Fukuoka City

Canal City Business Center Building

Percentage of total
leasing businessrevenues (%) (Note 3)
11.3
10.7
13.6
7.4
9.5
6.7

Total leasable
floor space (m2)Book value

Form ofownership

Location

Trust beneficiaryinterest
Trust beneficiaryinterest
Trust beneficiaryinterest
Trust beneficiaryinterest
Trust beneficiaryinterest
Trust beneficiaryinterest
Trust beneficiaryinterest
Trust beneficiaryinterest
Trust beneficiaryinterest
Trust beneficiaryinterest
Real estate

Period-end
Book value atTotal leasable
appraisal value end of period
floor space (m2) (mmof yen) (Note 1)(mm of yen)

Real estate appraiser

46,585.57

29,50029,624

31,141.44

21,80020,535

Tanizawa Sogo Appraisal
Co., Ltd.
Tanizawa Sogo Appraisal
Co., Ltd.

121,183.73

20,50020,398Japan Real Estate Institute61,450.22

8,530

5,497

Japan Real Estate Institute22,191.52

10,1009,934

Tanizawa Sogo Appraisal
Co., Ltd.

14,602.88

4,710

4,217

Japan Real Estate Institute6,968.66

2,790

1,910

Japan Real Estate Institute2,801.15

1,200

945

5,497.63

2,337

1,657

7,296.17

3,490

2,840

33,069.82

5,860

5,332

Tanizawa Sogo Appraisal
Co., Ltd.
Tanizawa Sogo Appraisal
Co., Ltd.
Tanizawa Sogo Appraisal
Co., Ltd.
Tanizawa Sogo Appraisal
Co., Ltd.

352,788.79

110,817

102,895

23,031.14

18,80012,63019,905.34

15,6008,615

Tanizawa Sogo Appraisal
Co., Ltd.
Tanizawa Sogo Appraisal
Co., Ltd.

6,293.75

6,850

3,716

Japan Real Estate Institute

14,677.35

9,830

5,466

Japan Real Estate Institute13,482.02

8,990

4,314

Tanizawa Sogo Appraisal
Co., Ltd.

3,339.32

3,310

2,640

Japan Real Estate Institute5,261.64

4,930

2,329

Japan Real Estate Institute6,214.77

4,790

3,861

2,981.14

3,450

3,198

Tanizawa Sogo Appraisal
Co., Ltd.
Tanizawa Sogo Appraisal
Co., Ltd.

1,343.51

8,500

7,754

Japan Real Estate Institute5,994.41

4,550

4,491

Tanizawa Sogo Appraisal
Co., Ltd.

102,524.39

89,60059,021

4,821.25

2,000

1,588

2,710.86

1,120

860

5,619.69

2,060

1,142

Japan Real Estate Institute7,187.59

3,940

2,591

2,496.06

1,390

1,055

Tanizawa Sogo Appraisal
Co., Ltd.
Tanizawa Sogo Appraisal
Co., Ltd.

5,785.44

1,900

1,306

Japan Real Estate Institute3,758.76

2,910

2,739

Tanizawa Sogo Appraisal
Co., Ltd.

4,173.29

1,440

1,125

Japan Real Estate Institute43,233.72

9,760

7,645

24,505.65

5,790

4,651

Tanizawa Sogo Appraisal
Co., Ltd.
Tanizawa Sogo Appraisal
Co., Ltd.
Tanizawa Sogo Appraisal
Co., Ltd.

17,556.32

2,550

2,122

121,848.63
577,161.81

34,860235,277

26,830188,746FUKUOKA REIT CORPORATION

16

Daiwa Real EstateAppraisal Co., Ltd.
Daiwa Real EstateAppraisal Co., Ltd.

II. Semiannual Report

II. Semiannual Report

Status of FRC’s Assets under Management

Status of FRC’s Assets under Management(Property to be acquired)Real estate property nameLocation

Part of 32-1, Minato Kashii 3-chome,Island City Minato Bay related site
(Land with leasehold interest) (tentative) Higashi-Ward, Fukuoka City

Form ofownership

Period-end
Book value atTotal leasable
appraisal value end of period
floor space (m2) (mmof yen) (Note 1)(mm of yen)

Real estate

Approx. 39,142

8,210(Note 5)(Note 5)(Note 3) (Note 4)−

Real estate appraiser
Tanizawa Sogo Appraisal
Co., Ltd.

(Note 1)	“Period-end appraisal value” refers to the evaluation value based on appraisals by a real estate appraiser in conformity with the method and standards for asset evaluation stipulated in FRC’s Articles ofIncorporation and rules stipulated by The Investment Trusts Association, Japan.
(Note 2) FRC disposed Kurume Higashi Kushiwara SC (15% co-ownership interest) on February 28, 2023. The same shall apply hereafter.
(Note 3)	The acquisition of the property falls under the category of forward commitment, etc. as provided by the “Comprehensive Guidelines for Supervision of Financial Instruments Business Operators, etc.” set
forth by the Financial Services Agency. As a reservation deposit, FRC paid the amount equivalent to 5% (approximately 4 mm yen) of the purchase price corresponding to its acquisition ratio at the timeof applying to the Fukuoka City Government for the purchase. If FRC withdraws from the purchase of the property, the deposit shall be used as cancellation penalty.
(Note 4) The property is planned for delivery on March 31, 2029 (which may be changed depending on the situation of its foundation enhancement work and other factors).
(Note 5) The location and total leasable floor space are to be finalized after measurement surveys to be conducted later and registration of subdivided lots.
(Note 6) Property to be acquired indicates the property for which contract has been concluded as of the end of the 37th fiscal period.

Real estate property name37th fiscal period(March 1, 2022 to August 31, 2022)(September 1, 2022 to February 28, 2023)(mm of yen)
(Note 4)(%) (Note 5)

97.7
96.0
99.8
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0

1,016
929
1,164
270
816
255
89
40
88
111
177

11.5
10.5
13.2
3.1
9.2
2.9
1.0
0.5
1.0
1.3
2.0

(Note 1)(%) (Note 3)(mm of yen)
(Note 4)(%) (Note 5)

81.6
94.8
99.8
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0

1,011
958
1,216
293
844
258
90
40
87
109
178

11.3
10.7
13.6
3.3
9.5
2.9
1.0
0.5
1.0
1.2
2.0

99.3

4,959

56.2

1 (23)
1 (40)
1 (101)1
1 (124)
13
2
2
1
1
1
25 [309]

97.0

5,089

57.0

1 [64]
36
16
1 [71]
1 [27]
1
11
2
6

100.0
100.0
100.0
99.5
100.0
100.0
100.0
100.0
100.0

649
590
211
325
357
86
148
164
98

7.3
6.7
2.4
3.7
4.0
1.0
1.7
1.9
1.1

1 (64)
35
16
1 (70)
1 (25)
1
12
2
6

100.0
98.6
100.0
99.1
100.0
100.0
100.0
100.0
100.0

657
597
211
330
313
86
146
165
98

7.4
6.7
2.4
3.7
3.5
1.0
1.6
1.9
1.1

1 (Note 6)

100.0

159

1.8

1 (Note 6)

100.0

159

1.8

1 [13]
77 [248]

96.7

133

1.5

86.7

127

1.4

99.7

2,924

33.1

1 (13)
77 [245]

98.8

2,894

32.4

Amex Akasakamon Tower
City House Keyaki Dori
Aqualia Chihaya
D-Wing Tower
Granfore Yakuin Minami
Hotel FORZA Oita
Tissage Hotel Naha

1 [64]
1 [42]
1 [104]
1 [127]
1 [96]
1
1

94.1
100.0
98.9
93.2
97.0
100.0
100.0

98.3
100.0
98.9
99.5
99.0
100.0
100.0

1

100.0

0.7
0.4
0.7
1.3
0.4
0.7
0.5
Undisclosed

1 (66)
1 (42)
1 (104)
1 (136)
1 (98)
1
1

Tosu Logistics Center

66
39
60
112
39
63
43
Undisclosed(Note 7)

100.0

0.7
0.4
0.7
1.3
0.4
0.7
0.5
Undisclosed(Note 7)

1

66
39
60
115
39
63
40
Undisclosed(Note 7)(Note 7)

100.0

Undisclosed

Undisclosed(Note 7)

100.0

Undisclosed(Note 7)

2

Undisclosed(Note 7)(Note 7)

100.0

Undisclosed

Undisclosed

Undisclosed(Note 7)

100.0

Undisclosed(Note 7)1(Note 7)(Note 7)

100.0

Undisclosed

Undisclosed(Note 7)

100.0

Undisclosed(Note 7)

1

Undisclosed(Note 7)(Note 7)

99.8

938

10.5

97.9

8,921

100.0

Retail subtotal:
Canal City Business Center Building
Gofukumachi Business Center
Sanix Hakata Building
Taihaku Street Business Center
Higashi Hie Business Center
Tenjin Nishi-Dori Center Building
Tenjin North Front Building
Higashi Hie Business Center II
Higashi Hie Business Center III
Tenjin Nishi-Dori Business Center(Land with leasehold interest)
Hakata Chikushi-Dori Center Building
Office buildings subtotal:

LOGICITY Minato Kashii
LOGICITY Hisayama

1 [43]
1 [42]
1 [103]
1
1 [124]
13
2
2
1
1
1
25 [333](%) (Note 3)(Note 2)

(Note 2)

2
1

LOGICITY Wakamiya

1(Note 2)

(Note 2)Others subtotal:

12 [440]

99.3

946

10.7

12 [453]

Total

114 [1,021](Note 2)

99.4

8,830

100.0

114 [1,007](Note 2)

(Note 2)FUKUOKA REIT CORPORATION

17(Note 2)

4. Details of renewable energy generation facilities in the portfolio
No relevant items.

5. Details of the rights to operate public facilities, etc. in the portfolio
No relevant items.

Total leasing
Total leasing
Percentage ofPercentage of
Number ofOccupancy
Number ofOccupancy
businessbusiness
total leasing
total leasing
tenants at end rate at end oftenants at end rate at end ofrevenues
revenues
businessbusinessof period
periodof period
periodduring periods
during periods
revenues
revenues(Note 1)

Canal City Hakata
Canal City Hakata·B
Park Place Oita
SunLive City Kokura
Konoha Mall Hashimoto
Square Mall Kagoshima Usuki
Kumamoto Intercommunity SC
Hanahata SC
Kurume Higashi Kushiwara SC
K’s Denki Kagoshima
Marinoa City Fukuoka (Marina Side Building)36th fiscal period(Note 1) “Number of tenants” is based on the total number of sections stipulated in the tenancy agreements for retail and office buildings among relevant properties. For the number of tenants in pass-throughmaster leasing properties, the number of sections stipulated in the tenancy agreements with end tenants is shown in square brackets. The Taihaku Street Business Center is an office building with aresidential tower. Its number of tenants comprises 13 for the office building and 57 for the residence in the 37th fiscal period (13 for the office building and 58 for the residence in the 36th fiscal period).
(Note 2) The total of all the tenants in other than pass-through master leasing properties and the total number of sections stipulated in the tenancy agreements with end tenants for pass-through master leasing
properties is shown in square brackets in the subtotal and total columns for “Number of tenants.”(Note 3) “Occupancy rate” refers to the percentage of leased floor space to leasable floor space and the figures are rounded off to one decimal place.
(Note 4) “Total leasing business revenues” indicates the total of real estate leasing revenues and other revenues from real estate rent in the current fiscal period.
(Note 5) “Percentage of total leasing business revenues” is rounded off to one decimal place, and the total of individual percentages in the above table may not equal 100%.
(Note 6) The number of tenants indicates the number of the lessee of the land with leasehold interest.
(Note 7) The figures are not disclosed as no consent to disclosure has been obtained from the tenants.

6. Securities incorporated in the portfolio
No relevant items.

7. List of specific transaction and forward exchange transaction contract
amount and status of fair value
The following table provides the contract amount of FRC’s specific transactions and the status of its fair value as of February 28, 2023.
Category
Off-market transaction

Contract amount, etc. (mm of yen)
Of which, exceeding 1 year

Type

(Note 1)

Interest rate swap transaction(Receivable floating; Payable fixed)
Total

Fair value(mm of yen) (Note 2)

21,10016,700490

21,10016,700490(Note 1) The contract amount, etc. of the interest rate swap transaction is based on the notional principal amount.
(Note 2) The fair value is calculated by the counterparty of the transaction contract based on the actual interest rate on the market and other factors.

8. Status of other assets
All real estate and real estate trust beneficiary interests owned by FRC have been entered under “3. Details of real estate properties in the portfolio” on page 16. There is no incorporation of other specified assets as of the end of the 37th fiscal period.

9. Status of owned assets by country and region
As of the end of the 37th fiscal period, no overseas real estate properties in countries or regions other than Japan are incorporated into FRC’s portfolio.

Capital Expenditures for Owned Real Estate
1. Planned capital expenditures
The following table provides amounts of major items of capital expenditures associated with currently planned renovations, etc.
for real estate properties owned by FRC as of the date of this Semiannual Report. The planned construction costs indicatedbelow may be partly classified as expenses. In addition, FRC will implement renewal construction work in order to maintain andimprove the competitiveness of properties in the market as well as tenant satisfaction, on top of the construction, facilities andreplacement work for which expenditures will be made regularly.
FUKUOKA REIT CORPORATION

18

II. Semiannual Report

II. Semiannual Report

Capital Expenditures for Owned Real Estate

Expenses and Liabilities
1. Details of expenses related to asset management

Planned construction cost
Real estate property nameLocation

Purpose(mm of yen)

Schedule

Construction
Amountcost
already paid

Total



(thousands of yen)Item

36th fiscal period

37th fiscal period(March 1, 2022 to August 31, 2022)(September 1, 2022 to February 28, 2023)

Replacement of facilities and formation
Hakata Ward, Fukuoka Cityof floor sections
Replacement of lighting equipment at
Hakata Ward, Fukuoka City
parking lots
Replacement of emergency power
Hakata Ward, Fukuoka City
generators

From January 2023 to
May 2023

406

–

–

From May 2023 to July
2023

51

–

–

From July 2022 toApril 2023

50

–

–

Oita City, Oita

Replacement of air-conditioning units

From March 2023 to
May 2023

147

–

–

Replacement of water receiving tanks

From September 2023
to November 2023

99

–

–

From May 2023 toAugust 2023

85

–

–

Taihaku Street BusinessCenterTaihaku Street BusinessCenterTaihaku Street BusinessCenterRenovation of parking lot on the 3rd
floor
Renovation of external walls of the office
Hakata Ward, Fukuoka Citybuilding
Renovation of external walls of the
Hakata Ward, Fukuoka City
residential tower
Replacement of central monitoring
Hakata Ward, Fukuoka City
devices and equipment

From May 2023 toAugust 2023

113

–

–

From October 2023 to
February 2024

2. Status of debt

87

–

–

As of the end of the 37th fiscal period (February 28, 2023), FRC has the following debt from respective financial institutions.

From June 2023 toJanuary 2024

78

–

–

D-Wing Tower

Chuo Ward, Fukuoka City

From September 2023
to February 2024

114

–

2

Canal City Hakata
Canal City Hakata·B
Canal City Hakata·B
Park Place Oita
Park Place Oita

Oita City, Oita

SunLive City Kokura

Kokura Minami Ward,
Kitakyushu City

Granfore Yakuin Minami

Chuo Ward, Fukuoka City

Renovation of external walls
Renovation of external walls

From January 2023 to
May 2023

80–

1

2. Capital expenditures during the 37th fiscal period
Capital expenditures for the real estate properties owned by FRC totaled 385 million yen in the 37th period. Furthermore, FRC
incurred construction costs of 662 million yen in total in the period, including 266 million yen in repair and maintenance expenses classified as expenses on the Statement of Income and 10 million yen in expenses for restoration to former state. The following table provides the overview of major construction work that was completed in the 37th fiscal period.
Real estate property nameLocation

Purpose

PeriodConstruction cost
(mm of yen)

Canal City Hakata

Hakata Ward, Fukuoka City

Replacement of air-conditioning units

From March 2022 to February 2023

78

Park Place Oita

Oita City, Oita

Environmental presentation with illumination for
winterFrom October 2022 to December
2022

14

Park Place Oita

Oita City, Oita

Renovation of restrooms for employees

December 2022

13

Sanix Hakata Building

Hakata Ward, Fukuoka City

Replacement of total heat exchangers

From January 2023 to February 2023

12

Higashi Hie Business Center

Hakata Ward, Fukuoka City

Switching to LED lighting in exclusive areas

From September 2022 to December
2022

57

Higashi Ward, Fukuoka City

Replacement of disaster prevention facilities andequipment

February 2023

21

Aqualia Chihaya

3. Reserves for long-term repair and maintenance plans
FRC has deposited the following amounts from the cash flows generated during the 37th fiscal period in order to fund largescale repair and maintenance work in the medium- to long-term, based on long-term repairs and maintenance plans preparedfor respective properties.
(millions of yen)
Fiscal period
Balance of deposits at beginning of period
Deposits during the period
Amounts used from deposits during the period
Deposits carried forward to the next period

33rd fiscal period

34th fiscal period

35th fiscal period

36th fiscal period

37th fiscal period(September 1, 2020 toFebruary 28, 2021)(March 1, 2021 toAugust 31, 2021)(September 1, 2021 to
February 28, 2022)(March 1, 2022 toAugust 31, 2022)(September 1, 2022 toFebruary 28, 2023)

1,000
–
–
1,000

1,000
–
–
1,000

FUKUOKA REIT CORPORATION

1,000
–
–
1,000

19

1,000
–
–
1,000

1,000
–
–
1,000

(a) Asset management fees (Note)(b) Asset custody fees(c) Administrative service fees(d) Directors’ compensations(e) Other operating expenses
Total

534,574
7,514
60,0876,600
65,669674,446534,370
7,483
57,6483,600
63,584
666,687(Note) Aside from the amounts of the asset management fees shown above, 21,600 thousand yen for asset management, capitalized in the acquisition costs, related to the acquisition of Hakata Chikushi-Dori
Center Building was paid in the 36th fiscal period, and 2,055 thousand yen for asset management related to the disposition of Kurume Higashi Kushiwara SC (15% co-ownership interest) was paid in the
37th fiscal period.

Category

Drawdown
dateLenderBalance as of
September 1,
2022

Balance as ofFebruary 28,
2023

Averageinterest
rate(mm of yen)

(mm of yen)(%) (Note 1)

Repayment
date

Sumitomo Mitsui Trust Bank

July 31, 2015

1,500

1,500

0.564

July 31, 2023

Development Bank of Japan

August 31, 2015

4,000

4,000

0.880

August 31, 2023

Current The Nishi-Nippon City Bank
maturities
of long- The Bank of Fukuoka
term debt
The Nishi-Nippon City Bank

August 31, 2015

400

400

0.870

August 31, 2023

February 29, 2016

–

2,000

0.409

February 29, 2024

February 29, 2016

–

2,000

0.440

February 29, 2024

Mizuho Bank

February 29, 2016

–

500

0.440

February 29, 2024

Subtotal

5,900

10,400

The Bank of Fukuoka

February 29, 2016

2,000

–

0.409

February 29, 2024

The Nishi-Nippon City Bank

February 29, 2016

2,000

–

0.440

February 29, 2024

Development Bank of Japan

February 29, 2016

2,000

2,000

0.620

February 28, 2025

Mizuho Bank

February 29, 2016

500

–

0.440

February 29, 2024

July 29, 2016

700

700

0.400

July 31, 2024

September 30, 2016

300

300

0.408

September 30, 2025

December 30, 2016

1,500
100
100
100
200
100

1,500
100
100
100
200
100

0.718

December 30, 2025

The Bank of Fukuoka

December 30, 2016

1,500

1,500

0.414

December 30, 2026

MUFG Bank

March 31, 2017

800

800

0.481

March 31, 2025

Resona Bank

March 31, 2017

600

600

0.658

March 31, 2027

The Higo Bank

March 31, 2017

300

300

0.481

March 31, 2025

June 30, 2017

1,300
1,000
700
700
700
1,100
500

1,300
1,000
700
700
700
1,100
500

0.777

June 30, 2026

SBI Shinsei Bank (Note 2)
Sumitomo Mitsui Trust Bank
Development Bank of JapanThe Oita Bank
The Kagoshima Bank
The Kitakyushu Bank
Long-term The Juhachi-Shinwa Bank
debt
The Hiroshima Bank

The Bank of Fukuoka
The Nishi-Nippon City BankThe Oita Bank
The Kitakyushu Bank
The Miyazaki BankThe Juhachi-Shinwa BankThe Iyo BankFUKUOKA REIT CORPORATION

20

Repayment
methodLump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity

Lump-sum uponmaturity

Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity

Lump-sum uponmaturity

Use offunds
Refinance fund
Refinance fund
Refinance fund
Refinance fund
Refinance fund
Refinance fund

Refinance fund
Refinance fund
Refinance fund
Refinance fund
Refinance fund
Refinance fund

Refinance fund

Refinance fund
Refinance fund
Refinance fund
Refinance fund

Refinance fundDescription
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee

No collateral/
No guarantee

No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee

No collateral/
No guaranteeII. Semiannual Report

II. Semiannual Report

Expenses and Liabilities
Category
LenderDrawdown
date

Expenses and Liabilities

Balance as of
September 1,
2022

Balance as ofFebruary 28,
2023

Averageinterest
rate(mm of yen)

(mm of yen)(%) (Note 1)

Repayment
date

Development Bank of Japan

June 30, 2017

1,800

1,800

0.650

December 31, 2026

The Bank of Fukuoka

July 31, 2017

2,000

2,000

0.792

July 31, 2027

The Nishi-Nippon City Bank

July 31, 2017

2,000

2,000

0.892

July 31, 2027

The Nishi-Nippon City Bank
The Bank of Fukuoka
The Oita Bank
The Kitakyushu BankThe Juhachi-Shinwa Bank
The Hiroshima Bank

August 31, 2017

500
500
100
100
200
100

500
500
100
100
200
100

0.850

Resona Bank

September 29, 2017

2,000

2,000

0.493

September 30, 2027

The Bank of Fukuoka

December 29, 2017

1,500

1,500

0.812

December 30, 2027

Development Bank of Japan

December 29, 2017

500

500

0.680

December 30, 2027

The Nishi-Nippon City Bank

February 28, 2018

1,900

1,900

0.750

February 29, 2028

Sumitomo Mitsui Trust Bank

February 28, 2018

1,100

1,100

0.600

February 26, 2027

MUFG Bank

February 28, 2018

1,500

1,500

0.500

February 27, 2026

Resona Bank

February 28, 2018

600

600

0.567

February 29, 2028

Development Bank of Japan

March 1, 2018

2,500

2,500

0.720

March 1, 2028

August 31, 2027

MUFG Bank

March 30, 2018

600

600

0.480

March 31, 2026

The Nishi-Nippon City Bank

March 30, 2018

600

600

0.802

March 31, 2028

The Bank of Fukuoka

March 30, 2018

500

500

0.802

March 31, 2028

Mizuho Bank

March 30, 2018

500

500

0.630

March 31, 2028

March 30, 2018

500

500

0.504

March 31, 2025

March 30, 2018

500

500

0.490

March 31, 2027

Sumitomo Mitsui Trust Bank

March 30, 2018

400

400

0.576

March 31, 2027

The Oita Bank

March 30, 2018

400

400

0.646

March 31, 2028

The Hiroshima Bank

March 30, 2018

400

400

0.646

March 31, 2028

SBI Shinsei Bank (Note 2)

March 30, 2018

300

300

0.400

March 31, 2025

Sumitomo Mitsui Banking
Corporation

January 31, 2019

500

500

0.655

January 31, 2029

Long-term Sumitomo Mitsui Banking
Corporation
debt
MUFG BankMUFG Bank

January 31, 2019

500

500

0.590

January 31, 2028

The Nishi-Nippon City Bank

January 31, 2019

400

400

0.412

January 31, 2029

The Bank of Fukuoka

January 31, 2019

300

300

0.412

January 31, 2029

The Oita Bank

February 28, 2019

200

200

0.334

February 27, 2026

The Kagoshima Bank

February 28, 2019

200

200

0.334

February 27, 2026

The Higo Bank

February 28, 2019

200

200

0.334

February 27, 2026

Resona Bank

February 28, 2019

200

200

0.488

February 28, 2029

Mizuho Bank
The Bank of Saga
The Higo Bank

July 31, 2019

1,200
500
500

1,200
500
500

0.521

July 31, 2029

The Norinchukin Bank

July 31, 2019

1,500

1,500

0.303

January 29, 2027

MUFG Bank

September 25, 2019

500

500

0.480

September 29, 2028

The Nishi-Nippon City Bank

February 28, 2020

2,500

2,500

0.480

February 28, 2030

Mizuho Bank

February 28, 2020

1,700

1,700

0.420

February 28, 2030

FUKUOKA REIT CORPORATION

21

Repayment
methodLump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity

Lump-sum uponmaturity

Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity

Use offunds
Refinance fund
Refinance fund
Refinance fund

Refinance fund

Refinance fund
Refinance fund
Refinance fund
Refinance fund
Refinance fund
Refinance fund
Refinance fundAcquisition fund
Refinance fund
Refinance fund
Refinance fund
Refinance fund
Refinance fund
Refinance fund
Refinance fund
Refinance fund
Refinance fund
Refinance fund
Refinance fund
Refinance fund
Refinance fund
Refinance fund
Refinance fund
Refinance fund
Refinance fund
Refinance fund

Refinance fund

Refinance fund
Refinance fund
Refinance fund
Refinance fundCategory
Description
LenderNo collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee

No collateral/
No guarantee

No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee

Drawdown
date

Balance as of
September 1,
2022

Balance as ofFebruary 28,
2023

Averageinterest
rate(mm of yen)

(mm of yen)(%) (Note 1)

Repayment
date

Repayment
methodLump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity

Use offunds

Description
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee

Aozora Bank

June 30, 2020

1,000

1,000

0.569

June 28, 2030

Resona Bank

June 30, 2020

700

700

0.569

June 28, 2030

MUFG Bank

June 30, 2020

500

500

0.600

June 29, 2029

The Kagoshima Bank

June 30, 2020

500

500

0.465

June 30, 2028

Development Bank of Japan

July 31, 2020

1,500

1,500

0.530

July 31, 2030

Mizuho Bank

July 31, 2020

1,000

1,000

0.470

July 31, 2030

The Kitakyushu Bank

July 31, 2020

500

500

0.526

July 31, 2030

The Iyo Bank

July 31, 2020

200

200

0.526

July 31, 2030

Long-term The Juhachi-Shinwa Bank
debt
Mizuho Bank
The Hiroshima Bank
The Kitakyushu BankThe Iyo Bank
The Higo Bank
Mizuho Trust & Banking Co.,
Ltd.
Sumitomo Mitsui Banking
Corporation
Development Bank of JapanThe Nishi-Nippon City Bank
The Bank of Fukuoka
Subtotal
Total

March 31, 2021

1,000

1,000

0.590

March 31, 2031

July 30, 2021

2,300
1,400
800
500
300

2,300
1,400
800
500
300

0.490

July 31, 2031

Lump-sum uponmaturity

Refinance fundNo collateral/
No guarantee

March 31, 2022

1,000

1,000

0.305

March 31, 2032

Lump-sum uponmaturity

Refinance fundNo collateral/
No guarantee

June 30, 2022

1,600

1,600

0.726

June 29, 2029

Lump-sum uponmaturity

Refinance fundNo collateral/
No guarantee

4,000
500
400
73,00078,900

4,000
500
400
68,50078,9000.919

August 31, 2032

Lump-sum uponmaturity

Refinance fundNo collateral/
No guarantee

August 31, 2022

(Note 3)

Refinance fundAcquisition fundAcquisition fundAcquisition fund
Refinance fund
Refinance fund
Refinance fund
Refinance fund
Refinance fund

(Note 1)	The average interest rate is a weighted-average figure during the fiscal period and is rounded to the third decimal place. Furthermore, the average interest rate of debt for which FRC conducted interest
rate swap transactions in order to hedge against interest rate fluctuation risks is the weighted-average figure during the fiscal period taking into consideration the effect of interest rate swaps.
(Note 2) Shinsei Bank, Ltd. changed its trade name to SBI Shinsei Bank, Limited as of January 4, 2023.
(Note 3)	The borrowing is a Sustainability-Linked Loan in which it has been set as a Sustainability Performance Target (SPT) to reduce CO2 emissions (in terms of intensity) by 35% compared with fiscal 2019by February 28, 2031, and the achievement of the target is linked to the loan conditions. When the SPT is achieved, the contract will offer a preferential treatment for the interest rate determined at thetime of borrowing, for the period from August 2031 to the repayment date.

3. Investment corporation bonds
As of the end of the 37th fiscal period (February 28, 2023), FRC has the following investment corporation bonds outstanding.
Issue

Issue date

Balance as of
September 1,
2022

Decreaseduring the
fiscal period

Balance as ofFebruary 28,2023(mm of yen)

(mm of yen)

(mm of yen)(%)

Maturity
date

CouponFirst Series ofUnsecured Bonds

December 30, 2013

2,000

–

2,000

1.32

December 29, 2023

Second Series ofUnsecured Bonds

July 31, 2017

2,000

–

2,000

1.00

July 30, 2032

July 31, 2018

1,000

–

1,000

1.20

July 30, 2038

5,000

–

5,000

Third Series ofUnsecured Bonds
Total

Maturity
methodLump-sum uponmaturity(Note 1)
Lump-sum uponmaturity(Note 1)
Lump-sum uponmaturity(Note 1)

Use
Repayment ofdebt
Repayment ofdebt
Repayment of
debt(Note 1) The bonds may be repurchased and cancelled by FRC at any time on and after the date following the payment date, unless otherwise determined by the book-entry transfer agent.
(Note 2) The bonds are subject to the limited pari passu clause among specified investment corporation bonds.

4. Short-term investment corporation bonds
No relevant items.

5. Subscription rights to shares
No relevant items.
FUKUOKA REIT CORPORATION

22

Description
No collateral/
No guarantee(Note 2)
No collateral/
No guarantee(Note 2)
No collateral/
No guarantee(Note 2)

II. Semiannual Report

II. Semiannual Report

Acquisitions and Sales during the 37th Fiscal Period

Acquisitions and Sales during the 37th Fiscal Period

1. Acquisition and sale of real estate property, asset-backed securities,
infrastructure assets, etc. and infrastructure-related assets, etc.
Acquisition
Property name

Disposition

Acquisition date

Acquisition price

–

–

–

–

Kurume Higashi Kushiwara SC(15% co-ownership interest)
Total

Category(mm of yen)

Disposition date

Disposition price(Note)(mm of yen)February 28,
2023–

Book value

Gain or loss on sale

(mm of yen)

(mm of yen)

411

292

115

411

292

115

(Note) Disposition price is the amount (transaction price indicated in the sales agreement) excluding expenses (transaction brokerage fees, taxes and other public charges, etc.) required for the disposition of therelevant real estate, etc.

2. Acquisition and sale of other assets
No relevant items.

3. Survey on prices of specified assets, etc.
(1) Real estate, etc.
Acquisition or
disposition
Disposition

Property name
Kurume Higashi Kushiwara SC(15% co-ownership interest)

Type of asset

Transaction
dateReal estate in trust

February 28,2023

Acquisition price ordisposition priceReal estateappraisal value(Note 1)(mm of yen)

(Note 2)(mm of yen)

411

Real estateappraiser

411 Tanizawa Sogo
Appraisal Co., Ltd.

(Note 3)

Appraisal
dateAugust 31,
2022(Note 1) Disposition price is the amount (transaction price indicated in the sales agreement) excluding related expenses (transaction brokerage fees, taxes and other public charges, etc.) required for the disposition of the relevant real estate, etc.
(Note 2) The above appraisal was valuated by applying the “Real Estate Appraisal Standards, Chapter 3: Valuation for price of real estate for securitization.”(Note 3) The appraisal value stated above indicates the value equivalent to 15% co-ownership interest that was disposed of the property's appraisal value (2,740 million yen) as of August 31, 2022.

(2) Other
Other than the transaction described in “(1) Real estate, etc.” above, FRC carried out no transaction in the 37th fiscal period thatwas required to have the value, etc. reviewed pursuant to the provisions of Article 201 of the Investment Trusts Act.

4. Transactions with interested parties, etc.
(1) Transaction status

Breakdown of transactions with interested parties, etc.

Total paid fees (A)(thousands of yen)
(Note 1)

Property leasing brokerage fees (Note 2)

64,167

Property management fees (Note 3)

340,885

Outsourcing fees (Note 2) (Note 4)

1,405,860

Other operating expenses (Note 2)

1,496,989

Paid amount (B)Paid party(thousands of yen)

Fukuoka Jisho Co., Ltd.
FJ. Entertainment Works Ltd.
Fukuoka Jisho Co., Ltd.
FJ. Entertainment Works Ltd.
Fukuoka Jisho Co., Ltd.
FJ. Entertainment Works Ltd.
Sunlife Co., Ltd.
Fukuoka Jisho Co., Ltd.
FJ. Entertainment Works Ltd.
Sunlife Co., Ltd.

Percentage of total
amount(B) / (A)(%)

47,142
12,02074,356257,198
527,448
727,101
131,849
211,585
342,742
2,439

73.5
18.7
21.8
75.5
37.5
51.7
9.4
14.1
22.9
0.2

(Note 1) Aside from the paid fees shown above, FRC paid the following amounts for repairs, etc. that were ordered to interested parties, etc. during the 37th fiscal period. The amounts include construction work
fees paid to third parties through interested parties, etc.
Fukuoka Jisho Co., Ltd.
95,796 thousand yen
FJ. Entertainment Works Ltd. 334,080 thousand yen
Sunlife Co., Ltd.
169,517 thousand yen(Note 2) The property leasing brokerage fees, outsourcing fees and other operating expenses include property leasing brokerage fees, etc. paid to third parties through interested parties, etc.
(Note 3) The property management fees do not include the following construction supervision fees. In addition, of the fees below, the construction supervision fees paid upon acquiring real estate are includedin the acquisition cost of the relevant real estate.
Fukuoka Jisho Co., Ltd.
8,722 thousand yen
FJ. Entertainment Works Ltd.
14,959 thousand yen(Note 4) The outsourcing fees shown above are paid fees, etc. regarding building management outsourcing fees, and do not coincide with the outsourcing fees described in VIII. Notes to Financial Statements(Notes to statement of income) that include property management fees and others.

5. Transactions with the asset management company regarding
concurrent work conducted by the asset management company
The asset management company (Fukuoka Realty Co., Ltd.) concurrently conducts investment advisory and agency business,but has no such transactions with FRC. The company does not concurrently conduct any class 1 financial instruments transaction business, class 2 financial instruments transaction business, land and building transaction business or real estate syndication business, and has no such transactions with FRC.

Overview of Accounting
1. Assets, liabilities, principal and profits/loss

No relevant items.

(2) Amount of fees paid, etc.
FRC paid the following fees to the interested parties, etc. during the 37th fiscal period. Furthermore, interested parties, etc. referto the interested parties of the asset management company who have concluded an asset management agreement with FRC
and are designated in Article 123 of the Enforcement Order of the Investment Trusts Act. Of these interested parties, etc., thebelow table indicates the business partners to which FRC paid fees, etc. during the 37th fiscal period.

Please refer to the IV. Balance Sheet, V. Statement of Income, VI. Statement of Changes in Net Assets, VII. Statement of CashDistributions, VIII. Cash Flow Statement, IX. Notes to Financial Statements and X. Supplementary Schedules on later pages ofthis report.

2. Changes in calculation method of depreciation
No relevant items.

3. Changes in valuation method of real estate and infrastructure assets,
etc.
No relevant items.

4. Overview of self-managed investment trust beneficiary certificatesNo relevant items.
FUKUOKA REIT CORPORATION23FUKUOKA REIT CORPORATION

24

II. Semiannual Report

III. Independent Auditor's Report

Overview of Accounting
5. Disclosure on corporation owning foreign real estate
No relevant items.

6. Disclosure on real estate owned by corporation owning foreign realestateNo relevant items.

Independent Auditor’s Report
To the Board of Directors of Fukuoka REIT Corporation

Other

Opinion

1. Handling of fractions of monetary amounts and percentage figures
Unless otherwise stated, the figures less than the specified unit are rounded down for monetary amounts and rounded off to one
decimal place for percentage figures throughout this Semiannual Report.

We have audited the financial statements of Fukuoka REIT Corporation (the Company), which
comprise the balance sheet as of February 28, 2023, and the statement of income, statement ofchanges in net assets, statement of cash distributions and cash flow statement for the six months
period then ended, notes to financial statements and supplementary schedules.
In our opinion, the accompanying financial statements present fairly, in all material respects, thefinancial position of the Company as of February 28, 2023, and its financial performance and its cash
flows for the six months period then ended in accordance with accounting principles generally
accepted in Japan.
Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan. Our
responsibilities under those standards are further described in the Auditor’s Responsibilities for the
Audit of the Financial Statements section of our report. We are independent of the Company inaccordance with the ethical requirements that are relevant to our audit of the financial statements inJapan, and we have fulfilled our other ethical responsibilities in accordance with these requirements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis forour opinion.
Other Information
The other information comprises the information included in the semiannual report, but does notinclude the financial statements and our auditor’s report thereon. Management is responsible for theother information. In addition, those charged with governance are responsible for overseeing
the Company’s reporting process of the other information.
Our opinion on the financial statements does not cover the other information and we do not express
any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the otherinformation and, in doing so, consider whether the other information is materially inconsistent withthe financial statements or our knowledge obtained in the audit or otherwise appears to be materially
misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of thisother information, we are required to report that fact.
We have nothing to report in this regard.

PricewaterhouseCoopers Aarata LLC
Otemachi Park Building, 1-1-1 Otemachi, Chiyoda-ku, Tokyo 100-0004, Japan
T: +81 (3) 6212 6800, F: +81 (3) 6212 6801, www.pwc.com/jp/assurance

FUKUOKA REIT CORPORATION25FUKUOKA REIT CORPORATION

26

III. Independent Auditor's Report

III. Independent Auditor's Report

Responsibilities of Management and Those Charged with Governance for the Financial
Statements
Management is responsible for the preparation and fair presentation of the financial statements inaccordance with accounting principles generally accepted in Japan, and for such internal control as
management determines is necessary to enable the preparation of financial statements that are freefrom material misstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the Company’s ability
to continue as a going concern and disclosing, as applicable, matters related to going concern.
Those charged with governance are responsible for overseeing the Company’s financial reporting
process.

We communicate with management regarding, among other matters, the planned scope and timing of
the audit and significant audit findings, including any significant deficiencies in internal control that
we identify during our audit.
We also provide management with a statement that we have complied with relevant ethicalrequirements regarding independence, and to communicate with them all relationships and othermatters that may reasonably be thought to bear on our independence, and where applicable, related
safeguards.
Interest required to be disclosed by the Certified Public Accountants Act of Japan
Our firm and its designated engagement partners do not have any interest in the Company which is
required to be disclosed pursuant to the provisions of the Certified Public Accountants Act of Japan.

Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole
are free from material misstatement, whether due to fraud or error, and to issue an auditor’s reportthat includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that
an audit conducted in accordance with auditing standards generally accepted in Japan will always
detect a material misstatement when it exists. Misstatements can arise from fraud or error and areconsidered material if, individually or in the aggregate, they could reasonably be expected to influence
the economic decisions of users taken on the basis of these financial statements.

自動署名EL

自動署名Co1

Takeshi Yamaguchi

Takashi Sato

Designated Engagement Partner
Certified Public Accountant

Designated Engagement Partner
Certified Public Accountant

May 22, 2023

As part of an audit in accordance with auditing standards generally accepted in Japan, we exercise
professional judgment and maintain professional skepticism throughout the audit. We also: Identify and assess the risks of material misstatement of the financial statements, whether due tofraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of notdetecting a material misstatement resulting from fraud is higher than for one resulting from error,
as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the overrideof internal control.
 Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, while the purpose of the financial statement
audit is not to express an opinion on the effectiveness of the Company’s internal control.
 Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
 Conclude on the appropriateness of management’s use of the going concern basis of accounting and,based on the audit evidence obtained, whether a material uncertainty exists related to events orconditions that may cast significant doubt on the Company’s ability to continue as a going concern.
If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’sreport to the related disclosures in the financial statements or, if such disclosures are inadequate, tomodify our opinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor’s report. However, future events or conditions may cause the Company to cease to continue
as a going concern.
 Evaluate whether the presentation and disclosures of the financial statements are in accordancewith accounting principles generally accepted in Japan, the overall presentation, structure andcontent of the financial statements, including the disclosures, and whether the financial statements
represent the underlying transactions and events in a manner that achieves fair presentation.

2 of 33 of 3FUKUOKA REIT CORPORATION27

FUKUOKA REIT CORPORATION

28

IV. Balance Sheet

IV. Balance Sheet(thousands of yen)

AssetsCurrent assets
Cash and deposits
Cash and deposits in trust
Operating accounts receivable
Prepaid expenses
Consumption taxes receivable
OthersTotal current assets
Non-current assets
Property, plant and equipment
Buildings
Accumulated depreciation
Buildings, net
Structures
Accumulated depreciation
Structures, net
Tools and fixtures
Accumulated depreciation
Tools and fixtures, net
Lands
Buildings in trust
Accumulated depreciation
Buildings in trust, net
Structures in trust
Accumulated depreciation
Structures in trust, net
Machinery and equipment in trust
Accumulated depreciation
Machinery and equipment in trust, net
Vehicles and transport equipment in trust
Accumulated depreciation
Vehicles and transport equipment in trust, net
Tools and fixtures in trust
Accumulated depreciation
Tools and fixtures in trust, net
Lands in trust
Construction in progress in trust
Total property, plant and equipment
Intangible assets
Leasehold right in trust
Other intangible assets in trust
Total intangible assets
Investment and other assets
Deferred tax assets
Lease and guarantee deposits
Lease and guarantee deposits in trust
Long-term prepaid expenses
Total investment and other assets
Total non-current assets
Deferred assets
Investment corporation bond issuance expenses
Total deferred assets
Total assets

(thousands of yen)

36th fiscal period

37th fiscal period

36th fiscal period

37th fiscal period(as of August 31, 2022)(as of February 28, 2023)(as of August 31, 2022)(as of February 28, 2023)

Liabilities
4,203,346
4,335,931
788,376
227,634
124,948
10,2239,690,462

6,069,891
4,236,159
738,177
270,539–
16,961
11,331,729

Current liabilities
Operating accounts payable
Current maturities of investment corporation bonds
Current maturities of long-term debt

*1

*1

FUKUOKA REIT CORPORATION*1*11,181,091(68,543)
1,112,547
20,698(903)
19,795
1,571
(547)
1,023
989,124
104,967,252(39,379,429)
65,587,822
1,974,987(931,405)
1,043,582
1,490,515(781,851)
708,664
626
(594)
31
1,489,296(1,257,920)
231,375
113,501,599
8,217
183,203,784

5,545,883
8,315
5,554,198

5,545,883
5,421
5,551,305

13
10,000327,135
997,950
1,335,099
191,506,725

19
10,000327,135
994,175
1,331,330
190,086,419

26,664
26,664201,223,852

24,676
24,676
201,442,825

29

662,491–

2,000,000

5,900,000

10,400,000

Accounts payable-other

16,27521,315

Accrued expenses

421,792

422,685

962

1,079

Income taxes payable
Accrued consumption taxes

1,171,821(53,781)
1,118,039
20,698(709)
19,988
1,571
(430)
1,140
989,124
104,797,631(38,070,850)
66,726,781
1,976,251(907,404)
1,068,847
1,483,511(745,401)
738,110
626
(594)
31
1,473,642(1,241,477)
232,165
113,715,265
7,932
184,617,427

661,770–

366,970

Advances received

1,084,850

1,068,121

Deposits received

1,026,223

924,435

Total current liabilities

9,111,875

15,867,098

Non-current liabilities
Investment corporation bonds

5,000,000

3,000,000

Long-term debt

73,000,000

68,500,000

Tenant leasehold and security deposits
Tenant leasehold and security deposits received in trust

741,017*1

Total non-current liabilities

11,627,634

758,476*1

11,528,307

90,368,652

83,786,783

99,480,527

99,653,881

98,938,764

98,938,764

Unappropriated surplus

2,804,559

2,850,179

Total surplus

2,804,559

2,850,179

Total liabilities
Net assets
Unitholders’ equity
Unitholders’ capital
Surplus

Total unitholders’ equity
Total net assets

101,743,324*3Total liabilities and net assets

101,743,324
201,223,852

FUKUOKA REIT CORPORATION

30

101,788,943*3

101,788,943
201,442,825

V. Statement of Income

VI. Statement of Changes in Net Assets

(thousands of yen)

36th fiscal period (March 1, 2022 to August 31, 2022)

36th fiscal period

37th fiscal period(March 1, 2022 to August 31, 2022)(September 1, 2022 to February 28, 2023)

(thousands of yen)

Operating revenues
Leasing revenues – real estate*18,160,720*18,233,996

Other leasing revenues – real estate*1669,929*1

687,929–*2

115,438

Gain on sales of real estate
Total operating revenues

8,830,650

Unitholders’ Equity
Unitholders’ capital
Balance as of March 1, 2022

9,037,365

Unappropriated surplus

Total unitholders’ equity

Total net assets

2,814,821

101,753,586

101,753,586

Dividend of surplus(2,814,656)(2,814,656)(2,814,656)

Profit2,804,394

2,804,394

2,804,394

Changes in the current fiscal period

Operating expenses
Expenses related to leasing business

98,938,764

Surplus*1 *3

4,974,312

Asset management fees

534,574*1 *3

5,147,017
534,370

Asset custody fees

7,514

7,483

Total of changes in the current fiscal period

Administrative service fees

60,08757,648

Balance as of August 31, 2022

Director’s compensations

6,600

3,600

Other operating expenses

65,66963,584

Total operating expenses

5,648,758

5,813,704

3,181,891

3,223,660

40

44

Others

1,191

991

Total non-operating revenues

1,231

1,035

Interest expenses

249,567

245,360

Interest expenses on investment corporation bonds

29,20029,200

Amortization of investment corporation bond issuance
expenses

1,172

1,988

Financing related expenses

97,744

97,1033737377,722373,688

Ordinary income

2,805,401

2,851,007Profit before income taxes

2,805,401

2,851,007

968

1,085

Operating income
Non-operating revenues–(10,261)(10,261)(10,261)

98,938,764

2,804,559

101,743,324

101,743,324

37th fiscal period (September 1, 2022 to February 28, 2023)
Interest received

Non-operating expenses

OthersTotal non-operating expenses

Income taxes-current
Income taxes-deferred

38

(5)

Total income taxes

1,007

1,080

Profit2,804,394

2,849,927

Surplus brought forward

165

251

Unappropriated surplus

2,804,559

2,850,179

FUKUOKA REIT CORPORATION

31(thousands of yen)
Unitholders’ Equity
Unitholders’ capital
Balance as of September 1, 2022

98,938,764

Surplus
Unappropriated surplus

Total unitholders’ equity

Total net assets

2,804,559

101,743,324

101,743,324

Dividend of surplus(2,804,308)(2,804,308)(2,804,308)

Profit2,849,927

2,849,927

2,849,927

Changes in the current fiscal period

Total of changes in the current fiscal period
Balance as of February 28, 2023–

45,61945,61945,61998,938,764

2,850,179

101,788,943

101,788,943

FUKUOKA REIT CORPORATION

32

VII. Statement of Cash Distributions


VIII. Cash Flow Statement(thousands of yen)

Item



(thousands of yen)

36th fiscal period

37th fiscal period

36th fiscal period

37th fiscal period(March 1, 2022 to August 31, 2022)(September 1, 2022 to February 28, 2023)(March 1, 2022 to August 31, 2022)(September 1, 2022 to February 28, 2023)

I. Unappropriated surplus

2,804,559

2,850,179

II. Total dividend[Dividend per investment unit]
III. Surplus brought forward

2,804,308[3,523 yen]251

2,849,680[3,580 yen]
499

Method for calculating dividends

The amount of dividends shall be decided in accordancewith the dividend policy stipulated in Article 38-1-2 of
FRC’s Articles of Incorporation and must exceed 90% of
FRC’s distributable profits as stipulated in Article 67-15-1of the Special Taxation Measures Act.
Following the above policy, FRC shall decide to distribute
2,804,308 thousand yen, which is almost the entire
amount of unappropriated surplus, as earnings dividends.
Moreover, dividend in excess of earnings as stipulated in
Article 38-2 of FRC’s Articles of Incorporation will not beprovided.

The amount of dividends shall be decided in accordancewith the dividend policy stipulated in Article 38-1-2 of
FRC’s Articles of Incorporation and must exceed 90% of
FRC’s distributable profits as stipulated in Article 67-15-1of the Special Taxation Measures Act.
Following the above policy, FRC shall decide to distribute
2,849,680 thousand yen, which is almost the entire
amount of unappropriated surplus, as earnings dividends.
Moreover, dividend in excess of earnings as stipulated in
Article 38-2 of FRC’s Articles of Incorporation will not beprovided.

(Note) Amounts other than the amounts of dividend per investment unit are rounded down to the nearest thousand yen.

Net cash provided by (used in) operating activities
Profit before income taxes

2,805,401

2,851,007Depreciation and amortization expenses

1,514,524

1,499,723

1,172

1,988

Amortization of investment corporation bond issuance expenses
Interest received

(40)

(44)

Interest expenses

278,767

274,560–(115,438)

Gain on sales of real estate
Decrease (increase) in operating accounts receivables(176,146)

50,19992,727

124,948

Increase (decrease) in accrued consumption taxes–

366,970

Increase (decrease) in operating accounts payable

73,78459,030

Increase (decrease) in accounts payable-other(6,115)

4,919

Decrease (increase) in consumption taxes refund receivable

Increase (decrease) in accrued expenses

4,057

3,459

Increase (decrease) in advances received

77,805(16,729)

Increase (decrease) in deposits expenses

329,077(101,788)

Decrease (increase) in prepaid expenses

26,658(42,905)

Decrease (increase) in long-term prepaid expenses(32,961)

3,774

Others, net

1,417

2,479

Subtotal

4,990,132

4,966,156

Interest income received
Interest expenses paid
Income taxes paid
Net cash provided by (used in) operating activities

40

44(275,746)(277,126)(1,665)(969)

4,712,760

4,688,104

Net cash provided by (used in) investment activities
Purchase of property, plant and equipment

(493)

–

–

407,974

Purchase of property, plant and equipment in trust(5,911,512)(443,750)

Proceeds from tenant leasehold and security deposits

290,149

142,690

Repayments of tenant leasehold and security deposits(90)(125,232)

Proceeds from sale of property, plant and equipment in trust

Proceeds from tenant leasehold and security deposits in trust

309,878

55,365

Repayments of tenant leasehold and security deposits in trust(183,714)(154,691)

3,634

6,387

Proceeds from restricted trust deposits
Payments for restricted trust deposits(6,099)(6,347)(5,498,246)(117,604)

Proceeds from short-term debt

4,000,000–

Repayments of short-term debt

(4,000,000)–

Proceeds from long-term debt

7,500,000–

Repayments of long-term debt

(6,000,000)–

Dividends paid

(2,814,517)(2,803,686)(1,314,517)(2,803,686)

Net cash provided by (used in) investment activities
Net cash provided by (used in) financial activities

Net cash provided by (used in) financial activities
Net increase (decrease) in cash and cash equivalents(2,100,003)

1,766,813

Balance of cash and cash equivalents at beginning of period

10,588,484

8,488,481

Balance of cash and cash equivalents at end of period

FUKUOKA REIT CORPORATION

33

8,488,481*1

FUKUOKA REIT CORPORATION

34*1

10,255,294

IX. Notes to Financial Statements

IX. Notes to Financial Statements(Basis of presentation)
The financial statements of FRC, which is incorporated in Japan, have been prepared in accordance with the provisions set forthin the Financial Instruments and Exchange Act of Japan and related regulations and accounting principles generally accepted inJapan, which are different in certain respects to the application and disclosure requirements of International Financial ReportingStandards (“IFRS Standards”).
The accompanying financial statements have been translated into English, for the convenience of readers outside Japan, fromthe audited financial statements that were prepared for Japanese domestic purposes from the accounts and records maintainedby FRC and were filed with the Kanto Local Finance Bureau of the Ministry of Finance as required by the said Act.

5. Scope of funds (cash and cash equivalents) in cash flow The funds (cash and cash equivalents) in the cash flow statement consist of cash on hand and cash in trust;statement
deposits that can be withdrawn at any time and deposits in trust; and short-term investments with a maturityof 3 months or less from the date of acquisition, which are readily convertible to cash and bear only an insignificant risk of value fluctuation.
6. Other significant items fundamental to preparing thefinancial statements(Significant accounting policies)
1. Depreciation method for non-current assets

2. Accounting for deferred assets

3. Standards for recognition of revenues and expenses

4. Method of hedge accounting(1) Property, plant and equipment
Depreciation is calculated using the straight-line method.
The useful lives of major categories of property, plant and equipment including trust assets are as follows:		 Buildings:
10 – 65 years
		 Structures:
15 – 60 years
		 Machinery and equipment:
15 – 30 years
		 Vehicles and transport equipment:
7 years
		 Tools and fixtures:
5 – 20 years(2) Intangible assets
Intangible assets are amortized utilizing the straight-line method.
(3) Long-term prepaid expenses
Long-term prepaid expenses are amortized utilizing the straight-line method.
Investment corporation bond issuance expenses
Investment corporation bond issuance expenses are amortized utilizing the straight-line method over theperiod through redemption.
(1) Standards for revenue recognition
The details of main performance obligations concerning revenues generated from contracts between FRC
and its customers and the ordinary time to fulfil said performance obligations (ordinary time to recognize
revenues) are as follows:➀ Sales of real estate property
		FRC recognizes revenues from sales of real estate property when the purchaser, who is a customer,
obtains control of the relevant real estate property as a result of FRC fulfilling its delivery obligations
stipulated in the transaction agreement of the real estate property.
➁	Utilities income
		FRC recognizes utilities income in accordance with the supply of electricity and water, etc. to the lessee, who is a customer, based on the lease agreement of real estate, etc. and details of agreements
incidental to it. Of the utilities income, in the case that FRC deems itself to be an agent, the net amountobtained by deducting the amount it pays to other parties from the amount it receives as charges forelectricity and gas, etc. supplied by the said other parties is recognized as revenue.
(2) Accounting treatment of property taxes, etc.
In connection with property taxes, city planning taxes and depreciated asset taxes, FRC uses the methodof charging the corresponding amounts of assessed taxes to the current fiscal period as expenses related
to leasing business.
The amount equivalent to property taxes, etc. for the initial fiscal year paid to the seller as settlementmoney upon acquisition of real estate or trust beneficiary interests in real estate as entrusted property is
not expensed but capitalized as part of the acquisition cost of the relevant property.
The amount equivalent to property taxes, etc. capitalized in the acquisition cost of real estate, etc. was23,928 thousand yen for the 36th fiscal period. No amount equivalent to property taxes, etc. was capitalized in the acquisition cost of real estate, etc. for the 37th fiscal period.
(1) Method of hedge accounting
Deferred hedge accounting is applied for interest rate swap transactions. However, special accounting isapplied for interest rate swap transactions that satisfy the requirements for special accounting.
(2) Hedging instruments and hedged items
Hedging instrument: interest rate swap transactions
Hedged items: interest rates of borrowings(3) Hedging policy
FRC conducts derivative transactions to hedge interest rate fluctuation risks for floating-rate borrowings
based on FRC’s Articles of Incorporation.
(4) Method for assessing the effectiveness of hedging
Assessment of the effectiveness of hedging is omitted as requirements are satisfied for special accounting for interest rate swap transactions.

FUKUOKA REIT CORPORATION

35

Accounting methods for trust beneficiary interests in real estate as entrusted property
Regarding trust beneficiary interests in owned real estate as entrusted property, all asset and liability
accounts of the entrusted properties as well as all revenue and expense accounts generated by the entrusted properties are recorded in relevant accounts on the balance sheet and statement of income.
Furthermore, the following material accounts are separately stated on the balance sheet for entrusted
properties recorded in relevant accounts.
➀ Cash and deposits in trust➁	Buildings in trust, structures in trust, machinery and equipment in trust, vehicles and transport equipment in trust, tools and fixtures in trust, lands in trust and construction in progress in trust➂ Leasehold right in trust➃ Other intangible assets in trust➄ Lease and guarantee deposits in trust➅ Tenant leasehold and security deposits received in trust(Notes to balance sheet)*1. Assets pledged as collateral and secured liabilities
Assets pledged as collateral are as follows:	(thousands of yen)

Buildings in trust
Lands in trust

36th fiscal period

37th fiscal period

as of August 31, 2022

as of February 28, 2023

6,273,659
16,101,020
22,374,680

Total
Secured liabilities are as follows:	

6,127,213
16,101,020
22,228,234(thousands of yen)
36th fiscal period

37th fiscal period

as of August 31, 2022

as of February 28, 2023

Tenant leasehold and security deposits received in trust

821,462

821,462

2. Balance of unused committed line of credit
FRC has executed committed line of credit agreements with its banks primarily to conduct efficient and dynamic cash management.
[Committed line of credit agreement 1]
	(thousands of yen)

Credit limit
Outstanding debt at end of period
Unused committed line of credit at end of period

36th fiscal period

37th fiscal period

as of August 31, 2022

as of February 28, 2023

6,000,000–
6,000,000[Committed line of credit agreement 2]
	(thousands of yen)

Credit limit
Outstanding debt at end of period
Unused committed line of credit at end of period

36th fiscal period

37th fiscal period

as of August 31, 2022

as of February 28, 2023

7,000,000–
7,000,000*3. Minimum net assets designated in Article 67- 4 in the Act on Investment Trusts and Investment Corporations.
	(thousands of yen)
36th fiscal period

37th fiscal period

as of August 31, 2022

as of February 28, 2023

50,0006,000,000–
6,000,000

50,000FUKUOKA REIT CORPORATION

36

7,000,000–
7,000,000

IX. Notes to Financial Statements

IX. Notes to Financial Statements(Notes to statement of income)(Notes to cash flow statement)*1. Breakdown of revenues and expenses related to real estate leasing business.


A. Real estate leasing business revenues
Leasing revenues - real estate		Rents
		 Common charges
		 Parking revenues
Other leasing revenues - real estate		 Incidental income
		 Other miscellaneous income
Total real estate leasing business revenues
B. Expenses related to real estate leasing business
Expenses related to leasing business		 Outsourcing fees		 Repair and maintenance expenses
		 Taxes and other public charges
		 Insurance premiums and trust compensation
		 Utilities expenses
		 Depreciation and amortization expenses
		 Other expenses related to real estate leasing businessTotal expenses related to real estate leasing business
C. Revenues and expenses related to real estate leasing business (A - B)(thousands of yen)
36th fiscal period

37th fiscal period

36th fiscal period

37th fiscal period(March 1, 2022 to August 31, 2022)(September 1, 2022 to February 28, 2023)(March 1, 2022 to August 31, 2022)(September 1, 2022 to February 28, 2023)

6,784,821
934,731441,168

8,160,720

649,178
20,750669,9298,830,650

1,740,908
119,524
719,695
42,669544,853
1,514,524
292,136

4,974,312
4,974,312
3,856,337

6,864,849
917,441
451,706
650,853
37,076

1,746,745
266,909719,446
41,241
579,433
1,499,723
293,516

Cash and deposits
Cash and deposits in trust
Restricted trust deposits (Note)
Cash and cash equivalents
8,233,996

687,929
8,921,926

5,147,017
5,147,017
3,774,909

Not applicable.

37th fiscal period (September 1, 2022 to February 28, 2023)
Kurume Higashi Kushiwara SC (15% co-ownership interest)(thousands of yen)
411,000
292,535
3,025
115,438*3. Transactions with affiliated companies.
	(thousands of yen)
36th fiscal period

37th fiscal period(March 1, 2022 to August 31, 2022)(September 1, 2022 to February 28, 2023)

Expenses related to real estate leasing business

839,311

909,403(Notes to statement of changes in net assets)
36th fiscal period

37th fiscal period(March 1, 2022 to August 31, 2022)(September 1, 2022 to February 28, 2023)

10,000,000 units
796,000 units

10,000,000 units
796,000 units

FUKUOKA REIT CORPORATION

37

6,069,891
4,236,159(50,756)
10,255,294(Note) Restricted trust deposits are trust deposits reserved for refunding tenant leasehold and security deposits deposited by tenants and for other purposes.

(Notes to leases)
The future lease revenues under the non-cancellable operating leases [as lessor] are as follows:
	

Total

36th fiscal period (March 1, 2022 to August 31, 2022)

Proceeds from sales of real estate property
Costs of sale of real estate property
Other selling expenses
Gain on sales of real estate property

4,203,346
4,335,931(50,796)
8,488,481

Due within 1 year
Due after 1 year

*2. Breakdown of gain on sales of real estate property

Total number of authorized investment units and total number ofinvestment units outstanding
Total number of authorized investment units
Total number of investment units outstanding*1. Relationship between the balance of cash and cash equivalents at end of period and the amounts of the corresponding accounts on the balance sheet.
	(thousands of yen)(thousands of yen)

36th fiscal period

37th fiscal period(as of August 31, 2022)(as of February 28, 2023)

5,541,544
9,559,355
15,100,900

5,206,673
9,705,034
14,911,708(Notes to financial instruments)
1. Matters concerning status of financial instruments(1) Policy on handling financial instruments
In order to secure stable earnings and steady growth of assets under management, FRC procures funds primarily throughborrowings from financial institutions, issuance of investment corporation bonds or issuance of investment units for property
acquisitions, repair and maintenance work, repayment of interest-bearing debt and other purposes.
In procuring interest-bearing debt, FRC borrows funds primarily in long-term, fixed interest debt based on the policy of
establishing a solid financial structure, and conducts conservative operations intended to secure financial stability and liquidity by dispersing debt payment dates and utilizing committed lines of credit and through other measures.
With regard to surplus funds, FRC manages them as various deposits and savings, etc. to support efficient management
while considering security.
FRC conducts derivative transactions only for the purpose of hedging the risk of future interest rate fluctuation, and not forthe purpose of speculation.
(2) Description of financial instruments and associated risks, and risk management structure
Debt and investment corporation bonds are funds procured primarily for acquiring real estate trust beneficiary interests andrefinancing of borrowings. Borrowings and investment corporation bonds are exposed to liquidity risks upon debt payment
dates, but FRC works to mitigate these risks by such measures as appropriately controlling the ratio of interest-bearing debt
to total assets and executing commitment line agreements with local financial institutions that are lenders to secure on-handliquidity.
In addition, borrowings with floating interest rates are exposed to interest rate fluctuation risks. However, FRC works to
reduce the risks by such measures as adjusting the ratio of the balance of borrowings with floating interest rates to totalborrowings in accordance with the financial environment and other factors. FRC conducts derivative transactions (specifically interest rate swap transactions) for part of its borrowings with floating interest rates in order to hedge the risk of futurefluctuations in the rates of interest payable. Furthermore, assessment of the effectiveness of these interest rate swaps isomitted as it has been determined that they have met the requirements for special accounting. FRC executes and manages
its derivative transactions in accordance with its financial derivative transaction management policies and, it does so only withfinancial institutions it determines to have a certain level of creditworthiness, by reference to their credit ratings, to reducecounterparty risks.
FRC manages surplus funds in large time deposits. Such deposits are subject to the risks of failure of the financial institutions
holding the deposits as well as other credit risks. FRC mitigates the risks by limiting its deposits to financial institutions with acertain level of creditworthiness, by reference to their credit ratings, as well as by setting short durations for these deposits.
Tenant leasehold and security deposits and tenant leasehold and security deposits received in trust are deposits fromtenants and are exposed to liquidity risks if tenants move out before the contracts expire. FRC mitigates this risk by suchmeasures as securing on-hand liquidity.
FUKUOKA REIT CORPORATION38

IX. Notes to Financial Statements

IX. Notes to Financial Statements(3) Supplementary explanation on matters concerning fair value of financial instruments
Certain assumptions are made in calculating the fair value of financial instruments, and there may be cases where the values
will vary when different assumptions are used.
As for the contract value and other conditions of derivative transactions indicated in “2. Matters concerning fair value offinancial instruments,” the contract value is not an indicator of the market risks related to such transactions.

2. Matters concerning fair value of financial instruments
The following table includes the book values for financial instruments as recorded on the balance sheet, the corresponding fairvalues and the difference between these amounts as of August 31, 2022. Furthermore, notes to Cash and deposits and Cashand deposits in trust are omitted as these are settled with cash and within a short period of time, and thus the fair value is approximately the same as the book value.
(thousands of yen)Book value recorded on thebalance sheet–
5,900,000
5,000,000
73,000,000
741,017
11,627,634
96,268,652––(1) Current maturities of investment corporation bonds(2) Current maturities of long-term debt
(3) Investment corporation bonds(4) Long-term debt
(5) Tenant leasehold and security deposits(6) Tenant leasehold and security deposits received in trust
Total of liabilities(7) Derivative transactions
Total of derivative transactions

Fair value

Difference(Note 1)–
5,917,469
5,047,370
72,556,892
464,967
9,527,497
93,514,198–––
17,46947,370(443,107)(276,050)(2,100,136)(2,754,453)––

The following table includes the book values for financial instruments as recorded on the balance sheet, the corresponding fairvalues and the difference between these amounts as of February 28, 2023. Furthermore, notes to Cash and deposits and Cashand deposits in trust are omitted as these are settled with cash and within a short period of time, and thus the fair value is approximately the same as the book value.
(thousands of yen)Book value recorded on thebalance sheet
2,000,000
10,400,000
3,000,000
68,500,000
758,476
11,528,307
96,186,783––(1) Current maturities of investment corporation bonds(2) Current maturities of long-term debt
(3) Investment corporation bonds(4) Long-term debt
(5) Tenant leasehold and security deposits(6) Tenant leasehold and security deposits received in trust
Total of liabilities(7) Derivative transactions
Total of derivative transactions

Fair value

Difference(Note 1)

2,014,303
10,400,852
2,875,722
66,781,395
447,439
9,065,621
91,585,334––

14,303852(124,277)(1,718,604)(311,036)(2,462,685)(4,601,448)––(Note 1) Calculation method for fair value of financial instruments(1) Current maturities of investment corporation bonds, (2) Current maturities of long-term debt, (3) investment corporation bonds and (4) Long-term debt
		The fair value of long-term debt with fixed interest rates (including debt with practical fixed interest rates through interest rate swaps) and investment corporation bonds (the “debt, etc.”) is calculatedby discounting the total amount of principal and interest by the rate assumed as being applicable in the event of a new drawdown of similar debt, etc.
		The fair value of long-term debt with floating interest rates is based on the book value, as the contract terms require the interest rates to be revised in a certain period of time (within six months) andthus is considered to be nearly equal to the book value.
(5) Tenant leasehold and security deposits and (6) Tenant leasehold and security deposits received in trust		The fair value of tenant leasehold and security deposits and tenant leasehold and security deposits received in trust is calculated by using the present value, which is obtained by discounting thefuture cash flows of such deposits by a rate that takes into account the term remaining until the reimbursement deadline and credit risks.
(7) Derivative transactions
		 Please refer to (Notes to derivative transactions).
(Note 2) Amount of repayment of long-term debt and investment corporation bonds scheduled to be due after closing of accounts (as of August 31, 2022)

	Long-term debt
Investment corporation
bonds(thousands of yen)Due in 1 year or less
5,900,000

1 to 2 years
5,200,000

2 to 3 years
3,900,000

3 to 4 years
11,100,000

4 to 5 years
12,900,000

Due after 5 years
39,900,000–

2,000,000–––

3,000,000

FUKUOKA REIT CORPORATION

39

Amount of repayment of long-term debt and investment corporation bonds scheduled to be due after closing of accounts (as of February 28, 2023)

	(thousands of yen)
Long-term debt
Investment corporationbonds

Due in 1 year or less
10,400,000

1 to 2 years
2,700,000

2 to 3 years
6,400,000

3 to 4 years
12,500,000

4 to 5 years
14,000,000

Due after 5 years
32,900,000

2,000,000

–

–

–

–

3,000,000(Notes to investment securities)
36th fiscal period (as of August 31, 2022)
Not applicable.

37th fiscal period (as of February 28, 2023)
Not applicable.

(Notes to derivative transactions)
1. Derivatives to which hedge accounting is not applied
36th fiscal period (as of August 31, 2022)
Not applicable.

37th fiscal period (as of February 28, 2023)
Not applicable.

2. Derivatives to which hedge accounting is applied
36th fiscal period (as of August 31, 2022)
The following is the contract amount or amount equivalent to the principal provided in the contract as of the closing of accounts
for each method of hedge accounting.
(thousands of yen)
Method of hedge accounting

Type of derivative transactions,etc.

Main hedged
item

Special accounting for interest rate swaps

Interest rate swap transaction
Receivable floating; Payable fixedLong-term debt

Contract amount, etc.
Of which,exceeding 1 year
21,100,000

19,200,000

Fair
value

Calculation
method for thefair value(*)–(*) Transactions for which special accounting for interest rate swaps is applied are combined with long-term debt for accounting purposes. Accordingly, their fair value is included in the fair value of the relevant
long-term debt (refer to Notes to financial instruments, 2. Matters concerning fair value of financial instruments, (Note 1) (4)).

37th fiscal period (as of February 28, 2023)
The following is the contract amount or amount equivalent to the principal provided in the contract as of the closing of accounts
for each method of hedge accounting.
(thousands of yen)
Method of hedge accounting

Type of derivative transactions,etc.

Main hedged
item

Special accounting for interest rate swaps

Interest rate swap transaction
Receivable floating; Payable fixedLong-term debt

Contract amount, etc.
Of which,exceeding 1 year
21,100,000

16,700,000

Fair
value

Calculation
method for thefair value(*)–(*) Transactions for which special accounting for interest rate swaps is applied are combined with long-term debt for accounting purposes. Accordingly, their fair value is included in the fair value of the relevant
long-term debt (refer to Notes to financial instruments, 2. Matters concerning fair value of financial instruments, (Note 1) (4)).

FUKUOKA REIT CORPORATION

40

IX. Notes to Financial Statements

IX. Notes to Financial Statements(Notes to retirement benefits)
37th fiscal period (from September 1, 2022 to February 28, 2023)

36th fiscal period (as of August 31, 2022)



Not applicable as FRC does not have any retirement benefit system.

37th fiscal period (as of February 28, 2023)
Not applicable as FRC does not have any retirement benefit system.

(Notes to tax effect accounting)Classification

Name

Location

Other
affiliates

Fukuoka
Jisho Co.,Ltd.

Hakata Ward,
Fukuoka City

CapitalBusiness
description

100,000

General realestatebusiness(Note 2)

1. Breakdown of primary causes for occurrence of deferred tax assets and deferred tax liabilities.
(thousands of yen)

36th fiscal period

37th fiscal period(as of August 31, 2022)(as of February 28, 2023)

Deferred tax assets
Amount of accrued business taxes not deductible from taxable income
Total deferred tax assets
Deferred tax assets, net

13
13
13

19
19
19

2. Breakdown of significant causes of the difference between the effective statutory income tax rate and the effective income tax rate after application of tax effect accounting.
(%)
36th fiscal period

37th fiscal period(as of August 31, 2022)(as of February 28, 2023)

Effective statutory income tax rate
Deductible dividend amount
Other
Effective income tax rate after application of tax effect accounting

31.25(31.24)
0.02
0.04

31.25
(31.24)0.02
0.04

FRC’s share of
voting rights, etc.

Descriptionofrelationship(thousands of yen)

Descriptionoftransaction

Transaction
amountCategory

Balance at
end ofperiodConsignment Consignment
Ownership in FRC
of real estate of real estate
Direct [9.19%]
management, management,
Indirect [0. 70%]
etc.
etc. (Note 1)

909,403

Operatingaccounts
payable95,865[or ownership of suchin FRC](Note 3)(Note 1) Transaction terms and conditions are determined in reference to market prices, etc. and by concluding business consignment agreements after negotiating on prices.
(Note 2) FRC has concluded a building lease and management consignment agreement with Fukuoka Jisho Co., Ltd. for Taihaku Street Business Center. The lease contract is a master lease type with passthrough rent, in which rents and other proceeds from end tenants are directly related to an increase or decrease of FRC’s revenues.
For the property covered by the said type of agreement, the above table shows figures that regard end tenants as direct lessees.
(Note 3) Consumption taxes are not included in the transaction amount but are included in the balance at end of period.

(2) Affiliated companies, etc.
36th fiscal period (from March 1, 2022 to August 31, 2022)
Not applicable.

37th fiscal period (from September 1, 2022 to February 28, 2023)
Not applicable.

(3) Sister companies
36th fiscal period (from March 1, 2022 to August 31, 2022)
(Notes to equity method income and earnings)

Classification

36th fiscal period (from March 1, 2022 to August 31, 2022)
Not applicable as FRC does not have any affiliated companies.

37th fiscal period (from September 1, 2022 to February 28, 2023)
Not applicable as FRC does not have any retirement benefit system.

(Notes to transactions with related parties)
1. Transactions with related parties(1) Parent company and major corporate unitholders
36th fiscal period (from March 1, 2022 to August 31, 2022)
Classification

Name

Location

CapitalBusiness
description

Other
affiliates

Fukuoka
Jisho Co.,Ltd.

Hakata Ward,
Fukuoka City

100,000

General realestatebusiness(Note 2)

FRC’s share of
voting rights, etc.
[or ownership of suchin FRC]

Descriptionofrelationship(thousands of yen)
Descriptionoftransaction

Consignment Consignment
Ownership in FRC
of real estate of real estate
Direct [9.19%]
management, management,
Indirect [0. 84%]
etc.
etc. (Note 1)

Transaction
amountCategory

Balance at
end ofperiod839,311

Operatingaccounts
payable66,850(Note 3)Name

Location

Subsidiaries
of otheraffiliates

FJ.
Entertainment Hakata Ward,
Works Ltd. Fukuoka City

Subsidiaries
of otheraffiliates

Fukuoka
Realty Co.,Ltd.

CapitalBusiness
description

20,000Real estatebusiness

200,000

Asset
managementof FRC andotherbusinesses(Note 2)

Hakata Ward,
Fukuoka City

41

(thousands of yen)

FRC’s share of
voting rights, etc. Description of Description of Transaction[or ownership of relationship transaction
amountsuch in FRC]
Consignment Consignmentof real estate of real estate 1,364,487–(Note 5)management, management,
etc.
etc. (Note 1)

–

Asset
managementof FRC, etc.
(Note 3)

Payment of
asset
managementfees

534,574(Note 5)

Category

Balance at
end ofperiodOperatingaccounts
payable203,664

Accruedexpenses309,516(Note 5)(Note 5)(Note 4)(Note 1) Transaction terms and conditions are determined in reference to market prices, etc. and by concluding business consignment agreements after negotiating on prices.
(Note 2) FRC has concluded with FJ. Entertainment Works Ltd. a building lease and management consignment agreement for Canal City Hakata, Canal City Hakata·B, Canal City Business Center Building andKonoha Mall Hashimoto, and a real estate lease and management consignment agreement for Park Place Oita. The relevant lease agreements are master lease type with pass-through rent, in which
rents and other proceeds from end tenants are directly related to an increase or decrease of FRC’s revenues. For the properties covered by the said type of the agreements, the above table shows figuresthat regard end tenants as direct lessees.
(Note 3) As of the date of this document, Zenji Koike concurrently serves as President and CEO of Fukuoka Realty Co., Ltd.
(Note 4) The amount of the asset management fees is decided based on the asset management consignment agreement following discussion between the concerned parties.
(Note 5) Consumption taxes are not included in the transaction amount but are included in the balance at end of period.

(Note 3)(Note 1) Transaction terms and conditions are determined in reference to market prices, etc. and by concluding business consignment agreements after negotiating on prices.
(Note 2) FRC has concluded a building lease and management consignment agreement with Fukuoka Jisho Co., Ltd. for Taihaku Street Business Center. The lease contract is a master lease type with passthrough rent, in which rents and other proceeds from end tenants are directly related to an increase or decrease of FRC’s revenues.
For the property covered by the said type of agreement, the above table shows figures that regard end tenants as direct lessees.
(Note 3) Consumption taxes are not included in the transaction amount but are included in the balance at end of period.

FUKUOKA REIT CORPORATION(Note 3)FUKUOKA REIT CORPORATION

42

IX. Notes to Financial Statements

IX. Notes to Financial Statements(Notes to properties for lease)37th fiscal period (from September 1, 2022 to February 28, 2023)
Classification

Name

Location

Subsidiaries
of otheraffiliates

FJ.
Entertainment Hakata Ward,
Works Ltd. Fukuoka City

Subsidiaries
of otheraffiliates

Fukuoka
Realty Co.,Ltd.

Capital

20,000Business
description

Real estatebusiness(Note 2)

Hakata Ward,
Fukuoka City

200,000

Asset
managementof FRC andotherbusinesses(thousands of yen)

FRC’s share of
voting rights, etc. Description of Description of Transaction[or ownership of relationship transaction
amountsuch in FRC]
Consignment Consignmentof real estate of real estate 1,499,571–(Note 5)management, management,
etc.
etc. (Note 1)

–

Asset
managementof FRC, etc.
(Note 3)

Payment of
asset
managementfees

534,370(Note 5)

Category

Balance at
end ofperiodOperatingaccounts
payable268,783

Accruedexpenses

313,398

FRC owns retail, office buildings and other properties for lease in the Kyushu area centering on Fukuoka Prefecture. The following table provides the book value recorded on the balance sheet, amount of change during the period and fair value of theseproperties for lease.
(thousands of yen)
Use

(Note 5)Retail(Note 5)(Note 4)

Office buildings(Note 1) Transaction terms and conditions are determined in reference to market prices, etc. and by concluding business consignment agreements after negotiating on prices.
(Note 2) FRC has concluded with FJ. Entertainment Works Ltd. a building lease and management consignment agreement for Canal City Hakata, Canal City Hakata·B, Canal City Business Center Building andKonoha Mall Hashimoto, and a real estate lease and management consignment agreement for Park Place Oita. The relevant lease agreements are master lease type with pass-through rent, in which
rents and other proceeds from end tenants are directly related to an increase or decrease of FRC’s revenues. For the properties covered by the said type of the agreements, the above table shows figuresthat regard end tenants as direct lessees.
(Note 3) As of the date of this document, Zenji Koike concurrently serves as President and CEO of Fukuoka Realty Co., Ltd.
(Note 4) The amount of the asset management fees is decided based on the asset management consignment agreement following discussion between the concerned parties.
(Note 5) Consumption taxes are not included in the transaction amount but are included in the balance at end of period.

Others(4) Directors and major individual unitholders
36th fiscal period (from March 1, 2022 to August 31, 2022)

Total

Not applicable.

37th fiscal period (from September 1, 2022 to February 28, 2023)
Not applicable.

2. Parent company and major affiliated companies
36th fiscal period (from March 1, 2022 to August 31, 2022)
Not applicable.

103,871,283(972,696)
102,898,586
110,817,500

55,497,954
3,809,161
59,307,116
86,960,000

59,307,116(285,865)
59,021,250
89,600,000

27,173,149(179,922)
26,993,227
34,330,000

26,993,227(157,974)
26,835,252
34,860,000

185,678,576
4,493,050
190,171,626
233,190,000

190,171,626(1,416,536)
188,755,089
235,277,500

The following table provides the income (loss) from properties for lease.
(thousands of yen)

Retail(Notes to asset retirement obligations)
Office buildings

Not applicable.

37th fiscal period (from September 1, 2022 to February 28, 2023)

103,007,471
863,811
103,871,283
111,900,000(Note 1) Amount recorded on the balance sheet is the cost of acquisition less accumulated depreciation.
(Note 2) Of the amount of change during the 36th fiscal period, the amount of increase is primarily attributable to acquisition of Hakata Chikushi-Dori Center Building (4,069 million yen (excluding the deposit
already paid in the 34th fiscal period from the acquisition price)) and capital expenditures (1,946 million yen), and the amount of decrease is primarily attributable to depreciation and amortization expenses (1,514 million yen). Of the amount of change during the 37th fiscal period, the amount of increase is primarily attributable to capital expenditures (385 million yen), and the amount of decreaseis primarily attributable to disposition of Kurume Higashi Kushiwara SC (15% co-ownership interest) (292 million yen) and depreciation and amortization expenses (1,499 million yen).
(Note 3) The fair value at end of period is the appraisal value provided by outside real estate appraisers.

37th fiscal period (from September 1, 2022 to February 28, 2023)

36th fiscal period (from March 1, 2022 to August 31, 2022)

37th fiscal period(September 1, 2022 to February 28, 2023)

Amount recorded on the balance sheet
Balance at beginning of period
Amount of change during period
Balance at end of period
Fair value at end of period
Amount recorded on the balance sheet
Balance at beginning of period
Amount of change during period
Balance at end of period
Fair value at end of period
Amount recorded on the balance sheet
Balance at beginning of period
Amount of change during period
Balance at end of period
Fair value at end of period
Amount recorded on the balance sheet
Balance at beginning of period
Amount of change during period
Balance at end of period
Fair value at end of period

Use

Not applicable.

36th fiscal period(March 1, 2022 to August 31, 2022)

OthersNot applicable.

Total

36th fiscal period

37th fiscal period(March 1, 2022 to August 31, 2022)(September 1, 2022 to February 28, 2023)

Amount recorded on the statement of income
Real estate leasing business revenues
Expenses related to real estate leasing business
Revenues and expenses related to real estate leasing businessAmount recorded on the statement of income
Real estate leasing business revenues
Expenses related to real estate leasing business
Revenues and expenses related to real estate leasing businessAmount recorded on the statement of income
Real estate leasing business revenues
Expenses related to real estate leasing business
Revenues and expenses related to real estate leasing businessAmount recorded on the statement of income
Real estate leasing business revenues
Expenses related to real estate leasing business
Revenues and expenses related to real estate leasing business

4,959,664
3,269,668
1,689,995

5,089,273
3,341,992
1,747,281

2,924,332
1,293,843
1,630,489

2,894,474
1,389,877
1,504,596

946,653
410,799535,853

938,178
415,147
523,0318,830,650
4,974,312
3,856,337

8,921,926
5,147,017
3,774,909(Note) Real estate leasing business revenues and expenses related to real estate leasing business are comprised of leasing business revenues and accompanying expenses (outsourcing fees, depreciation andamortization expenses, taxes and other public charges, etc.), and are recorded as Leasing revenues - real estate, Other leasing revenues - real estate and Expenses related to leasing business, respectively.

FUKUOKA REIT CORPORATION43FUKUOKA REIT CORPORATION

44

IX. Notes to Financial Statements

IX. Notes to Financial Statements(Notesto revenue recognition)

36th fiscal period (from March 1, 2022 to August 31, 2022)
Breakdown information on revenue from contracts with customers

Proceeds from sales of real estate
Utilities income
OthersTotal(thousands of yen)

Revenues from contracts with customers (Note)–
491,383
111,018
602,401

Sales to external customers–
491,383
8,339,266
8,830,650(Note) Leasing business revenues subject to the “Accounting Standard for Lease Transactions” (ASBJ Statement No.13) and transfers of real estate property subject to the “Practical Guidelines on Accounting by
Transferors for Securitization of Real Estate Using Special Purpose Companies” (Accounting System Committee Report No.15 of the Japanese Institute of Certified Public Accountants) are excluded from
“Revenues from contracts with customers” as such revenues are not covered by the Accounting Standard for Revenue Recognition. Revenues generated from contracts with customers mainly represent
proceeds from sales of real estate and utilities income.

Proceeds from sales of real estate
Utilities income
OthersTotal(thousands of yen)

Revenues from contracts with customers (Note 1)
411,000
503,246
93,6791,007,925(3) Information by major customer
Descriptions are omitted as FRC’s operating revenues for an individual outside customer are less than 10% of operating
revenues recorded in the statement of income.

37th fiscal period (from September 1, 2022 to February 28, 2023)(1) Information by product and service
Descriptions are omitted as FRC’s operating revenues under single product/service classification for outside customers exceed 90% of operating revenues recorded in the statement of income.

(2) Information by region

37th fiscal period (from September 1, 2022 to February 28, 2023)
1. Breakdown information on revenue from contracts with customers(b) Property, plant and equipment
Descriptions are omitted as the amount of FRC’s property, plant and equipment located in Japan exceeds 90% of property, plant and equipment recorded on the balance sheet.

Sales to external customers (Note 2)
115,438
503,246
8,418,680
9,037,365(Note 1) Leasing business revenues subject to the “Accounting Standard for Lease Transactions” (ASBJ Statement No.13) and transfers of real estate property subject to the “Practical Guidelines on Accounting
by Transferors for Securitization of Real Estate Using Special Purpose Companies” (Accounting System Committee Report No.15 of the Japanese Institute of Certified Public Accountants) are excluded
from “Revenues from contracts with customers” as such revenues are not covered by the Accounting Standard for Revenue Recognition. Revenues generated from contracts with customers mainly
represent proceeds from sales of real estate and utilities income.
(Note 2) As sale of real estate is recorded as gain on sales of real estate property on the statement of income based on the "Regulations on calculations of investment corporations” (Cabinet Office Order No. 47
of 2006), the amount obtained by deducting costs of sale of real estate property and other selling expenses from proceeds from sales of real estate is indicated.

2. Information for understanding the amount of revenue for the current fiscal period and the next fiscal period and thereafter
Transaction price allocated to remaining performance obligations
As of February 28, 2023, the total transaction price allocated to the remaining performance obligations related to the sale ofreal estate properties was 2,329,000 thousand yen for the real estate property for which a sales agreement was signed on
October 26, 2022. FRC anticipates to recognize revenues for the remaining performance obligations of 1,507,000 thousand
yen on August 31, 2023 and 822,000 thousand yen on November 30, 2023 upon the scheduled delivery of the relevant realestate property.

(a) Operating revenues
Descriptions are omitted as FRC’s operating revenues for outside customers in Japan exceed 90% of operating revenues
recorded in the statement of income.
(b) Property, plant and equipment
Descriptions are omitted as the amount of FRC’s property, plant and equipment located in Japan exceeds 90% of property, plant and equipment recorded on the balance sheet.

(3) Information by major customer
Descriptions are omitted as FRC’s operating revenues for an individual outside customer are less than 10% of operating
revenues recorded in the statement of income.

(Notes to per unit information)
36th fiscal period

37th fiscal period(March 1, 2022 to August 31, 2022)(September 1, 2022 to February 28, 2023)

127,818
3,523

Net assets per unit (yen)Profit per unit (yen)(Note 1) Profit per unit was calculated by dividing the profit by the daily weighted average number of investment units. Diluted profit per unit is not stated as there are no dilutive investment units.
(Note 2) Profit per unit was calculated based on the following data:

36th fiscal period

37th fiscal period(March 1, 2022 to August 31, 2022)(September 1, 2022 to February 28, 2023)

2,804,394–
2,804,394
796,000

Profit (thousands of yen)Amounts not attributable to ordinary unitholders (thousands of yen)
Profit attributable to ordinary investment units (thousands of yen)
Average number of units during the fiscal period (units)(Notes to segment information)[Segment information]
Descriptions omitted as FRC has a single business segment of real estate leasing business.

(Notes to significant subsequent events)[Related information]

No relevant items.

36th fiscal period (from March 1, 2022 to August 31, 2022)(1) Information by product and service
Descriptions are omitted as FRC’s operating revenues under single product/service classification for outside customers exceed 90% of operating revenues recorded in the statement of income.

(2) Information by region(a) Operating revenues
Descriptions are omitted as FRC’s operating revenues for outside customers in Japan exceed 90% of operating revenues
recorded in the statement of income.

FUKUOKA REIT CORPORATION

45

127,875
3,580

FUKUOKA REIT CORPORATION

46

2,849,927–
2,849,927
796,000

X. Supplementary Schedules

X. Supplementary Schedules(Schedule of securities)(Schedule of investment corporation bonds)

Not applicable.
Issue(Schedule of contract amount, etc. and fair value of derivative transactions
andforward exchange transactions)(thousands of yen)
Category

Type(Note 1)

Interest rate swap transaction
Receivable floating; Payable fixed

Off-market transaction

Contract amount, etc.
Of which, exceeding 1 year

21,100,000

Total

21,100,000

490,344

16,700,000

Buildings
Structures
Tools and fixtures
Land
Buildings in trust

Decreaseduring the
fiscal period

Balance as ofFebruary 28,
2023(thousands of yen)(thousands of yen)(thousands of yen)

2,000,000–

2,000,000

December 30,
2013
July 31, 2017
July 31, 2018

Total

2,000,000
1,000,000
5,000,000–––

Coupon(%)

Maturity date

Maturity
methodUse

Description

1.32

December 29,
2023

Lump-sumupon maturity

Repayment ofdebt

No collateral/
No guarantee

July 30,2032

Lump-sumupon maturity

Repayment ofdebt

No collateral/
No guarantee

July 30,
2038

Lump-sumupon maturity

Repayment ofdebt

No collateral/
No guarantee

2,000,000
1,000,000

1.00
1.20

Balance as ofAccumulated Depreciation
February 28,
depreciation for the period2023
1,181,091
68,543
14,761
20,698
903
193
1,571
547
117
989,124––

Net property
andRemarks
equipment
1,112,547 (Note 1)
19,795
1,023
989,124

9,270
–
–
–

–
–
–
–

104,797,631

345,772

176,151

104,967,252

39,379,429

1,396,578

65,587,822(Note 1)
(Note 2)

Structures in trust
Total
property, Machinery and equipment
plant and in trust
equipment Vehicles and transport
equipment in trust

1,976,251

3,345

4,608

1,974,987

931,405

28,3791,043,582((Note 1)(Note 2)

1,483,511

7,004

–

1,490,515

781,851

36,449708,664(Note 1)

626

–

–

626

594

–

31

Tools and fixtures in trust

1,473,642

19,764

4,110

1,489,296

1,257,920

20,348231,375(Note 1)
(Note 2)Land in trust
Construction in progressin trust
Subtotal
Leasehold right in trust
Total
Other intangible assets inintangible
trust
assetsSubtotal
Total

113,715,265–

213,665

113,501,599––

113,501,599(Note 2)

7,932

2,896

2,610

8,217

–

–

8,217

225,638,076
5,545,883

388,051–

401,147–

225,624,981
5,545,883

42,421,196–

1,496,830–

183,203,784
5,545,883

71,136––

71,13665,714

2,893

5,421

5,617,019
231,255,095–
388,051–
401,147

5,617,019
231,242,000

65,714
42,486,910

2,893
1,499,723

5,551,305
188,755,089(Note 1)

(Note 2)

(Note 2)(thousands of yen)
Category
Investment corporation bonds

Due in 1 year or less
2,000,000

1 to 2 years–

2 to 3 years–(Schedule of other specified assets)
Not applicable.

47(Note 1)

(Note 2)5,000,000(Note 1) The main increase in the 37th fiscal period is due to construction work at properties.
(Note 2) The main decrease in the 37th fiscal period is due to the disposition of Kurume Higashi Kushiwara SC (15% co-ownership interest).

FUKUOKA REIT CORPORATION(Note 1)(thousands of yen)

Decrease

Balance as of
September 1,
2022(Note 1) The bonds may be repurchased and cancelled by FRC at any time on and after the date following the payment date, unless otherwise determined by the book-entry transfer agent.
(Note 2) The bonds are subject to the limited pari passu clause among specified investment corporation bonds.
(Note 3) Amount of redemption of investment corporation bonds scheduled to be due within 5 years after period end.



Increase

Third Series ofUnsecured Bonds

490,344(Schedule of property, plant and equipment, and intangible assets)
Balance as of
September 1,
2022
1,171,821
20,6981,571
989,124

Second Series ofUnsecured Bonds(Note 2)

(Note 1) The contract amount, etc. of the interest rate swap transaction is based on the notional principal amount.
(Note 2) The fair value is calculated by the counterparty of the transaction contract based on the actual interest rate on the market and other factors.

Type of asset

First Series ofUnsecured Bonds

Fair value

16,700,000

Issue date

FUKUOKA REIT CORPORATION

48

3 to 4 years–

4 to 5 years–

X. Supplementary Schedules

X. Supplementary Schedules(Scheduleof debt)
(thousands of yen)
Balance as of
September 1,
2022

Increase

Decrease

Sumitomo Mitsui Trust Bank

1,500,000–

Development Bank of Japan

4,000,000

Current The Nishi-Nippon City Bank
maturities
The Bank of Fukuoka
of longterm debt The Nishi-Nippon City Bank

Category
LenderMizuho Bank
Subtotal

Balance as of Average
February 28, interest rate(%) (Note 1)
2023

Repayment
date

Use of funds Description–

1,500,000

0.564

July 31, 2023

Refinance fund––4,000,000

0.880

August 31, 2023

Refinance fund

400,000––

400,000

0.870

August 31, 2023

Refinance fund–

2,000,000–

2,000,000

0.409

February 29, 2024

Refinance fund–

2,000,000–

2,000,000

0.440

February 29, 2024

Refinance fund–

500,000–

500,000

0.440

February 29, 2024

Refinance fund

5,900,000

4,500,000–

10,400,000

No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee

LenderBalance as of
September 1,
2022

Increase

Decrease

The Bank of Fukuoka

1,500,000––

1,500,000

0.812

December 30, 2027 Refinance fundDevelopment Bank of Japan

500,000––

500,000

0.680

December 30, 2027 Refinance fund

The Nishi-Nippon City Bank

1,900,000––

1,900,000

0.750

February 29, 2028

Refinance fund

Sumitomo Mitsui Trust Bank

1,100,000––

1,100,000

0.600

February 26, 2027

Refinance fund

MUFG Bank

1,500,000––

1,500,000

0.500

February 27, 2026

Refinance fundResona Bank

600,000––

600,000

0.567

February 29, 2028

Refinance fund

2,500,000––

2,500,000

0.720

March 1, 2028

Acquisition fund

MUFG Bank

600,000––

600,000

0.480

March 31, 2026

Refinance fund

The Nishi-Nippon City Bank

600,000––

600,000

0.802

March 31, 2028

Refinance fund

The Bank of Fukuoka

500,000––

500,000

0.802

March 31, 2028

Refinance fundMizuho Bank

500,000––

500,000

0.630

March 31, 2028

Refinance fund

Sumitomo Mitsui Banking
Corporation

500,000––

500,000

0.504

March 31, 2025

Refinance fund

MUFG Bank

500,000––

500,000

0.490

March 31, 2027

Refinance fund

Sumitomo Mitsui Trust Bank

400,000––

400,000

0.576

March 31, 2027

Refinance fund

The Oita Bank

400,000––

400,000

0.646

March 31, 2028

Refinance fund

The Hiroshima Bank

400,000––

400,000

0.646

March 31, 2028

Refinance fund

SBI Shinsei Bank (Note 2)

300,000––

300,000

0.400

March 31, 2025

Refinance fundLong-term Sumitomo Mitsui Banking
Corporation
debt

500,000––

500,000

0.655

January 31, 2029

Refinance fund

MUFG Bank

500,000––

500,000

0.590

January 31, 2028

Refinance fund

The Nishi-Nippon City Bank

400,000––

400,000

0.412

January 31, 2029

Refinance fund

The Bank of Fukuoka

300,000––

300,000

0.412

January 31, 2029

Refinance fund

The Oita Bank

200,000––

200,000

0.334

February 27, 2026

Refinance fundCategory

Development Bank of JapanThe Bank of Fukuoka

2,000,000–

2,000,000

–

0.409

February 29, 2024

Refinance fund

The Nishi-Nippon City Bank

2,000,000–

2,000,000

–

0.440

February 29, 2024

Refinance fundDevelopment Bank of Japan

2,000,000––

2,000,000

0.620

February 28, 2025

Refinance fundMizuho Bank

500,000–

500,000–

0.440

February 29, 2024

Refinance fund

SBI Shinsei Bank (Note 2)

700,000––

700,000

0.400

July 31, 2024

Refinance fund

0.408

September 30,
2025

Refinance fundNo collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee

Balance as of Average
February 28, interest rate(%) (Note 1)
2023

Repayment
date

Use of funds Description

Sumitomo Mitsui Trust Bank

300,000––

300,000

Development Bank of Japan

1,500,000––

1,500,000

The Oita Bank

100,000––

100,000

The Kagoshima Bank

100,000––

100,000

The Kitakyushu Bank

100,000––

100,000

The Juhachi-Shinwa Bank

200,000––

200,000

The Hiroshima Bank

100,000––

100,000

The Bank of Fukuoka

1,500,000––

1,500,000

0.414

December 30, 2026 Refinance fund

MUFG Bank

800,000––

800,000

0.481

March 31, 2025

Refinance fundResona Bank

600,000––

600,000

0.658

March 31, 2027

Refinance fund

300,000––

300,000

0.481

March 31, 2025

Refinance fund

1,300,000––

1,300,000

The Kagoshima Bank

200,000––

200,000

0.334

February 27, 2026

Refinance fund

1,000,000––

1,000,000

The Higo Bank

200,000––

200,000

0.334

February 27, 2026

Refinance fund

The Oita Bank

700,000––

700,000

Resona Bank

200,000––

200,000

0.488

February 28, 2029

Refinance fund

The Kitakyushu Bank

700,000––

700,000

The Miyazaki Bank

700,000––

700,000

Mizuho Bank

July 31, 2029

Refinance fund

1,100,000––

1,100,000

0.521

500,000––

500,000

Long-term The Higo Bank
debt
The Bank of Fukuoka
The Nishi-Nippon City BankThe Juhachi-Shinwa BankThe Iyo Bank

0.718

0.777

December 30, 2025 Refinance fund

June 30, 2026

Refinance fundNo collateral/
No guarantee

No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee

No collateral/
No guarantee

No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee

1,200,000––

1,200,000

The Bank of Saga

500,000––

500,000

The Higo Bank

500,000––

500,000

1,500,000––

1,500,000

0.303

January 29, 2027

Refinance fund

500,000––

500,000

0.480

September 29,
2028

Refinance fund

The Nishi-Nippon City Bank

2,500,000––

2,500,000

0.480

February 28, 2030

Refinance fundMizuho Bank

1,700,000––

1,700,000

0.420

February 28, 2030

Refinance fundAozora Bank

1,000,000––

1,000,000

0.569

June 28, 2030

Refinance fundResona Bank

700,000––

700,000

0.569

June 28, 2030

Acquisition fund

MUFG Bank

500,000––

500,000

0.600

June 29, 2029

Acquisition fund

500,000––

500,000

0.465

June 30, 2028

Acquisition fund

The Norinchukin Bank

Development Bank of Japan

1,800,000––

1,800,000

0.650

The Bank of Fukuoka

2,000,000––

2,000,000

0.792

July 31, 2027

Refinance fund

The Nishi-Nippon City Bank

2,000,000––

2,000,000

0.892

July 31, 2027

Refinance fund

The Nishi-Nippon City Bank

500,000––

500,000

The Bank of Fukuoka

500,000––

500,000

The Oita Bank

100,000––

100,000

The Kitakyushu Bank

100,000––

100,000

The Juhachi-Shinwa Bank

200,000––

200,000

The Kagoshima Bank

The Hiroshima Bank

100,000––

100,000

Development Bank of Japan

1,500,000––

1,500,000

0.530

July 31, 2030

Refinance fund

2,000,000––

2,000,000

Mizuho Bank

1,000,000––

1,000,000

0.470

July 31, 2030

Refinance fundResona BankFUKUOKA REIT CORPORATION

49

0.850

0.493

December 31, 2026 Refinance fundAugust 31, 2027

September 30,
2027

Refinance fund

Refinance fundNo collateral/
No guarantee

No collateral/
No guarantee

MUFG BankFUKUOKA REIT CORPORATION50

No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee

No collateral/
No guarantee

No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee

X. Supplementary Schedules

LenderBalance as of
September 1,
2022

Increase

Decrease

The Kitakyushu Bank

500,000––

500,000

The Iyo Bank

200,000––

The Juhachi-Shinwa Bank

1,000,000–

Mizuho Bank

2,300,000

The Hiroshima Bank
The Kitakyushu Bank

Category

Balance as of Average
February 28, interest rate(%) (Note 1)
2023

Repayment
date

Use of funds Description

0.526

July 31, 2030

Refinance fund

200,000

0.526

July 31, 2030

Refinance fund–

1,000,000

0.590

March 31, 2031

Refinance fund––2,300,000

1,400,000––

1,400,000

800,000––

800,000

0.490

July 31, 2031

Refinance fundNo collateral/
No guarantee

500,000––

500,000

300,000––

300,000

Mizuho Trust & Banking Co., Ltd.

1,000,000––

1,000,000

0.305

March 31, 2032

Refinance fundNo collateral/
No guarantee

Sumitomo Mitsui Banking
Corporation

1,600,000––

1,600,000

0.726

June 29, 2029

Refinance fundNo collateral/
No guarantee

Development Bank of Japan

4,000,000––

4,000,000

The Nishi-Nippon City Bank

500,000––

500,000

0.919

August 31, 2032

Refinance fundNo collateral/
No guarantee

The Bank of Fukuoka

400,000––

400,000

Subtotal

73,000,000–

4,500,000

68,500,000

78,900,000

4,500,000

4,500,000

78,900,000

Long-term The Iyo Bank
debt
The Higo Bank

Total

(Note 3)

No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee(Note 1) The average interest rate is a weighted-average figure during the fiscal period and is rounded to the third decimal place. Furthermore, the average interest rate of debt for which FRC conducted interest
rate swap transactions is the weighted-average figure during the fiscal period taking into consideration the effect of interest rate swaps.
(Note 2) Shinsei Bank, Ltd. changed its trade name to SBI Shinsei Bank, Limited as of January 4, 2023.
(Note 3) The borrowing is a Sustainability-Linked Loan in which it has been set as a Sustainability Performance Target (SPT) to reduce CO2 emissions (in terms of intensity) by 35% compared with fiscal 2019 by
February 28, 2031, and the achievement of the target is linked to the loan conditions. When the SPT is achieved, the contract will offer a preferential treatment for the interest rate determined at thetime of borrowing, for the period from August 2031 to the repayment date.
(Note 4) Amount of repayment of long-term debt scheduled to be due within 5 years after period end.

(thousands of yen)

Category
Long-term debt

1 to 2 years
2,700,000

2 to 3 years
6,400,000

3 to 4 years
12,500,000

FUKUOKA REIT CORPORATION

4 to 5 years
14,000,00051