Fukuoka REIT Corporation in Numbers

Contents

Who We Are

Sustainability

01 Fukuoka REIT Corporation in Numbers

24 Sustainability

02 Overview of Fukuoka REIT Corporation/
History of Asset Portfolio Expansion

26 Materiality

04 Relationship with Fukuoka Realty Co., Ltd.
06 Macroeconomic Environment around Fukuoka
12 Value-Creation Story
14 Value-Creation Activities

Growth Strategy
16 External Environment(Initiatives of Fukuoka City)

35

36 Social Response
38 Corporate Governance

Data Section

99.1%

40 Overview of Properties Owned

44 Financial/Non-Financial Highlights(11-Year/22-Period Summary)

20 Investment Strategy

Investment
type

22 Financial Strategy

based onacquisition price

14.6%

)

Office buildings

51.9%

Financial
Information
・Earnings report
・Securities report・Asset management
report・Operating systems report

Non-Financial
Information

Integrated
Report・Financial briefing materials
・Online disclosure ofsustainability information
・Corporate profile
・PR information disclosure)(stable)22.6%

R&I:(stable)
A+
LTV

★

3,753

Dividend yield

4.6%

Unrealized
gain

42.4% 48,478

Fukuoka
metropolitan area*

million yen

Securities code

77.4%

8968

Accounting periods

February
August* The Fukuoka metropolitan area includes Fukuoka City, Chikushino City, Kasuga City, Onojo City, Munakata City, Dazaifu City, Koga City, Fukutsu City, Itoshima City, Nakagawa City, Umi Town,
Sasaguri Town, Shime Town, Sue Town, Shingu Town, Hisayama Town, and Kasuya Town.
Glossary

From September 1, 2022, to August 31, 2023
(Some recent activities after the period covered are included.)

Credit rating
A grade that reflects the safety and creditworthiness of a company and its
ability to pay the principal and interest of bonds issued by the company
based on an analysis of the companyʼs performance and financial condition.
LTV
An abbreviation for Loan to Value and an indicator of a companyʼs borrowing
ratio as well as a measure of stability in borrowing. The lower the value, thegreater the degree of safety against redemption of debt.
[Calculation method] LTV (%): (Interest-bearing debt / Total assets) × 100

International Initiatives We Focus On

As of August 31, 2023

These materials might contain future performance projections, plans, managementtargets, and strategies. These forward-looking descriptions are based on present
assumptions on future events and trends in the business environment, butsuch assumptions might not necessarily be accurate. Actual results could differ
materially due to various factors. Neither Fukuoka REIT Corporation nor Fukuoka
Realty Co., Ltd., shall be liable for the accuracy, rationality, and completeness of

Data Section

Period covered by the reportyen

Sustainability(

based onacquisition price

JCR: AA

33.5%

Investment
Other
areas
Kyushu areas
Positioning of This Reportmillion yen

Credit ratings★

OthersRetailEditorial Policy

207,564

Growth Strategy(

21 Management Strategy

Asset size

Dividend
per unit

42 Financial/Non-Financial Highlights(5-Year Graph)

18 Risks and Opportunities

We have issued our Integrated Report since fiscal
2019 with the aim of imparting knowledge concerning
the value creation process of the Investment
Corporation and the Asset Management Company.
The Report has been positioned as an important toolfor engaging with our unitholders, investors, and otherstakeholders. The International Reporting Framework
recommended by the IFRS Foundation and theMinistry of Economy, Trade and Industryʼs Guidance for Collaborative Value
Creation have been referenced in the preparation of this Report to ensureease of understanding.
Through this Report, we aim to increase understanding of our efforts toenhance corporate value based on the basic philosophies of the Investment
Corporation and the Asset Management Company as well as the value wecreate in working to realize a sustainable society. We will continue striving to
make the Report an effective tool for facilitating constructive dialogue.

Occupancy rate

Who We Are

08 CEOʼs Message

Properties owned

28 Environmental Response

information contained in these materials, whether they were prepared by Fukuoka
REIT Corporation or Fukuoka Realty Co., Ltd., or provided by a third party.

Sustainable Development Goals (SDGs)

Principles for Responsible Investment (PRI)

Task Force on Climate-related Financial Disclosures (TCFD)

The SDGs refer to the international goals
set forth in the 2030 Agenda for Sustainable
Development adopted at the United Nations
Summit in September 2015 as the successor to theMillennium Development Goals (MDGs) establishedin 2001. Given the medium- to long-term expectations stakeholders havefor the resolution of these challenges, our priority issues (materiality) were
established in September 2019 with reference to the SDGs.

PRI comprises an international network offinancial institutions working to realize six
principles for the finance industry with the aim ofencouraging the incorporation of environmental,social, and governance (“ESG”) issues into investment decision-making
processes. Fukuoka Realty Co., Ltd., endorsed and became a signatory of
PRI in September 2018 to promote the consideration of ESG issues in realestate investment management operations and practices that conform tointernational standards.

Cognizant of the fact that climate change is amajor issue facing the international community,
in September 2022 we became a signatory of
the Task Force on Climate-related Financial Disclosures (TCFD) establishedby the Financial Stability Board (FSB), having endorsed the recommendationsof the TCFD that were announced in June 2017. We will strive to disclose
the impact of climate change and implement specific measures basedon the recommendations of the TCFD in addition to continuing to reduce
environmental impact and contribute to the local community.

Note that all information in this document is current at the time of preparationand is subject to change without prior notice.
These materials have not been prepared to entice investment.
When applying to purchase investment units issued by Fukuoka REIT
Corporation, do so based on your own judgment and responsibility.
Any unauthorized reprinting, use, reproduction, distribution, or modification of
all or part of the content contained in this Report is expressly prohibited.

Note: Regarding amount, percentage, and ratio rounding: Unless otherwise noted, in these materials,
monetary amounts are rounded down to the nearest whole unit, and percentages and ratios arerounded off to one decimal place.

Fukuoka REIT Corporation 2023

01
02

Overview of Fukuoka REIT Corporation/History of Asset Portfolio Expansion

FRC’s Characteristics

FRC was listed as the ﬁrst region-speciﬁc REIT in Japan on June 21, 2005, based on our intention to draw funds to the region
by introducing excellent properties in Fukuoka and Kyushu to investors locally and around the world. We capitalize on distinctive

FRC has the following ﬁve main strengths.

region, as well as Yamaguchi and Okinawa prefectures. Our portfolio primarily comprises retail facilities and ofﬁce buildings.

1 Japanʼs first

Driven by the core philosophy of “Act Local, Think Global,” our mission is to pursue the best interests of unitholders.
Name

Fukuoka REIT Corporation

Representative

Zenji Koike, Executive Director

Security code

8968

Listed dateJune 21, 2005
(Tokyo Stock Exchange, Fukuoka Stock Exchange)

Fiscal periods

February and August

Asset manager

Fukuoka Realty Co., Ltd.

Sponsors(Shareholders of theAsset Management
Company)

Fukuoka Jisho Co., Ltd.
Kyushu Electric Power Co., Inc.
THE BANK OF FUKUOKA, LTD.
THE NISHI-NIPPON CITY BANK, LTD.
Nishi-Nippon Railroad Co., Ltd.

2

region-specific
REIT
Asset management
leveraging our in-depth
knowledge of the realestate environmentof the Fukuoka andKyushu areas

SAIBU GAS HOLDINGS CO., LTD.
Kyudenko Corporation
Kyushu Railway Company
Development Bank of Japan Inc.

3

Excellent portfolio
centered on the Fukuoka
metropolitan area

A portfolio of carefully
selected investments in thehigh growth area of Fukuoka
City, which is gaining attention
in Japan and abroad

4

Solid support from asponsor company involvedin property development

Asset portfolio expansion andhigh occupancy rates facilitatedthrough coordination with oursponsors

5

Establishmentof a stablefinancial baseConservative controlof the interest-bearing
debt ratio and longterm diversification of
repayment deadlines

Stable dividends
and steady NAV
growth since listing

Appropriate management ofreal estate investments

Who We Are

regional features, a characteristic of the real estate industry, centering our operations on Fukuoka and the broader Kyushu

Trends in Asset Size (based on acquisition price)(Acquired properties)
Canal City Hakata
Canal City Business Center Building
Park Place Oita
Gofukumachi Business Center

32,00014,60015,700
11,200

D-Wing Tower
2,800
Hotel FORZA Oita
1,530
Tenjin North Front Building 2,800

Aqualia Kego 2,800
Aqualia Chihaya 1,280

Taihaku Street Business Center 7,000
2,060
5,300
2,400

Hakata Chikushi-Dori Center Building 4,320
Tenjin Nishi-Dori Business Center 7,700(land with leasehold interest）
Canal City Hakata・B(7,640)(Note)
Grand Building (sold)Park Place Oita (Sports Club NAS)
Aeon Hara Shopping Center (sold)
Aqualia Kego (sold)

1,470(5,410)(2,800)Higashi Hie
3,290
Business Center III
LOGICITY Wakamiya 1,700
Park Place Oita
990
(Home Plaza Nafco)（Number ofproperties）

Tissage Hotel Naha 2,835

LOGICITY 5,050
Hisayama

Canal City Hakata・B 28,700

40
36Aeon Hara Shopping Center
5,410
Kominedai Community Mall (Sold) （740）35

Hanahata SC
1,130City House Keyaki Dori
1,111
Kurume Higashi Kushiwara SC 2,500

150,000

36

33
31

Kʼs Denki Kagoshima 3,550
24
23

32

29

29

26

26

25

25

32

31

30

29

28

27

27

27

Higashi Hie Business Center 5,900
23

20

19
17

17
15

14

16

16

15

11

11

50,00016

Data Section

20

100,000

16

Sustainability

Amex Akasakamon Tower
Square Mall Kagoshima Usuki
Kumamoto Intercommunity SC

200,000

LOGICITY Minato Kashii
8,150
Marinoa City Fukuoka
5,250(Marina Side Building)Park Place Oita (adjacent land) 590

Hakata FD Business Center 14,100

Kurume Higashi Kushiwara SC (15% co-ownership interest) (sold) (375)

Granfore Yakuin Minami 1,100

Tenjin Nishi-Dori Center Building 2,600

Sanix Hakata Building
4,400
Kominedai Community Mall 740

220,000

Konoha Mall Hashimoto
10,000Higashi Hie Business Center II 4,230
Park Place Oita (adjacent land) 860

Tosu Logistics Center 1,250

SunLive City Kokura 6,633

Acquisition Price(Millions of yen)

Kumamoto East Front Building
1,450
Axion Befu-Ekimae Premium
1,525
Kurume Higashi Kushiwara SC (1,375)(55% co-ownership interest) (sold)Number of properties

Growth Strategy■ Retail ■ Office buildings ■ Logistics ■ Residences ■ Hotels

10

8
7
5
4

0

Listed

2nd

3rd

4th

5th

6th

7th

8th

9th

10th

11th

12th

13th

14th

15th

16th

17th

18th

19th

20th

21st

22nd

23rd

24th

25th

26th

27th

28th

29th

30th

31st

32nd

33rd

34th

35th

36th

37th

38th

Jun.2005

Aug.2005

Feb.2006

Aug.2006

Feb.2007

Aug.2007

Feb.2008

Aug.2008

Feb.2009

Aug.2009

Feb.2010

Aug.2010

Feb.2011

Aug.2011

Feb.2012

Aug.2012

Feb.2013

Aug.2013

Feb.2014

Aug.2014

Feb.2015

Aug.2015

Feb.2016

Aug.2016

Feb.2017

Aug.2017

Feb.2018

Aug.2018

Feb.2019

Aug.2019

Feb.2020

Aug.2020

Feb.2021

Aug.2021

Feb.2022

Aug.2022

Feb.2023

Aug.2023* Amounts indicate acquisition price.
Note: FRC has co-ownership interest in the amount of 88.28%, and the amount indicates the appraisal value at the time of transfer.

02

Glossary

NAV
NAV is an abbreviation for Net Asset Value at an investment trust. Net assets are defined as total
investment trust balance sheet assets minus liabilities, with the base price based on the numberof units. For REITs, the term net assets refers to net assets plus unrealized gains or losses
reflecting the difference between the book value of the property owned and the appraised value.

After theacquisitionofHakata FD0[Calculation method] NAV: Net assets + Unrealized gains or losses – Dividends
Market net assets value per unit: NAV / Total number of units issued
Fukuoka REIT Corporation 2023

02
03

Relationship with Fukuoka Realty Co., Ltd.

Organizational Structure of Fukuoka Realty

J-REIT, or Japan Real Estate Investment Trust, refers to a publicly traded real estate investment trust. It pools funds from investors andutilizes them to invest in real estate assets such as retail, ofﬁce buildings, and residences. Proﬁts generated from rent income and othersources are distributed to investors. Fukuoka REIT Corporation (FRC), as Japanʼs ﬁrst region-speciﬁc REIT, was listed on the Tokyo Stock
Exchange (TSE) and the Fukuoka Stock Exchange (FSE) on June 21, 2005, becoming the 17th REIT to be listed in the country. The
asset management company of FRC, Fukuoka Realty, upholds the Basic Policy of “Act Local, Think Global” and is entrusted with the key
operations of “acquiring and selling assets,” “asset rental management,” and “ﬁnancing.”◎Institutional Design[

Relationship between FRC
and Fukuoka Realty

Located in Fukuoka City and comprising 47 employees with a variety of experience in real estate, ﬁnance, and other ﬁelds, Fukuoka Realty
possesses a high level of expertise and makes full use of information unique to the local area in managing FRCʼs assets.

Who We Are

Structure of FRC

Shareholders General Meeting]

Real Estate Investment Trust
Fukuoka REIT Corporation(TSE and FSE)

Real estate(Retail, Office Buildings, Others)

Investment

Financing

AssetsPrincipal andinterest payment

Equity・The Bank of Fukuoka, Ltd.
・The Nishi-Nippon City Bank, Ltd.
・Development Bank of Japan Inc.
・Mizuho Bank, Ltd.
・Sumitomo Mitsui Banking
Corporation
・MUFG Bank, Ltd.
・Sumitomo Mitsui Trust Bank,Ltd.,
and others

Board of Directors
Compliance Assessment Committee

Investment Committee

Executive Committee

Hold units

President and CEO

Growth Strategy

Liabilities

Leasingrevenue

Corporate Auditor

Lenders

Investors
Asset management
operation

Real estate
management

Real EstateManagement Company

Dividend taxation
Risk Management Committee

Asset Management
Company(Property Management)
Fukuoka Jisho Co., Ltd.,

Sustainability Promotion Committee

Dividends

Asset management
operation
outsourcing

Compliance Department

(AM)
etc.

General Administrator/
Asset Custodian

Fukuoka Realty Co., Ltd.

Accounting auditor

Real Estate Management
Department

Investment Department

Finance Department

Planning Department

Investment

・Fukuoka Jisho Co., Ltd. (55%)
・Kyushu Electric Power Co., Inc. (10%)
・The Bank of Fukuoka, Ltd. (5%)
・The Nishi-Nippon City Bank, Ltd. (5%)
・Nishi-Nippon Railroad Co., Ltd. (5%)
・Saibu Gas Holdings Co., Ltd. (5%)
・Kyudenko Corporation (5%)
・Kyushu Railway Company (5%)
・Development Bank of Japan Inc. (5%)

General Administrator（Administrator of Unitholdersʼ Register/
Administrator of Special Accounts）

General Administrator of
Investment Corporation
Bonds

FRC and Fukuoka Realty take advantage of their strengths in having extensive knowledge and a deep understanding of the Fukuoka
and Kyushu regions and the characteristics of the local real estate to invest in properties for rent there. By effectively managing theseinvested properties, we aim to secure stable earnings over the medium to long term while making efforts to keep providing stabledividend distributions into the future.

Real estate is a local business・Distinctive capability for gathering
qualitative information on the real estatemarket (speed, in-depth information)
・Specialization in local properties
・Solid network among local governments
and the business world◎The Shareholder (Sponsor) Structure

5%

5%

5%

The Bank ofFukuoka, Ltd.

The Nishi-Nippon City
Bank, Ltd.

Development Bankof Japan Inc.

55%

Fukuoka Jisho Co., Ltd.*

Our Mission
Region-Specific REIT

Featuring our expertise on
local real estate markets,
Fukuoka and Kyushu,
maximize profits of investors

Outsidedirectors

Directors

Fukuoka Realty Co., Ltd.
(Asset manager)

Think Global

10%
Kyushu ElectricPower Co., Inc.

Capital market theory
・Accountability and transparent dialogue
with investors
・Proactive policy to comply
・Fund management skills

5%

5%

5%

5%

Saibu Gas Holdings
Co., Ltd.

Kyudenko
Corporation

Nishi-Nippon
Railroad Co., Ltd.

Kyushu Railway
Company

In addition, leading companies in Fukuoka and the Kyushu
region that are in agreement with FRCʼs concept participate asshareholders (sponsors) of Fukuoka Realty. FRC aims to achievesustainable growth as a REIT through the expanded scale of its
assets via the contribution of excellent properties from among oursponsors and by actively leveraging their support, including theprovision of relevant information.

Data Section

Basic Policy “Act Local, Think Global”

Act Local

Private Fund Management Office

Legal advisor

Sustainability

Real estate
management
outsourcing

With regard to the properties owned and developed by thesponsor companies, Fukuoka Jisho Co., Ltd., FRC, and Fukuoka
Realty Co., Ltd., have concluded a pipeline support★ memorandumof understanding (MOU) to seek stable and continuous acquisition
opportunities.

* Concluded a contract with FRC and Fukuoka Realty concerning pipeline support.
Glossary04

Pipeline support agreement
Pipeline support agreements refer to contracts that provide the opportunity to acquire a property from a sponsor in advance of and in priority to a third party.
Fukuoka REIT Corporation 2023

0205

Macroeconomic Environment around Fukuoka

Fukuoka City, where population concentration is increasing, is expected to continue developing.
population of Fukuoka City
Population growth ratio
Compared to the national average, it has a high proportion of young Total
peopleand working-age
population, which leads to(Thousands）

demand for ofﬁce buildings and residences, making it a promising area for investment.
1,650

1,613
1.12

1,600
1,550 0.89

Population Continues to Grow in Fukuoka City

0.89

0.99 1,556 1,570

0.78

The total population of Fukuoka City has increased consistently
since 1985, and as of May 1, 2020, the estimated population
exceeded 1.60 million. This total population makes the city the ﬁfth
most populous among government-designated cities, following
Yokohama, Osaka, Nagoya, and Sapporo. According to estimatesfrom the National Institute of Population and Social Security
Research, the population of Fukuoka City is expected to continue
growing until 2035.

1,642

1,595

1,482

1,497

1,512 1,526

(%)
1.4
1.2

1.11

0.89

0.82

Fukuoka’s Youthful Population1,541 0.95

1,500

1,582

1,632

0.77

0.90

0.8

Fukuoka1,454
City1,466
stands out for its high proportion of young people in
1,450
0.6
1,441
its
population,compared to other cities. Among the cities listed in
1,430
1,400the following table, Fukuoka City ranks ﬁrst with a youth
0.4
0.41 population
rate of 16.8% (percentage of city population aged 15 to 29) and
1,350
0.2
fourth with a working-age population ratio of 61.4% (percentage of152013
to 64).
2007 population
2008 2009 2010 aged
2011 20122014 2015 2016 2017 2018 2019 2020 2021 2022 2023 00city

1,550 0.89

0.89

1,500

1,430

0.99 1,556 1,570
0.89

0.82

0.78

1,454

1.02

1,466

1,482

1,497

1,582

1.4
1.2

1.11
1.0

1,541

0.95

1,512 1,526

0.90

0.80

0.77
0.84

0.8
0.6

1,441

0.4

0.41

0.2

0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Note: Total population figures from 2007 to 2022 are based on figures as of December 1 each year. The
total population figure for 2023 is based on the figure as of October 1, 2023.
Source: Prepared by Fukuoka Realty Co., Ltd., based on data from Fukuoka City Estimated Population
and Fukuoka City Registered Population, published by Fukuoka City

15.5

Chiba

14.5
Sakai

Kobe

Youth population(percentage of city population aged 15 to 29)

8

14.0
Shizuoka

13.5

Kobe
Kitakyushu

6

Youth population:

Osaka

Nagoya55.0

Working-age population: 57.8%

0

59.0

61.0

63.0

65.0

(%)

Working-age population

57.0

59.0

61.0

63.0

(%)

65.0

(percentage of city population aged 15 to 64)

Source: Prepared by Fukuoka Realty Co., Ltd., based on data from the Population Census, Statistics
Bureau, Ministry of Internal Affairs and Communications

Fukuoka City

Tokyo metropolitan area (23 wards)

Osaka

Nagoya

2012

2013

2014

2015

2016

2017

2018

2019

2020

3.79

5

3.07
2.09

2.04

2008

2009

2010

0

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

(forecast)

Notes:
1. The vacancy rates from 2008 to 2022 are based on the figures as of December 31. The vacancy rate in 2023 is based on the figure as of October 31, 2023.
2. The vacancy rate of office buildings owned by FRC in 2023 is based on the figure as of August 31, 2023.
3. Office building–related data for each city are the data for areas and buildings included in surveys conducted by Miki Shoji Co., Ltd.
4. Net absorption (absorption demand) shows the change in the occupied floor space during a specific period. It is calculated by subtracting the occupied floor space on December 31 of the previous year from the occupied floor
space on December 31 of the applicable year. New supply (rental floor space) figures for 2023 have not been finalized, and the floor space and expected completion dates are subject to change.
Source: Prepared by Fukuoka Realty Co., Ltd., based on data from Miki Shoji Co., Ltd., Office Market Data

■ Supply/Demand and Vacancy Rates for Logistics Facilities■ Trend in Rent Unit Price

Demand is expected to remain steady in 2023 and 2024, despite substantial supply.
(Tsubo)New supply

Demand is high in the vicinity of Fukuoka City, and rental prices are generally on the rise.
（％）

Vacancy rate

New demand(Yen/tsubo)

12

3,800

100,000

10

3,600

80,0008

3,400

60,0006

3,200

40,000

4

3,000

2

2,800

120,000

Forecast

Forecast

2021

2022

2023

-15

Contract renewal
Rent gap of 10% or more

2.8
20,000

0.8
1.1

2011

4.37

5

-10

-6
2010

5.78

4.53

0.00

-5

-4

-8

6.30

4.26

10.3

0

(percentage of city population aged 15 to 64)

-2

7.70

-15,000

15

Niigata Hamamatsu

57.0

10

Niigata Hamamatsu

10
53.0

2.75%

20

13.9%

13.0

2

4.28%

Sapporo-10,000

Working-age population

National average

5.49%

Osaka

10.99

3.78

-20,000
55.0

Sendai

15

13.9%

Working-age population: 57.8%

4

2010

2011

2012

2013

2014

Note: The publicly announced price indicates the land price disclosed by the Ministry of Land, Infrastructure, Transport and Tourism as of January 1 of each year.
Source: Prepared by Fukuoka Realty Co., Ltd., based on data from the Ministry of Land, Infrastructure, Transport and Tourism Land Price Survey 2010–2023.

06

Hiroshima
Sapporo

13.0
53.0

5.54%

-5,000

Yokohama

Youth population:

Shizuoka

13.5

Sagamihara

Nationwide

14.0

）

NagoyaData Section

10

Hiroshima

Chiba

Tokyo
metropolitan Sapporo
area (23 wards)
Nationwide

10.86

4.36%
45.82%

Saitama

NagoyaKumamoto

15.0

For commercial land, according to annual fluctuation rates in official prices announced by the
Ministry of Land, Infrastructure, Transport and Tourism for 2023, the national average was 1.8%,
representing a second consecutive year of positive growth. In Fukuoka City, land prices began torise in 2013 ahead of other cities. Alongside the robust office market, progress has been made in
redevelopment projects, and the rate of increase has exceeded that of other cities since 2018.

Sakai

8
11.98

25,000

5.78%

Existing buildings
New buildings0

Demand for16.5
residential land has been strong, particularly in highly convenient areas, due tometropolitan
area
Sendai and Tokyo
Kyoto
robust housing demand amid ongoing improvementin the employment
incomeenvironment.
Osaka
16.0
According toannual fluctuation rates in official land prices in residential
areas announced by the
Okayama
Ministry of Land, Infrastructure, Transport and Tourism for 2023, the national average was 1.4%,
15.5
the second consecutive year of positive growth. In Nagoya
Fukuoka City, Saitama
land prices began to rise in2013 due to15.0
strong housing demandKumamotobrought about by populationYokohama
inflow, and the rate of land
Sagamihara
price increase has risen every year up until 2023.
Fukuoka City

13.23

20

6.10%

Tokyo metropolitan area

Sendai
Osaka
Okayama■ Commercial Land: Year-on-Year Rates of Change in Publicly
Announced Prices

14.5

14.72

30,000Kawasaki(%)■ Residential
Land: Year-on-Year Rates of Change in Publicly
Youth population:
16.8% (ranked 1st)
17.0
FukuokaAnnounced
PricesKawasakiWorking-age population: 61.4% (ranked 4th)

National average

（

15.38

5,000

Kyoto

16.0

0

Fukuoka

35,00015,000

16.5

Kitakyushu

1,350

Central Tokyo (5 wards)

Sustainability

1,400

Youth population

0.99

1,595

Fukuoka

Working-age population: 61.4% (ranked 4th)(%)
(percentage of city population aged 15 to 29)

1,600

1,450

1,619

1,613
1.12

1,642

16.8% (ranked 1st)（%）

As of October 2023

Growth Strategy

1,650

1,632

Vacancy rate (office buildings owned by FRC)

10,000Youth population:

17.0(Thousands）

Vacancy rate (Fukuoka)

40,00020,000Population growth ratio

Net absorption (absorption demand)（Tsubo）

0.84(%)
Total population of Fukuoka City

New supply (rental area)

1.0
0.80

■ Youth and Working-Age Population Ratios Nationwide and in
Major Cities (2020)■ Total Population and Population Growth Ratio of Fukuoka City

■ Fukuoka Business District: Vacancy Rates and Supply and Demand of Office Buildings

Who We Are

1.02

0.99

1,619

2015

2016

2017

2018

2019

2020

2021

2022

2023

0

2016

2017

2018

0.0

0.0

0.0

2019

2020

2021

2022

2023

2024

Note: Refers to medium and large logistics facilities with a total floor space of 5,000 m2 or more in the
Fukuoka metropolitan area.
Source: Prepared by Fukuoka Realty Co., Ltd., based on data from CBRE K.K.

0

2,600

LOGICITY
Minato Kashii

2018

2019

2020

2021

2022

2023

LOGICITY
Hisayama

2024

2025

Note: Refers to large multi-tenant facilities with a total floor space of 5,000 tsubo or more in the Fukuoka
metropolitan area.
Source: Prepared by Fukuoka Realty Co., Ltd., based on data from CBRE K.K.

Fukuoka REIT Corporation 2023

02
07

CEO’s Message

Fukuokaʼs real estate market is robust, so we
can expect to see internal growth. However,rising property prices have prompted a strategic
reassessment for external growth.

Zenji Koike

Co., Ltd., the asset management company for Fukuoka REIT
Corporation (FRC), for a full two years. When I initially tookofﬁce, we were amid the COVID-19 pandemic. However, I am
pleased to report that the situation is gradually returning to
pre-pandemic levels. Throughout the pandemic, we observed
divergent responses and measures on a country-by-country
basis, leading to signiﬁcant ramiﬁcations across various
for us to reassess the magnitude of risks inherent in the rental
property business. Notably, the hospitality and retail sectors
bore the brunt of the pandemicʼs impact. Conversely, theresidential and logistics facilities sectors experienced relatively
minimal disruption. The logistics facilities segment, in particular,
beneﬁted from the surge in e-commerce, driving an increase indemand. The ofﬁce buildings sector underwent a reevaluation
as workstyles diversiﬁed and remote work gained prominence.
This led companies to reconsider the need for expansive ofﬁce
spaces.
Moreover, the COVID-19 pandemic has led to a complete
reset of all our values and conventional wisdom. The paceof structural changes in our business operations, consumer

08

Fukuoka REIT Corporation 2023

Data Sectionindustries. Even in the real estate sector, it became imperative

Sustainability

I have now been serving as the President of Fukuoka Realty

mindset, and work practices has accelerated. This has givenrise to shifts away from pre–COVID-19 norms, demanding acommitment to adapt to emerging information and evolving
paradigms. As an example, the way consumption takes place
and the perception of value in physical retail spaces havechanged, and as such, we anticipate a range of changes inthe value and functions sought after in urban areas. For us,
this underscores the necessity of contemplating real estate
acquisitions from a long-term ownership perspective andpondering how to effectively manage and enhance their value
as properties cherished by the local community and the cityʼs
residents once they are in our possession.
Sales at Canal City Hakata are approaching pre–COVID-19
levels. However, the current status of inbound tourism reveals
that while South Korean tourists have nearly fully rebounded,group tourists from mainland China have not yet returned.
Inbound visitor numbers remain at approximately 60%–70% of
their pre-COVID-19 levels, indicating a decline in this segment.
Inbound tourism from mainland China heavily relied on cruise
ship visitors, so a substantial recovery is anticipated once
these group tourists are permitted to return. Nonetheless, there
are lingering uncertainties about whether everything will returnto the same levels of pre-pandemic prosperity, stemmingfrom the perception that COVID-19 has altered our worldview,
leading to shifts in consumption patterns and behavior.

We recognize the urgency of addressing sustainability andbelieve it is crucial to act promptly and decisively. In termsof the impact on real estate, we anticipate changes thattranscend conventional paradigms and norms, underscoring
the necessity of mitigating associated risks. Our commitment
to sustainability is a key issue (materiality) for FRC that wewill continue to focus on. In June 2023, we strengthened
our Sustainability Promotion Ofﬁce and established a newframework. We appointed a dedicated female expert as
the ofﬁce manager, who previously served as the deputy
manager of the Real Estate Management Department andhas a deep understanding of the intricacies of our properties
owned. This experienced manager is acutely aware of thesigniﬁcance of balancing costs and returns when advancing
sustainability initiatives. At present, we are actively involvedin both qualitative and quantitative analyses aligned with the
Task Force on Climate-related Financial Disclosures (TCFD)
framework, which we endorsed in September 2022. This
includes an examination of ﬁnancial impacts derived fromclimate change scenario analyses. We view endeavors suchas these and transparent information disclosure as integral
components of our operations.
We are dedicated to maintaining strong communication
with all our stakeholders and embracing a customer-centric
approach to our operations (ﬁduciary duty). We constantly
reﬂect on what serves the best interests of our investors.
Consequently, we believe it is vital to efﬁciently manage
our operations internally, while also taking compliance into
account, to serve the interests of our unitholders effectively.

Growth Strategy

As I enter my third year as President, I am acutely
aware of how the COVID-19 pandemic has forced areexamination of our values and conventional wisdom.

Sustainable management is imperative. Our future
growth strategy necessitates proactive initiatives andnew endeavors.

Who We Are

President and CEO
Fukuoka Realty Co., Ltd.

The real estate market in Fukuoka City is showing resilience.
In our property portfolio, we see potential for rent increases inofﬁce buildings, residences, and logistics facilities. According
to Ofﬁce Market Data issued by Miki Shoji Co., Ltd., theaverage vacancy rate for ofﬁce buildings in the Fukuoka
business district stood at 5.78% as of October. This can be
attributed to the impact of newly constructed ofﬁce buildings
in areas such as Tenjin Big Bang, which were completed withvacancies. While the overall vacancy rate in Fukuoka City has
been increasing, it is important to note that the rental rates
have not experienced a decline. Historically, ofﬁce rental rates
in Fukuoka City have shown a consistent upward trend. In
this sense, we believe that in properties owned, particularly
those located in prime city-center locations with favorable
speciﬁcations, there is room for rent increases, contributing tointernal growth.
It appears highly likely that the 10-year Japanese
government bond yields will increase to around 1%. We will
carefully consider appropriate measures in response to this.
In our reﬁnancing efforts, we will focus on controlling the costof ﬁnancing by reviewing terms such as the loan duration andcomparing them to the conditions before reﬁnancing. Our aim
is to minimize the impact of rising interest rates to the greatest
extent possible. Our relationships with ﬁnancial institutions,
including our sponsor banks, are exceptionally strong, and webelieve that we will continue to achieve stable funding in the
future.
The challenges currently recognized by FRC and Fukuoka
Realty Co., Ltd., center on the persistent upward trajectory ofreal estate prices in Fukuoka, resulting in a highly competitive
acquisition landscape. We are currently navigating ademanding phase in achieving the conventional method ofexternal growth for REITs, which involves the steady acquisitionof new properties to expand our asset base. Moreover, there
is a rising investor demand for sustainability-driven initiatives.
As a result, we believe it is opportune to explore new growthstrategies as a REIT, focusing not only on acquiring properties
but also on property rotation at suitable valuations and realizing
latent gains in existing properties to ensure the continuous andstable distribution of income to investors while aligning withevolving sustainability expectations.
To continue contributing to urban development and regional
betterment in the Fukuoka and Kyushu regions, which wetarget for investment, it is essential to receive fair recognition
as a REIT and to sustain our growth in the future. It is also
necessary to undertake property rotations as needed and toembark on new initiatives. To achieve these objectives, it is

crucial to sustain dividend growth while contributing to thegrowth of key metrics such as the investment unit price, which
in turn contributes to the growth of our market capitalization.
This is essential to garner continued support from investors.
We believe that internal growth in our properties owned isparticularly achievable in the ofﬁce building, residence, andlogistics facility segments. In ofﬁce buildings, there is a positive
rental gap (difference from market rent) of 12.5% in theproperties held by FRC, which we consider to be a promisingsource of future internal growth. In the continuously growing
population of Fukuoka, we believe that there is still room forrent increases in the residential property market. The logistics
facility market has seen a consistent upward trend in rental
rates, so we anticipate room for growth in this segment. In theretail sector, our ﬂagship property, Canal City Hakata, prompts
considerations regarding the future recovery of inboundtourism and the impact of renovations. Nevertheless, we see
potential for positive developments in this regard.

02
09

CEO’s Message

Specific initiatives being undertaken are outlined below.

◎Extending the tenure of full-time officers and employees of the Asset Management Company
In 2018, Fukuoka Realty was certified as a “Fukuoka ʻWork Style Reformʼ Promotion Company” and has since beencommitted to expanding and enhancing work-style reforms.
As of August 31, 2023

Number of full-time officers and employees*

47

Average number of years of employment

8 years and 3 months

1*1. The number of full-time officers and employees indicates the total number of directors and auditors, permanent employees, contract employees,
temporary employees, secondees, etc., who are employed on a full-time basis at Fukuoka Realty Co., Ltd.

◎Ratio of male and female full-time officers and employees
In line with efforts to improve the workplace environment for both men and women and promote their active participation,
personnel systems are being expanded, and a strategic shift in employee mindset is being fostered. Training programs
tailored to respective positions are being conducted accordingly.
As of August 31, 2023

Full-Time Officers and Employees:
Percentage of male and female employees*2

Male: 44.7％ Female: 55.3％
Sustainability*2. The gender ratio is calculated as the ratio of males and females to the number of full-time personnel.

◎Increasing the percentage of qualified employees

As of August 31, 2023

Number of credentialed personnel

Zenji Koike President and CEO, Fukuoka Realty Co., Ltd.
ProfileReal estate brokers:

23

CMAs:

3

ARES Certified Masters:

22

First-classregistered architects:

3

Real estate appraisers:

3

Certified Building
Administrators:

5

Joined Fukuoka SOGO Bank
(currently The Nishi-Nippon City Bank, Ltd.)

1991

Joined Fukuoka Jisho Co., Ltd.

2013

Appointed as Chairman of Canal Entertainment Works Co., Ltd.
(currently FJ. Entertainment Works Ltd.)2017

Appointed as Senior Executive Officer of Fukuoka Jisho Co., Ltd.
Appointed as Chairman of Sunlife Co., Ltd.

Past seminars

2021

Joined Fukuoka Realty Co., Ltd.
Appointed as President and CEO of Fukuoka Realty Co., Ltd.
(current position)

・Training to learn how to balance caregiving and work responsibilities

Appointed as Executive Director of FRC in May (current position)

2

Attorney:

1

Licensed Representative of Condominium
Management Company:

1◎Systems supporting work-life balance (maternity, childcare, and caregiving)

1988

2022

MBAs:

Data Section

10

At Fukuoka Realty, human capital is recognized as the most important asset. Efforts are made to create a workplace where
diverse values and expertise are enhanced, allowing each employee to make the most of their abilities and expertise,irrespective of age, gender, or career background.
For instance, steps are being taken to improve the office environment, with a focus on providing and promoting a
comfortable working atmosphere, while personnel systems are undergoing reform. Furthermore, the education system for
employees is being expanded, and qualification acquisition is actively encouraged to enhance the quality of operations.

To support employees in acquiring the skills and knowledge necessary for their tasks, a one-time bonus is provided for
obtaining certifications recognized by the company. Furthermore, a variety of training programs are implemented throughexternal organizations.

Place of birth: Fukuoka City Hobbies: Running, golf

The essence of our business lies in our human capital. Our
goal is to attract and retain talented individuals who contributeto the company and stay with us for the long term. However, intodayʼs environment, talent mobility has increased signiﬁcantly,
and the barriers to changing jobs are lower than in the past.
As a result, we understand that a certain level of employee
turnover is unavoidable. On the other hand, in terms of newhires, we are fortunate to attract individuals with diverse
experiences and are committed to bringing in fresh talent tostrengthen our organizational capabilities. For this purpose, weare reviewing our human resources system to make it morealigned with current needs.

◎Approach to human capital at Fukuoka Realty Co., Ltd.

Growth Strategy

Strengthening human capital is crucial for the growthof FRC.

While the enhancement of human capital is garneringsocietal attention, we believe there is still much more for us
to accomplish in this regard. To achieve this, it is essential
to consistently implement measures such as creating a
comfortable working environment, providing rewarding
conditions and personnel systems, and investing in educationand development for growth.
As we approach our 20th anniversary in December 2023,
we are determined to foster a strong sense of loyalty anddedication among our employees. Our goal is to create anorganization where individuals can achieve personal growth,career advancement, and a stable foundation for their lives.
In the ever-changing landscape of society and technologicaladvancements, including regenerative AI, it is crucial for eachof us to stay well-informed and grounded, and identify how
we can contribute through real estate, including our ESG
initiatives. Sincerity and dedication are our guiding principles
in approaching all endeavors. We emphasize the importanceof enhancing the value of each individual real estate property,
making informed decisions about new real estate investments,
and pursuing investments that align with our capabilities.
We remain committed to diligent efforts for growth,
adopting various functional strategies while maintaining ﬁscal
responsibility.
I have learned many valuable lessons in my two years aspresident. Drawing from these experiences, my personal goalmoving forward is to continue putting in more effort and striving
for growth. This is a signiﬁcant challenge that I have set formyself. I would like to express my sincere gratitude to all our
stakeholders for their ongoing support.

Who We Are

The acquisition strategy of FRC is centered on the “actlocal” aspect of our mission, “Act Local, Think Global.”
When looking at the entire Kyushu region, one example ofthis approach is our keen interest in the expansion of Taiwan
Semiconductor Manufacturing Company into Kumamoto,as it holds potential for future growth. Our sponsor, Fukuoka
Jisho Co., Ltd., shares our proactive approach to various realestate developments, and we plan to collaborate with them on
various information gathering initiatives and long-term efforts
as a REIT.
Recently, I visited three cities and towns in Kumamoto̶
Kikuyo Town, Otsu City, and Koshi City̶inspired by ourparticipation in hometown tax payments. The purpose was
to extend support to municipalities across Kyushu as a
REIT that focuses on Fukuoka and Kyushu. Last year, I had
the opportunity to meet with the governors of Kumamoto
and Kagoshima prefectures, when we exchanged views on
urban development. While we own properties in the capitalsof various Kyushu prefectures, we recognize that theseconnections alone might not provide us with a comprehensive
understanding of the regional circumstances.
To foster future growth, engaging in direct dialogue withgovernment ofﬁcials and exchanging ideas about what isneeded for urban development and regional contributions
in Kyushu will be invaluable for us. In addition, it is crucial
to extend our focus to regions not currently covered by our
REIT investments. We maintain a strong relationship with our
main sponsor, Fukuoka Jisho. We believe that it is essential
to focus on gathering information, identifying local challenges,
and understanding what kind of real estate the region requires
over the long term for the locations that Fukuoka Jisho aims
to develop. More speciﬁcally, this includes industrial properties
such as factories, public facilities, and ventures in the
agricultural sector that could potentially be integrated into our
REIT scheme in the future. We believe it is essential to possess
the capacity to thoroughly research these possibilities.

In addition to organizational support, training programs are designed to assist employees in achieving a balance between workand family life. The objective is to prevent them from being compelled to leave their positions due to childcare or caregiving
responsibilities by providing the essential skills to sustain their work, along with insights from experienced colleagues.

・Seminar for women working with time constraints, including those returning from childcare leave and using flexible
hours (working mothers).

Fukuoka REIT Corporation 2023

0211

Value-Creation Story

Promote Attractive Urban Developmentin the Fukuoka and Kyushu Areas

Urban
GrowthGreater
Quality ofLife

Who We Are

Input
Financial
capitalOutput and Outcome

Business Model

Total 35 properties

Building of a solid financial base throughconservative control of LTV• LTV …………………………………… 42.4%• Fixed rate……………………………… 92.8%

Research

Act Local,
Think Global

 Macro environment
surrounding Fukuoka

See p.6na g

M a t e a lit yrieme

s a ledn, a nnt, valuatios / R e p la c e m e n tExternal Environment

Residences 6 properties

Social relationship capital

Logistics 4 properties• Human resource exchanges with sponsors(e.g., 3 people accepted from sponsors,
9 people dispatched to sponsors)• Improvement of office environments(introduction of meeting booths, plants
and other greenery)• Implementation of the COVID-19 tenant
support measures (assistance withvaccinations as requested and other support)

See p.16

Response to ESG issues
Sustainability
SocialResponse

See p.24

Environmental
Response

See p.28

See p.36

Corporate
GovernanceSee p.38

Risks and Opportunities• Ongoing population growth in Fukuoka

Intellectual capital• Number of IR interviews during the year
In Japan 171, Abroad 40 (including
telephone conferences)• Track record of winning awards
IR Excellent Company Encouragement Award(2014) / Nikko Excellent IR Website Award (2022)

Natural capitalSee p.18• Ratio of young and working-age people

Hotels 2 properties• Green building certification rate (total floor
space basis) 80.3％• Reduction of electricity usage andwater consumption at properties owned
Electricity usage reduced by 8.3%
compared with 2019
Water consumption reduced by 16.2%
compared with 2019

＜Commercial and Hotel＞
・Provide new discoveries for users and enhance satisfaction (e.g., first store in Kyushu)
・Revitalize interaction with surrounding regions through community-based initiatives
・Make it fun to go out and invigorate regional interaction＜Logistics＞
・Increase convenience for the general public by upgrading local distribution networks

Total tenants in all properties: 1,018• Customer satisfaction surveys at retail facilities• Tenant satisfaction surveys

12

Sustainability See p.24

Employees

Employee Initiatives See p.36

・Improve experiences through human resource exchanges and rotation
・Increase motivation through participation in urban development
・Enhance personal connections and capabilities based on various experiences
through connection with society
・Boost employeesʼ job and personal satisfaction through a focused human resource strategy
・Enhance systems that enrich peopleʼs lives and encourage them to remain in service for longer

Unitholders/
Financial Institutions

External Environment(Initiatives of Fukuoka City) See p.16

Sponsors

External Environment(Initiatives of Fukuoka City) See p.16

・Create investment opportunities in realInvestment Strategy See p.20
estate in the Fukuoka and Kyushu areas
・Convey the appeal of the Fukuoka and Kyushu areas by enhancing information disclosure
・Ensure the stable return of profits and secure opportunities for growth throughappropriate investment and management in response to unitholder feedback
・Maintain good relationships with financial institutions and ensure the appropriate
return of profits

Investment Strategy See p.20
・Provide funding for new property development
・Support developments over the medium to long term that lead to local advancement
・Engage in collaborative projects to enable efficient and productive property management
・Strengthen development and operational capabilities through ongoing information exchange
・Bolster human capital through human resource exchanges

Environment/
NatureEnvironmental Initiatives See p.28

・Promote environmental conservation through investment in properties with highenvironmental performance・Contribute to sustainability in the Fukuoka and Kyushu areas over the medium tolong term through active participation
・Co-create in harmony with nature through proactive environmental initiatives in thereal estate market
・Engage in real estate development that takes advantage of the nature found in Kyushu

Note: As of August 31, 2023

Related Stakeholders
Clients/Tenants

Management Strategy See p.21
Initiatives for
Local Communities See p.37

Data Section• Energy, water, air, and other natural resources
used in the operation of properties owned• Natural environment and biodiversity in theareas around properties owned

Ma＜Office Buildings＞
・Create business opportunities, attract companies from other countries and otherregions in Japan, and establish a place for start-ups to flourish＜Commercial＞
・Increase users, create employment, and generate synergies between tenants(differentiate from shopping centers)

Sustainability

Naturalcapital

Office buildings 12 properties

Initiatives for Facility and Building
Management See p.30

Region and Society• Number of qualification holders:
Real estate brokers 48.9%
out of 47 full-time officers and employees /ARES Certified Masters 46.8%
out of 47 full-time officers and employees

See p.26• A varied skill set formed through humanresource training• Experience and knowledge of IR
activities based on long years of practicalimplementation• Gathering of information deeply rooted in local
communities• Co-creative and trusting relationships withtenants• Cooperative framework with property
management (PM) companies• Coordination with local society, local communities• Maintenance of good relationships of trustwith sponsors

4.9%
48,478 million yen
185,197 yen

Management Strategy See p.21

Clients/Tenants

Growth Strategy

Socialrelationshipcapital• NOI yield• Unrealized gain
• NAV per unit

Human capital*Fukuoka Realty Co., Ltd.

Intellectual
capitalRetail 11 properties

Management

Human
capital• Excellent human resources with specialized skills• Support framework for flexible working styles• Support system for career development• Number of full-time officers
and employees*: 47• Number of qualification holders*:
Real estate appraisers 3 / Attorney 1 /First-class registered architects 3 / MBAs 2

Manufacturing capitalss strate
gy
sine
u
B

stable cash flow over the long term

Financial capital• TSR for past 10 years Annual rate 9.9%
• Dividend per unit
3,753 yen /Average interest rate paid 4.6%
• Credit ratings JCR: AA- (stable), R&I: A+ (stable)

Acquisition

Manufacturing
capitalFinding excellent properties that can generate

Value Creation with Stakeholders

Region and Society

Population of the 6 prefectures
we have properties in: Approx. 11,722,000• Organizing community and other events utilizing facility common areas• Active participation in the Hakata Town Planning Promotion Councilʼsactivities• Announcement of financial results by the Fukuoka Stock Exchange

Employees

Number of full-time officers
and employees: 47• Various employee education systems• Employee satisfaction surveys• Career interviews with employees

Unitholders/Financial Institutions
No. of unitholders: 14,164
No. of financial institutions we deal with: 22• General Meeting of Unitholders• Results briefings for investors• 1-on-1 meetings (Japan and overseas)

Sponsors
Sponsors: 9• Contribution of excellent
properties• Ongoing information exchange• Human resource exchanges

Environment/Nature
Property location/Six prefectures(Fukuoka/Saga/Kumamoto/
Oita/Kagoshima/Okinawa)• Environmental preservation (Electricity
and water conservation)• Green Building certification

Glossary

TSR
An abbreviation for Total Shareholder Return.
This can also be called total shareholder(investor) yield and reflects combined capitalgains and dividends, reflecting the overall
investment yield for investors.
[Calculation method] TSR (%): ((Dividend perunit + Increase in investment unit price) / Initialinvestment unit price) × 100
Fukuoka REIT Corporation 2023

0213

Value-Creation Activities
Acquisition

ss strate
gy
sine
Bu
Management

Research

Act Local,
Think Globalna gFinancial Strategy

Management Strategy See p.21
Fund procurement (financing)

Information communication (IR/SR)

Research

Acquisition

Management

Human resources who are familiar
with the area and have built trusting
relationships collect high-quality
information on properties fromsponsors and the community

Acquisition of excellent real estatein the Fukuoka and Kyushu areas
through sponsor companies andlocal communities

Constant forward-looking
management with an attention
to detail unique to a regionspecific REIT

See p.22

Who We Are

Ma

Investment Strategy See p.20

M a t e a lit y
ri

nd
eme
nt, valuation, as al es / R e pl a c e m e nt

External Environment
Response to ESG issues
Sustainability

Environmental Issues

Social Issues

Organizational Issues

Strengths andcharacteristics of thevalue-creation process• Property appraisal skills unique to a
local person• Robust network• Discovery and acquisition ofproperties that can generate stable
cash flow• Market research and analysis• Improvement of property value• Asset portfolio expansion andrealization of high occupancy rates

Related capital(know-how)• Social relationship capital(relationships of trust, cooperation,and collaboration)(natural environment)• Diversification in fund procurement• Discovery of excellent properties
using networks we created

See p.20• Human capital• Natural capital(discerning eye, expertise)• Employment of exceptional humanresources required for suitablebusiness execution(management know-how/performance)• Management focused on longterm fixed interest rate entities andfinancial stability• Maintenance of NOI in existing
properties• Management that emphasizes thebest interests of unitholders• Essential environmental initiatives

See p.20

Data Section

Challenges and initiatives
to further strengthen
value creation• Human capital(relationships of trust,cooperation and collaboration)• Financial capital(relationships of trust, cooperationand collaboration)(excellent properties)• Social relationship capital• Realization of stable distributions
and dividends• Social relationship capital• Manufacturing capital(know-how)• Derive maximum value from our realestate portfolio over the long term(know-how)(financing ability)• Human capital• Sound financial position• Human capital• Financial capital(information-gathering
ability)• Stable cash flow

Sustainability• Intellectual capital

Portfolio management from a medium- to long-term
perspective and appropriate financial strategies

Growth Strategy

Risks and Opportunities

Management,
Valuation, and Sales/
Replacement

See p.21

See p.22

Related Stakeholders
Clients/Tenants
Total tenants in all properties: 1,018• Customer satisfaction surveys at retail facilities• Tenant satisfaction surveys

14

Region and Society

Population of the 6 prefectures
we have properties in: Approx. 11,722,000• Organizing community and other events utilizing facility common areas• Active participation in the Hakata Town Planning Promotion Councilʼsactivities• Announcement of financial results by the Fukuoka Stock Exchange

Employees

Number of full-time officers
and employees: 47• Various employee education systems• Employee satisfaction surveys• Career interviews with employees

Unitholders/Financial Institutions
No. of unitholders: 14,164
No. of financial institutions we deal with: 22• General Meeting of Unitholders• Results briefings for investors• 1-on-1 meetings (Japan and overseas)

Sponsors
Sponsors: 9• Contribution of excellent
properties• Ongoing information exchange• Human resource exchanges

Environment/Nature
Property location/Six prefectures(Fukuoka/Saga/Kumamoto/
Oita/Kagoshima/Okinawa)• Environmental preservation (Electricity
and water conservation)• Green Building certification

Fukuoka REIT Corporation 2023

0215