Fukuoka REIT Corporation
Q&A Summary for the 35th Fiscal Period (Period Ended February 2022)
Earnings Briefing Session for Institutional Investors/Analysts
Date: April 15, 2022 (Fri.), 5:00 PM – 5:47 PM (web conference)
Q1

What do you anticipate will be the impact on sales of your tenants from the opening ofLaLaport Fukuoka? Also, what of the impact on SunLive City Kokura from the openingof THE OUTLETS KITAKYUSHU?

A1

We expect that, of the properties we own, Canal City Hakata will be most affected by
the opening of LaLaport Fukuoka. We assume there will be an impact on sales
immediately after the opening and for a year or so after that. We also anticipate that
SunLive City Kokura will be somewhat affected by the opening of THE OUTLETSKITAKYUSHU. However, we believe that the impact is fairly limited, partly because salesof SunLive City Kokura have improved significantly due to renovation conducted lastyear.

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Q2

With regard to setting the lower limit of dividend at 3,500 yen per unit, the best way
to bolster it should be to improve earnings from existing properties. If that is notpossible, however, which do you place priority on, property acquisition or return ofunrealized gains through selling properties?

A2

Our priority is on property acquisition. Property sale is positioned as one of the options.
In any case, we will conduct appropriate operations to keep the lower limit of 3,500
yen per unit and proactively investigate new property acquisition.

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Was the cancellation by tenants at Higashi Hie Business Center due to individual reasonsspecific to them? Do you see any sign of move-outs by large tenants in the entire
market or at properties within FRCʼs portfolio?

A3

Compared with Tokyo, we find fewer moves of cancellation due to the impact of remote
work in office spaces in Fukuoka. The cancellation at Higashi Hie Business Center wasdone for an individual corporate group and the specific reason of reducing office space
based on the company-wide policy of the tenants. As we observe no similar trend withother tenants, we think it is fully possible to fill the vacated space and it may be a good
opportunity to shrink the rent gap.

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Q4

With regard to your dividend, it has remained stable at 3,500 yen per unit over recent
fiscal periods. In your view, what will be needed for the dividend level to rise to 3,600
yen or 3,700 yen in the future? Will the level increase in a natural manner as COVID19 is contained? Or are you going to accelerate external growth, etc.?

A4

In order to raise dividends, it is first necessary to promote internal growth such aslarger sales at retail properties and rent increase for offices. However, we believe thatexternal growth is the most important factor. We intend to acquire excellent properties
to achieve the target asset size of 250 billion yen, leading to higher dividends.

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Q5

In your external growth strategy, my understanding is that you will continue acquiringproperties centering on office buildings and logistics facilities, but is there any possibilityof acquiring hotels that employ variable rent or retail properties, etc., in anticipation of
the containment of COVID-19 going forward?

A5

The asset types for which we will preferentially investigate acquisition are officebuildings, logistics facilities and residential properties. We would like to conduct
property acquisition with a target of setting the ratio of retail properties at 50% or less.
As for acquisition of hotels and retail properties, it is not that there is no possibility, but
the priority is rather low for the moment.

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Q6

Concerning Higashi Hie Business Center, I see you are going to conduct full-scale leasing
activities in order to lease the vacated space as soon as possible. Can you tell me about
the responses or reactions you have received from candidate tenants for now? Given
the demand for office space in Fukuoka, is there no need to worry about the vacantperiod prolonging, etc., and can we expect an upside gain due to elimination of the rentgap?

A6

We started leasing activities for Higashi Hie Business Center in April. The responses are
not bad, and we have received several inquiries. We started invitation of tenants at arent level above the current level and based on market rent. As the property is a highly
competitive building with a wide standard floor area and is directly connected to a
subway station, we think the vacancy will be filled in a short time in consideration of

the office market in Fukuoka. We have also factored in a certain period of vacancy forthe property.
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Q7

Regarding the percentage-of-sales rent of Canal City Hakata, if its sales have recovered
to the same level as in 2019, what will the degree of impact on rent increase be? Inaddition, if the effect of the opening of a new subway station is taken into account, towhat degree do you anticipate sales to recover compared with 2019?

A7

Aside from the impact of COVID-19, there are multiple factors, such as renewal of theproperty including tenant replacement, the opening of a new subway station and theopening of LaLaport Fukuoka. Accordingly, it is difficult at the moment to quantify theassumed increases in sales and rent. For Canal City Hakata, our top priority is placedon maintaining earnings through work to respond to diversification of consumption andproviding new experiential value as we present new contents and a new grand design
to customers.

－－－－－－－－－－－－－－－－－－－－－－－－－－－－－－－－－－－－－－－－－－－－*This material contains statements on future business performance, plans, management targets, and strategies, etc. These forwardlooking statements are based on the latest judgments made by Fukuoka REIT Corporation and Fukuoka Realty Co., Ltd., and the actual
results of Fukuoka REIT Corporation may differ materially from those in the forward-looking statements due to various factors.
Therefore, Fukuoka REIT Corporation and Fukuoka Realty Co., Ltd. do not guarantee their respective future performances described inthis material or explanations based on this material. Although Fukuoka REIT Corporation and Fukuoka Realty Co., Ltd. have preparedthis material based on information that is believed to be reliable, no guarantee is made as to the accuracy, rationality, or completenessof the content. Please note that all the descriptions of this material are effective as of the date when this material was prepared, andmay be subject to change without prior notice. This material is solely for the purpose of providing information to investors, and is notintended for soliciting investment or other activities. When making a final decision on investment, investors are kindly requested to doso based on their own judgment and responsibility, fully recognizing and understanding the investment-related risks including adecrease in investment value.