Fukuoka REIT Corporation
Q&A Summary for the 32nd Fiscal Period (Period Ended August 2020)
Earnings Briefing Session for Institutional Investors/Analysts
Date: October 19, 2020 (Mon.), 3:30pm – 4:10 pm (web conference)
Q1 Is the risk of further tenant departures at retail properties and hotels increasing? Has
the worst period passed?
A1 The risk of further tenant departures at retail properties and hotels is not increasing.
The worst period is believed to have been April and May of this year at the time oftemporary closure under the state of emergency.

Q2 You said that property acquisitions will focus on offices and logistics facilities. In light of
the impact of COVID-19 infection, is there any change regarding your perspective onacquisitions?
A2

No, there have been no changes regarding our perspective on acquisitions due to theimpact of COVID-19 infection.

Q3

It appears that the vacancy rate of offices in Fukuoka City is increasing for small andmedium-sized buildings. Is this due to the performance of companies being negatively
impacted by COVID-19 infection? It seems that the rate of implementation of remote
work is considerably low.

A3The rise of the vacancy rate for small and medium-sized office buildings is believed tobe caused by the deterioration of performance of small and medium enterprises due tothe impact of COVID-19 infection.

Q4 Is the closing of LAOX at Canal City Hakata due to a direct impact of decreased inboundcustomers from COVID-19 infection? If so, going forward, will Canal City Hakata review
its sales structure that emphasizes inbound customers and shift to a strategy that
focuses on domestic customers for the entire retail facility including the hotel?
A4The closing of LAOX at Canal City Hakata is due to the maturation of the 5-year fixedterm lease agreement. As for the entire retail facility of Canal City Hakata, in the 33rdand 34th periods, we will firmly target domestic customers in the nearby area as wellas in the wider area. When inbound demand eventually recovers, we intend to make

sure to also incorporate this demand.

Q5 Operating revenues for the 32nd period came in below the forecast. Did you consider
covering this with property sales or other means? Moreover, if operating revenues
underperforms the forecast in the future, would you consider property sales and such tocover operating revenues?
A5 The reason operating revenues came in below the forecast is the reduction of fixed rent
given the governmentʼs declaration of a state of emergency. On the other hand,regarding dividends, we are reducing costs in outsourcing fees and repair andmaintenance expenses, etc. in order to protect forecast distributions. If dividends appear
to be falling below what is forecast going forward, we will consider property sales as anoption.

Q6 It is indicated on page 11 of the analyst meeting materials that sales of Canal City Hakata
recorded a year-on-year decrease in the 32nd period. What are the projections for the33rd and 34th periods? What is forecast for Canal City Hakata, Park Place Oita, andother retail properties? Are the estimates somewhat conservative?
A6 The following is the forecast of sales for each property in the 33rd and 34th periods.
Estimates are conservative, as can be seen.
Property name33rd period sales

34th period sales

Comparison with 31st period Comparison with 30th period
Canal City Hakata
Canal City Hakata・B

Mid 60% range

Lower 70% range

Lower 90% range

Lower 90% range

Park Place Oita
Konoha Mall Hashimoto
SunLive City Kokura*As sales for the 32nd period were impacted by COVID-19 infection, forecast sales for the34th period are compared with the 30th period, which corresponds to the same period twoyears past.
*This material contains statements on future business performance, plans, management targets, and strategies, etc. These forward-looking
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 Corporationand Fukuoka Realty Co., Ltd. do not guarantee their respective future performances described in this material or explanations based on thismaterial. Although Fukuoka REIT Corporation and Fukuoka Realty Co., Ltd. have prepared this material based on information that is believed tobe reliable, no guarantee is made as to the accuracy, rationality, or completeness of the content. Please note that all the descriptions of thismaterial are effective as of the date when this material was prepared, and may be subject to change without prior notice. This material is solely
for the purpose of providing information to investors, and is not intended for soliciting investment or other activities. When making a final decision
on investment, investors are kindly requested to do so based on their own judgment and responsibility, fully recognizing and understanding theinvestment-related risks including a decrease in investment value.