18 th Fiscal Period
Report on Performance andManagement Status (Semiannual Report)
March 1, 2013 to August 31, 2013

1-2-25 Sumiyoshi, Hakata Ward, Fukuoka City
http://www.fukuoka-reit.jp

I. Overview of Fukuoka REIT Corporation
To Our Unitholders
We would like to express our sincere appreciation to all unitholders fortheir continued support of Fukuoka REIT Corporation (FRC).
We are pleased to report on the performance results and management
status of FRC for the eighteenth fiscal period (March 1, 2013 to August
31, 2013).
FRC started as Japan's first REIT specializing in regional properties.
Its mission is to raise capital for the Fukuoka and Kyushu areas fromJapanese and overseas prime investors by incorporating high quality
properties, and thus contribute to the vitalization and enhancement of theattractiveness of the urban landscape of the areas. Since our listing in June
2005, we have exhibited steady growth and achieved stable performancethrough the support of our unitholders and sponsor companies.

Masayasu Saki

Etsuo Matsuyuki

CEO & Representative Director
Fukuoka REIT Corporation

CEO & Representative Director
Fukuoka Realty Co., Ltd.

During the eighteenth fiscal period, the Japanese economy showedsome advances for autonomous recovery, thanks to the economic policies of the government led by Prime Minister Shinzo
Abe and other factors. We observed production to increase gradually, corporate performance and the employment situation
to improve, and exports and consumer spending to pick up. Looking ahead, with the various political measures noticeably
proving effective, improvement in corporate earnings is expected to bring about an increase in household income andinvestment, causing the economy to head for recovery. The Kyushu area, the core investment target area for FRC, also shows
an improving economic trend and is picking up as a whole, from production and capital investment to employment andconsumer spending. As for the land price trend, the national average was still decreasing but the rate of decrease continued toshrink over the past year, according to the government's Prefectural Land Price Survey 2013. The recovery trend of land prices
strengthened in Fukuoka City, the central area of FRC's investment targets, primarily in the urban areas, with commercial land
prices and residential land prices both taking an upward turn and increasing by 2.3% and 0.7% year-on-year, respectively.
Under such circumstances, FRC increased its capital by approximately 10.6 billion yen by issuing new investment units in
March 2013. After entering 2013, it acquired Tenjin Nishi-Dori Center Building (acquisition price: 2.6 billion yen) on February
1, D-Wing Tower (acquisition price: 2.8 billion yen) and Hotel FORZA Oita (acquisition price: 1.53 billion yen) on March 1, andTenjin North Front Building (acquisition price: 2.8 billion yen) on March 28. As for existing properties, FRC continued its efforts
to reinforce the competitive advantages and the ability to attract guests of major retail facilities.
As a result of these endeavors, FRC posted operating income and net income that both surpassed forecast for the fiscal
period under review, and declared 16,458 yen per investment unit for cash distribution.
Going forward, FRC is resolved to exert its strengths as a REIT specializing in regional properties and quickly respond tomarket changes, while receiving support and cooperation from powerful sponsors who are leaders in the Kyushu businessworld. As we do so, we will strive to achieve stable growth of our portfolio in the medium- to long-term and secure stableearnings through steady asset management.
We greatly appreciate your continued support and cooperation.

CONTENTS
I.

Overview of Fukuoka REIT Corporation
To Our Unitholders
Financial Summary
ProfileIncrease in the Size of Assets under Management
Environmental Initiatives

1
2
3
5
5

II. Semiannual Report
III. Independent Auditor's Report
IV. Balance Sheets
V. Statements of Income
VI. Statements of Changes in Net Assets
VII. Cash Flow Statements
VIII. Notes to Financial Statements

FUKUOKA REIT CORPORATION

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6
23
24
26
27
28
29

I. Overview of Fukuoka REIT Corporation

Financial Summary
Financial Highlights for 18th Fiscal Period (ended August 2013)
Dividend per unit was 16,458 yen, surpassing the previous period’s amount by 169 yen.
Category

14th fiscal period

15th fiscal period

16th fiscal period

17th fiscal period

18th fiscal period

March 1, 2011 toAugust 31, 2011

September 1, 2011 to
February 29, 2012

March 1, 2012 toAugust 31, 2012

September 1, 2012 toFebruary 28, 2013

March 1, 2013 toAugust 31, 2013

Operating revenues

mm yen

7,045

6,931

7,094

7,200

7,565

Leasing NOI (Note 1)
Depreciation and amortization
expenses
Operating income

mm yen

4,406

4,351

4,372

4,444

4,751

mm yen

1,164

1,177

1,242

1,268

1,343

mm yen

2,729

2,637

2,595

2,622

2,848

Ordinary income

mm yen

2,083

2,046

2,005

2,005

2,272

Net income

mm yen

2,082

2,045

1,992

2,004

2,271

yen

16,922

16,621

16,193

16,28916,458units

123,050

123,050

123,050

123,050

138,000

Total assets (at end of period)

mm yen155,657

155,792

159,601

160,574

167,857

Total net assets (at end of period)

mm yen71,25971,222

71,17071,182

81,712

Days in fiscal period
Number of properties owned

days

184

182

184

181

184

17

17

19

20

23

Dividend per unit
Number of investment units
outstanding (at end of period)(at end of period)

Number of tenants (at end of period) (Note 2)

502

515

701

751

886

Total leasable floor space (at end of period)m2

425,906.83

425,773.30

445,001.37

448,867.34

466,824.38

Occupancy rate (at end of period) (Note 3)

%

99.6

98.1

97.0

99.3

98.8

(Note 1) “Leasing NOI” is calculated using "Leasing business revenues - Expenses related to leasing business + Depreciation and amortization expenses".
(Note 2) “Number of tenants” is based on the total number of sections stipulated in the tenancy agreements for properties owned. For the number of tenants in pass-through master leasing properties, thetotal number of sections stipulated in the tenancy agreements with end tenants is shown.
(Note 3) “Occupancy rate” refers to the percentage of total leased floor space at end of period to total leasable floor space at end of period.

Business Forecasts for 19th and 20th Fiscal Periods
Category

18th fiscal period

19th fiscal period

20th fiscal period

March 1, 2013 to August 31, 2013

September 1, 2013 to February 28, 2014

March 1, 2014 to August 31, 2014

Results

Forecast

Forecast

Operating revenues

mm yen

7,565

7,556

7,661

Leasing NOI (Note)

mm yen

4,751

4,736

4,750

Depreciation and amortization
expenses

mm yen

1,343

1,364

1,393

Operating income

mm yen

2,848

2,803

2,777

Ordinary income

mm yen

2,272

2,236

2,208

Net income

mm yen

2,271

2,235

2,207

Dividend per unityen (1)

16,458--

Latest dividend forecast per unityen (2)

16,20016,20016,000Difference from forecast

yen (1)-(2)

+258

-

-

138,000--

Number of investment units
outstanding (at end of period)(Note)

units“Leasing NOI” is calculated using "Leasing business revenues - Expenses related to leasing business + Depreciation and amortization expenses".

FUKUOKA REIT CORPORATION

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I. Overview of Fukuoka REIT Corporation

ProfileStatus of the Investment Corporation
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 Class A office buildings in which it invests throughout all of Kyushu, with acentral focus on Fukuoka, and in Yamaguchi Prefecture and Okinawa Prefecture utilizing our strength of knowing the local
characteristics of real estate, which is a very regional-specific business.

Overview of the Investment Corporation
Name:

Fukuoka REIT Corporation

Representative:

Masayasu Saki, CEO & Representative Director

Asset manager:

Fukuoka Realty Co., Ltd. (Fukuoka Local Finance Branch Bureau (financial instruments) No. 10)

Listed date:June 21, 2005 (Tokyo Stock Exchange, and Fukuoka Stock Exchange)

Sponsors

5%
The Bank of Fukuoka, Ltd.

50%
Fukuoka Jisho Co., Ltd. (Note)

5%

5%

5%

The Nishi-Nippon City Bank, Ltd. Development Bank of Japan Inc.

Outsidedirector

Outsidedirector

Fukuoka Realty Co., Ltd.
(Asset Manager)

Saibu Gas Co., Ltd.

10%
Kyushu Electric Power Co., Inc.

5%

5%

5%

5%

Kyudenko Corporation

Nishi-Nippon Railroad Co., Ltd.

Kyushu Railway Company

Royal Holdings Co., Ltd.

(Note)

Concluded MOU with Fukuoka REIT Corporation and Fukuoka Realty Co., Ltd. concerning pipeline support.

Financial Highlights
Total assets

167.8 bn yen (as of August 31, 2013)

Total debt

71.1 bn yen (as of August 31, 2013)

LTV (Total debt / Total assets)

S&P
Credit ratings

42.4% (as of August 31, 2013)

A−(Stable)R&I

A＋(Stable)JCR

AA−(Stable)Investment Unit Price
Investment unit price725,000 yen(as of August 31, 2013)

Number of investment units outstanding

138,000 units(as of August 31, 2013)Market capitalization

100.0 bn yen(Unit price × Units outstanding)(as of August 31, 2013)

Historical high (closing price)

1,300,000 yen(February 26, 2007)

Historical low (closing price)

297,000 yen(November 20, 2008)

Net assets per unit

592,119 yen(as of August 31, 2013)Market net assets per unit

651,857 yen(as of August 31, 2013)

FUKUOKA REIT CORPORATION

3

Market net assets per unit = {(Total appraisal value
at end of period based on appraisal reports of realestate held at end of period − Total value on balance
sheets of real estate held at end of period (excluding
construction in progress in trust)) + (Net assets at endof period)} / Number of investment units outstanding

I. Overview of Fukuoka REIT Corporation

ProfileDividend Performance18th fiscal period end

August 31, 2013

18th fiscal period dividend

16,458 yen per unit

(Note)(semiannual periods ending every February and August)18th fiscal period days

184 days

Dividend yield

4.5% {(Dividend / Days × 365) / Unit price} (Note)

Unit price is as of August 31, 2013.

(yen)
20,000 19,014

18,438 18,632

17,341

18,360 18,499 18,373 18,049

17,377 17,397 16,783

16,465 16,922 16,621 16,193 16,289 16,458

10th

13th

15,00010,000

5,000

0

2nd

3rd

4th

5th

6th

7th

8th

9th

11th

12th

14th

15th

16th

17th

18th

99.3

98.8

17th

18th

Portfolio Property Occupancy Rate (at end of period)
FRC has maintained a portfolio property occupancy rate of 97.0% or higher since listing.
（%）
100

99.8

99.0

99.4

99.4

99.7

98.8

99.4

99.2

98.8

99.1

99.0

98.6

99.6

98.1

95

97.0

90

85

(Note)

2nd

3rd

4th

5th

6th

7th

8th

9th

10th

11th

12th

13th

14th

15th

16th

“Occupancy rate” refers to the percentage of total leased floor space at end of period to total leasable floor space at end of period.

Overview of the AssetManagerName:

Fukuoka Realty Co., Ltd.

Representative:

Etsuo Matsuyuki
CEO & Representative
Director

Address:

Portfolio (Note)
Investment type (based on acquisition price)+81-92-272-3900

Established:

December 26, 2003

Capital:200,000,000 yen

29.7%

Investment area (based on acquisition price)

1-2-25 Sumiyoshi,
Hakata Ward, Fukuoka
City

TEL:

Office buildings

Retail63.2%

Fukuoka metropolitan area

77.0%

Others 7.1%

Other
Kyushu areas

23.0%

Total leasable floor space

Occupancy rate at end of period

466,824.38m2

98.8%(Note)

Figures are based on properties owned as of August 31, 2013.

FUKUOKA REIT CORPORATION

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I. Overview of Fukuoka REIT Corporation

Increase in the Size of Assets under Management
Assets have doubled to 163,404 million yen since IPO.

23(mm yen)200,000
Assets acquired from outside parties (total acquisition price, left scale)

19

Assets acquired from sponsor company (total acquisition price, left scale)
Number of properties (right scale)

150,000

110,103
100,000

80,13350,00005

2nd87,9336

3rd

94,933

104,693
10

14

15

15

114,844 118,394 118,394(Properties)
20

20

16

16

16

16

17

17

149,594 149,594 153,674

156,274

163,404
15

124,294 124,294 127,294 127,294

11

10

7
5

4th

5th

6th

7th

8th

9th

10th

11th

12th

13th

14th

15th

16th

17th

18th

0

(Note 1) Kominedai Community Mall, acquired in the 3rd fiscal period and sold in the 6th fiscal period, was omitted from the acquired assets presented above.
(Note 2) Higashi Hie Business Center, acquired in the 10th fiscal period, was acquired from both an outside party and sponsor company. Consequently, half of its acquisition cost was counted as assets
acquired from outside parties; and the other half, as assets acquired from sponsor companies.
(Note 3) A senior equity interest in an anonymous partnership managed by CCH Bridge Y.K. was redeemed in the 14th fiscal period. It was excluded from total acquired assets from the 14th fiscal period onward.
(Note 4) Assets acquired from sponsor company include acquisitions arranged by sponsor company.
(Note 5) AEON Hara Shopping Center is included in assets acquired from sponsor companies taking the level of involvement of Fukuoka Jisho Co., Ltd., one of our sponsors, into consideration.

Environmental Initiatives
Two Office Buildings Certified as Silver-rank Green Buildings by DBJ
The Development Bank of Japan's (DBJ) Green Building Certification Program uses a DBJ-developed scoring model toevaluate buildings and select those that are outstanding in terms of environmental performance, security, and fire safety andotherwise meet the demands of the times. The program aims to promote widespread development of buildings designed tomeet the demands of the real estate market's diverse stakeholders and society at large.

Gofukumachi Business Center

Higashi Hie Business Center
DBJ Green Building

SilverFirst in Kyushu
June 22, 2011
Certification Rank:
Properties with the bestclass environmental &social awareness
Location
Gofukumachi, Hakata Ward, Fukuoka City
Construction/stories 10-story, steel reinforced concrete, flat-roofed building
with 1 story below ground
Completion date
October 2003
Acquisition dateNovember 2004

Location
Construction/stories
Completion date
Acquisition date

FUKUOKA REIT CORPORATION

5

Higashihie, Hakata Ward, Fukuoka City
11-story, steel reinforced concrete, flat-roofed building
February 2009
March 2009

II. Semiannual Report
Overview of Asset Management
1. Changes in operating results and financial position
14th fiscal period

15th fiscal period

16th fiscal period

17th fiscal period

18th fiscal period

mm yen

7,045[7,045]
4,316[3,803]
2,729
2,083
2,082
155,657[17.5]
71,259[14.9]
69,177

6,931[6,931]
4,294[3,757]
2,637
2,046
2,045
155,792[0.1]
71,222[(0.1)]
69,177

7,094[7,094]
4,498[3,964]
2,595
2,005
1,992
159,601[2.4]
71,170[(0.1)]
69,177

7,200[7,200]
4,578[4,025]
2,622
2,005
2,004
160,574[0.6]
71,182[0.0]
69,177

7,565[7,565]
4,716[4,157]
2,848
2,272
2,271
167,857[4.5]
81,712[14.8]
79,441

units

123,050

123,050

123,050

123,050

138,000(c)/(d)yen(e)

mm yen(e)/(d)yen

578,8122,045
16,621[16,621][–]578,384
1,992
16,193[16,193][–]

578,480
2,004
16,289[16,289][–]

592,119
2,271
16,458[16,458][–]

Fiscal Period(unit)

Operating revenues

mm yen[Leasing business revenues]

mm yenOperating expenses

mm yen[Expenses related to leasing business]

mm yenOperating income
Ordinary income
Net income
Total assets

mm yenmm yen(a)

mm yen(b)

mm yen(c)

mm yen[Change from previous period]

Net assets%[Change from previous period]%

Unitholders’ equity
Total number of investment
units outstanding
Net assets per unit
Total dividend
Dividend per unit(d)March 1, 2011 toAugust 31, 2011

September 1, 2011 to
February 29, 2012

March 1, 2012 toAugust 31, 2012

September 1, 2012 toFebruary 28, 2013

March 1, 2013 toAugust 31, 2013

[Earnings dividend per unit]

yen[Dividend in excess of earnings per unit]

yen579,113
2,082
16,922[16,922][–](Note 3)%

1.4 [2.9]

1.3 [2.6]

1.3 [2.5]

1.3 [2.5]

1.4 [2.7](Note 3)%

3.1 [6.2]

2.9 [5.8]

2.8 [5.6]

2.8 [5.7]

3.0 [5.9](c)/(b)

%

45.8

45.7

44.6

44.3

48.7

%

[(1.0)]
100.0[(0.1)]
100.0[(1.1)]
100.0[(0.3)]
100.0

[4.4]
100.0

17

17

19

20

23

425,906.83

425,773.30

445,001.37

448,867.34

466,824.38

99.6

98.1

97.0

99.3

98.8

1,164

1,177

1,242

1,268

1,343

254
4,406
184

1,031
4,351
182

1,285
4,372
184

431
4,444
181

612
4,751
184

Ratio of ordinary income tototal assets
Return on net assets
Ratio of net assets to total
assets[Change from previous period]

Payout ratio(e)/(a)%【Other reference information】
Number of investment
properties
properties at end of period
Total leasable floor space atm2
end of period
Occupancy rate at end of%
periodDepreciation and amortization
mm yenexpenses
mm yenCapital expenditures(Note 3) mm yen
Leasing NOI
days
Days in fiscal period(Note 1) Consumption tax is not included in operating revenues, etc.
(Note 2) 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 3) 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 tototal assets
Return on net assets
Leasing NOI

Ordinary income / average total assets
Average total assets = (Total assets at beginning of period ＋total assets at end of period ) / 2
Net income/average net assets
Average net assets = (Net assets at beginning of period ＋net assets at end of period) / 2
Leasing business revenues−expenses related to leasing business＋depreciation and amortization expenses

FUKUOKA REIT CORPORATION

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II. Semiannual Report

Overview of Asset Management
2. Management situation(1) Brief history of the investment corporation
Fukuoka REIT Corporation (hereinafter “FRC”) was established on July 2, 2004 based on the “Act on Investment Trusts andInvestment Corporations” (Act No. 198 in 1951 including later revisions, hereinafter the “Investment Trusts Act”) and listed on
the Tokyo Stock Exchange Group Inc. and the Fukuoka Stock Exchange on June 21, 2005 as the nation’s first real estate
investment trust specializing in regional properties (code number: 8968). FRC invests in real estate throughout Kyushu (including
Okinawa Prefecture), with a central focus on Fukuoka City, and Yamaguchi Prefecture (hereinafter the “Fukuoka/Kyushu area”)
utilizing our strength of knowing the local characteristics of real estate, which is a very regional-specific business.
FRC started asset management activities on November 9, 2004 after acquisition of four properties such as Retail in Canal
City Hakata (excluding some areas of specialty shops, hotels, theaters, offices and common space), a commercial complex
where specialty shops, cinema complex, theaters, amusement facilities, hotels and offices are integrally developed (hereinafter“Canal City Hakata”). In addition to the 20 properties it owned as of the end of the previous fiscal period (February 28, 2013),
FRC acquired an office building and two properties in the Others category in the fiscal period under review. As a result, FRC
now manages a total of 23 properties comprising ten Retail, seven Office buildings and six Others as of the end of the 18th
fiscal period (August 31, 2013).

(2) Investment environment and portfolio performance
During the 18th fiscal period, the Japanese economy picked up steadily, showing some advances for autonomous recovery.
Corporate performance improved while the employment situation and consumer spending were forming into better shape,
against the backdrop of a gradual increase in production and exports. Looking ahead, with the various political measures
noticeably proving effective, improvement in corporate earnings is expected to bring about an increase in household income
and investment, leading the economy to head for recovery. The Kyushu area, the core investment target area for FRC, is also
picking up as a whole, from rallying production and capital investment to the improving trend in employment and consumer
spending.
As for the land price trend, the national average was still decreasing but the rate of decrease continued to shrink over the
past twelve months from July 2012, according to the government’s Prefectural Land Price Survey 2013. The three major urban
areas of Tokyo, Osaka and Nagoya saw the average price remain almost flat for residential land and take an upward turn forcommercial land. In Fukuoka City, the central area of FRC’s investment targets, the recovery trend of land prices strengthened
primarily in the urban areas, with commercial land prices and residential land prices both increasing by 2.3% and 0.7% yearon-year, respectively.
Under such circumstances, FRC focused on stringently selective investment in accordance with its investment policy. This
led to the acquisition of D-Wing Tower (acquisition price: 2,800 mm yen) and Hotel FORZA Oita (acquisition price: 1,530 mmyen) on March 1, 2013 and Tenjin North Front Building (acquisition price: 2,800 mm yen) on March 28, 2013. For existing
properties, we continuously worked to enhance competitiveness and customer drawing power at major Retail such as Canal
City Hakata, as well as maintain and improve the occupancy rate of the portfolio. As a result, the average occupancy rate forall properties FRC owned as of the end of the eighteenth fiscal period marked at 98.8%.
When analyzing FRC’s portfolio (on an acquisition price basis) by investment target area, the investment ratio in the Fukuoka
urban area accounted for 77.0%; when analyzing by property type, Retail, Office buildings, and Others accounted for 63.2%,
29.7% and 7.1%, respectively.

(3) Summary of fundraising
In the 18th fiscal period, FRC procured 10,263 mm yen by issuing new investment units (14,950 units) on March 1, 2013 witha primary aim to acquire an Office building and two properties in the Others category as mentioned above. FRC refinanced 600
mm yen in long-term debt that matured in March 2013 in long-term debt of five years (in contrast to three years previously), andrefinanced 1,000 mm yen in long-term debt that matured in June 2013 in long-term debt of seven years (in contrast to five years
previously). In March 2013, FRC used the proceeds from the issuance of new investment units to fully repay 2,700 mm yen in
short-term debt upon maturity and conducted partial early repayment of long-term debt (800 mm yen). As a result, the balance
FUKUOKA REIT CORPORATION

7

II. Semiannual Report

Overview of Asset Managementof debt outstanding at the end of the 18th fiscal period totaled 71,100 mm yen, with the loan-to-value ratio (ratio of interestbearing debt to total assets) at 42.4%. With regard to the commitment lines FRC renewed its backup commitment line which
had expired in July 2013 with credit limit of 6,000 mm yen and commitment period of one year. In addition, FRC concluded
an interest rate swap agreement (notional principal amount of 8,000 mm yen) in March 2013 in order to promote a shift to
fixed interest rate debt financing. Going forward, FRC will continue its efforts to reduce refinancing risks by dispersing the debt
repayment dates and increasing the average length of time until debt maturity, and to mitigate risks of rising interest rates byshifting to fixed-interest rate borrowings and through other measures.
Moreover, the credit ratings assigned to FRC as of the end of the 18th fiscal period are as follows.
Credit Rating Agency
Standard & Poor's Ratings Japan K.K. (S&P)

Rating Type

RatingRating Outlook

Long-term Corporate Credit Rating
Short-term Corporate Credit RatingA−
A−2

StableIssuer Rating

A+

StableLong-term Senior Debts Rating

AA−

StableRating and Investment Information, Inc. (R&I)
Japan Credit Rating Agency, Ltd. (JCR)(4) Summary of performance and dividend
As a result of these management efforts, operating revenues totaled 7,565 mm yen and operating income after excluding
operating expenses such as expenses related to leasing business and asset management fees totaled 2,848 mm yen.
Ordinary income was 2,272 mm yen and net income was 2,271 mm yen.
Management declared a dividend of 16,458 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 [Act No. 26 in 1957 including
later revisions, hereinafter the “Special Taxation Measures Act”]). Under this act, an investment corporation is allowed todeduct the maximum amount of dividends paid to investors from its taxable income.

3. Change in the number of investment units issued
Changes in unitholders’ capital from the incorporation of FRC to the end of the 18th fiscal period are as follows.
Number of investment units
issued (units)
Increase
Balance
July 2, 2004
Established through private placement250
250November 8, 2004 Additional issue of investment units through private offering
82,80083,050June 20, 2005
Additional issue of new investment units through public offering
7,000
90,050July 21, 2005
Additional issue of new investment units through third-party allotment
2,000
92,050
September 7, 2006 Additional issue of new investment units through public offering
15,000107,050
March 1, 2011
Additional issue of new investment units through public offering
16,000123,050
March 1, 2013
Additional issue of new investment units through public offering
14,950138,000
Date

Unitholders’ capital

Item

Remarks(millions of yen)

Increase
125
41,4005,944
1,698
11,096
8,913
10,263

Balance
125
41,52547,46949,16760,264
69,17779,441(Note 1)
(Note 2)
(Note 3)(Note 4)(Note 5)(Note 6)(Note 7)(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 issue 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.

[Changes in market price of investment certificates]
The highest and lowest (closing price) market prices on the Real Estate Investment Trust Section of the Tokyo Stock
Exchange, on which FRC’s investment certificates are listed, in each fiscal period are as follows:
Fiscal period
HighestLowest14th fiscal period
March 1, 2011 toAugust 31, 2011

609,000 yen
515,000 yen

15th fiscal period
September 1, 2011 to
February 29, 2012

542,000 yen
465,500 yen

16th fiscal period
March 1, 2012 toAugust 31, 2012

599,000 yen
525,000 yen

FUKUOKA REIT CORPORATION

8

17th fiscal period
September 1, 2012 toFebruary 28, 2013

769,000 yen
536,000 yen

18th fiscal period
March 1, 2013 toAugust 31, 2013

893,000 yen
704,000 yenII. Semiannual Report

Overview of Asset Management
4. Results of dividends
With respect to the dividend for the 18th 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 of the Special Taxation Measures Act) that allow FRC to deduct the maximum amountof earnings dividend from its taxable income. Accordingly, dividend per unit for the fiscal period was 16,458 yen.
(thousands of yen)
Fiscal period
Unappropriated surplus
Undistributed earnings
Total dividends[Dividend per unit]

Earnings dividends[Earnings dividend per unit]

Contribution refund[Contribution refund per unit]

14th fiscal period

15th fiscal period

March 1, 2011 toAugust 31, 2011

16th fiscal period

September 1, 2011 to
February 29, 2012

2,082,302
50
2,082,252[16,922 yen]
2,082,252[16,922 yen]–[–]

17th fiscal period

March 1, 2012 toAugust 31, 2012

2,045,264
50
2,045,214[16,621 yen]
2,045,214[16,621 yen]

1,992,637
89
1,992,548[16,193 yen]
1,992,548[16,193 yen]

–

–

[–]

18th fiscal period

September 1, 2012 toFebruary 28, 2013[–]

March 1, 2013 toAugust 31, 2013

2,004,391
29
2,004,361[16,289 yen]
2,004,361[16,289 yen]

2,271,226
22
2,271,204[16,458 yen]
2,271,204[16,458 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 even in a weak consumer spending environment, and secure and maintain the stable operation of theproperties 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.”
By geographic location, of Fukuoka and Kyushu areas, FRC will invest 60% to 90% of its assets in the Fukuoka urban area,
since the Fukuoka urban area is expected to have a high population growth rate in the future. In addition to the Fukuoka urban
area, management has decided to actively acquire properties in major cities, if there are regions or properties where FRC cangenerate investment through its knowlenge of the local land. 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 withthe local business community 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 18th fiscal
periodNo relevant items

FUKUOKA REIT CORPORATION

9

II. Semiannual Report

Overview of the Investment Corporation
1. Summary of unitholders’ capital
Fiscal period
Total number of authorized
investment units
Total number of investment
units outstanding
Number of unitholders

15th fiscal period

16th fiscal period

2,000,000 units

2,000,000 units

123,050 units
8,399

14th fiscal period
as of August 31, 2011

17th fiscal period

18th fiscal period

2,000,000 units

2,000,000 units

2,000,000 units

123,050 units

123,050 units

123,050 units

138,000 units

8,685

8,290

7,495

8,470

as of February 29, 2012as of August 31, 2012as of February 28, 2013

as of August 31, 2013

2. Matters related to investment units
The following table sets forth the major unitholders of FRC as of August 31, 2013.
Investment units held (units)

NameJapan Trustee Service Bank, Ltd. (Investment trust account)
Fukuoka Jisho Co., Ltd.
Trust & Custody Service Bank, Ltd. (Securities investment trust account)
The Nomura Trust and Banking Co., Ltd. (Investment trust account)
NOMURA BANK (LUXEMBOURG) S.A.
The Fuji Fire and Marine Insurance Co., Ltd.
The Master Trust Bank of Japan, Ltd. (Trust account)
MetLife Alico Insurance Company K. K.
Kazuhiko Enomoto
JOYO BANK Co., Ltd.
Total
(Note)

34,222
13,955
7,452
7,239
4,480
3,925
3,862
3,409
3,070
2,214
83,828Percentage of total number ofinvestment units outstanding (%) (Note)
24.79
10.11
5.40
5.24
3.24
2.84
2.79
2.47
2.22
1.60
60.74

Percentage of total number of investment units outstanding is rounded down to the nearest specified unit.

3. Matters related to directors(1) The names of FRC’s directors, etc. and their fees for the 18th fiscal period are
as follows.
Title

Name of directors, etc.

Major concurrent assignments

Total fee for each title forthe 18th fiscal period(thousands of yen) (Note 2)

CEO and Representative Director
Supervisory Directors
Independent Auditor

Masayasu Saki
Takashi Shinohara
Hiroyasu Shindo
PricewaterhouseCoopers Aarata

Chairman, Fukuoka Realty Co., Ltd.
Representative Partner
Representative Council, Shindo Law Firm
–

6,000
3,600
11,700(Note 1) The CEO and Representative Director and Supervisory Directors do not possess investment units of FRC under their own name or under another person’s name. Although there are cases where theSupervisory Directors may be directors of companies other than those stated above, none of the companies or those stated above have vested interest in FRC.
(Note 2) The fees for the CEO and Representative Director and Supervisory Directors are the amounts paid to them in the 18th fiscal period, and the fee to the Independent Auditor is the amount payable to it(estimate) for audits pertaining to the 18th fiscal period.
(Note 3) The total fee payable to PricewaterhouseCoopers Aarata includes fees for its services other than those stipulated in Article 2-1 of the Certified Public Accountants Act.

(2) Policy on deciding to dismiss or not to reappoint the Independent Auditor
FRC will review at its Board of Directors meetings the dismissal of the Independent Auditor in accordance with the provisionsof the Investment Trusts Act, and review decisions not to reappoint the Independent Auditor following the comprehensive
consideration of the audit quality, audit fee and other various conditions.

FUKUOKA REIT CORPORATION

10

II. Semiannual Report

Overview of the Investment Corporation
4. Names of asset management company, asset custodian and generaladministrators as of the end of the 18th fiscal period
The following table sets forth the asset management company, asset custodian and general administrators of FRC as ofAugust 31, 2013.
Category of entrustment

Name

Asset Management Company

Fukuoka Realty Co., Ltd.

Asset Custodian

Mitsubishi UFJ Trust and Banking Corporation

General Administrator (accounting matters, etc.)

Mitsubishi UFJ Trust and Banking Corporation

General Administrator (administration of unitholders’ list)

Sumitomo Mitsui Trust Bank, Limited

Status of FRC’s Assets under Management
1. FRC’s asset structure
17th fiscal period

Type of asset

Area

Use

18th fiscal period

as of February 28, 2013

Total value of
properties held

(Note 1)as of August 31, 2013

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

Total value of
properties held(%) (Note 3)

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

Fukuoka urban area

66,71841.5

66,404

39.6

Other Kyushu areas

35,84722.3

35,732

21.3

Fukuoka urban area

42,84026.7

45,363

27.0

Other Kyushu areas

–

–

–

–

Fukuoka urban area

7,016

4.4

9,812

5.8

Other Kyushu areas

–

–

1,537

0.9

Deposits and other assets

8,152

5.1

9,006

5.4

Total amount of assets (Note 4)

160,574[152,422]

100.0[94.9]

167,857[159,043]

100.0[94.7]

RetailReal estate in Trust

Office buildings

Others(Note 1) “Fukuoka urban 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 2010 census, which states “the numberof workers and students aged 15 years or older 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 area” refers to all other parts of Kyushu (excluding the Fukuoka urban area) and Yamaguchi Prefecture.
(Note 2) “Total value of properties held” is based on the value on the balance sheets (the value of real estate in trust is the book value after depreciation).
(Note 3) Concerning the “Percentage of total assets,” the numbers 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 held in effect to the total amount of assets.

FUKUOKA REIT CORPORATION

11

II. Semiannual Report

Status of FRC’s Assets under Management
2. Major assets owned by FRC
The following is an overview of the major assets owned by FRC as of August 31, 2013.
Real estate property name (Note 1)

Book value(mm of yen)

Total leasable floor Total leased floor
space (m2)space (m2)Occupancy rate(%) (Note 2)

Percentage of total
leasing businessrevenue (%) (Note 3)

Main use

Canal City Hakata

31,32546,486.61

46,359.15

99.7

15.6

RetailCanal City Hakata･B

28,632

68,811.99

68,548.98

99.6

21.2

RetailPark Place Oita

16,982

104,917.10

102,745.76

97.9

14.7

RetailSunLive City Kokura

6,108

61,450.22

61,450.22

100.0

3.6

RetailSquare Mall Kagoshima Usuki

4,853

14,602.59

14,602.59

100.0

3.4

RetailKumamoto Intercommunity SC

2,176

6,968.66

6,968.66

100.0

1.2

RetailAEON Hara Shopping Center

5,382

27,313.53

27,313.53

100.0

2.8

RetailHanahata SC

1,064

2,801.15

2,801.15

100.0

0.5

RetailKurume Higashi Kushiwara SC

2,293

6,467.80

6,467.80

100.0

1.2

RetailK’s Denki Kagoshima

3,318

7,296.17

7,296.17

100.0

1.5

Retail

102,137

347,115.82

344,554.01

99.3

65.6

Canal City Business Center Building

13,83923,022.21

23,022.21

100.0

8.2

Office building

Gofukumachi Business Center

9,846

19,906.33

19,304.72

97.0

6.6

Office building

Sanix Hakata Building

4,168

6,293.76

6,026.80

95.8

2.6

Office building

Taihaku Street Business Center

6,699

14,677.27

14,327.34

97.6

3.9

Office building

Higashi Hie Business Center

5,244

13,695.51

13,598.27

99.3

4.4

Office building

Tenjin Nishi-Dori Center Building

2,702

3,339.32

3,339.32

100.0

1.1

Office building

Tenjin North Front Building

2,862

5,233.98

5,233.98

100.0

1.5

Office building

45,36386,168.38

84,852.64

98.5

28.4

Amex Akasakamon Tower

1,883

4,821.25

4,525.01

93.9

0.9

OthersCity House Keyaki Dori

1,031

2,710.86

2,499.46

92.2

0.5

OthersAqualia Kego

2,763

7,415.36

6,791.34

91.6

1.5

OthersAqualia Chihaya

1,270

5,619.69

5,559.96

98.9

0.8

Others

D-Wing Tower

2,863

7,187.58

6,758.84

94.0

1.5

OthersHotel FORZA Oita

1,537

5,785.44

5,785.44

100.0

0.8

OthersOthers subtotal:

11,34933,540.18

31,920.05

95.2

6.0

Total

158,851

466,824.38

461,326.70

98.8

100.0

Retail subtotal:

Office buildings subtotal:(Note 1) The properties listed above are owned in the form of trust beneficiary interest.
(Note 2) “Occupancy rate” refers to the percentage of total leased floor space to total leasable floor space and the numbers are rounded off to one decimal place.
(Note 3) “Percentage of total leasing business revenues” is rounded off to one decimal place. The percentage of total leasing business revenues of respective properties in the above table may not equal 100%.

FUKUOKA REIT CORPORATION

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II. Semiannual Report

Status of FRC’s Assets under Management
3. Details of real estate properties in the portfolio
The following table provides details of the real estate properties owned by FRC as of August 31, 2013.

Real estate property name

Canal City Hakata
Canal City Hakata･ B
Park Place Oita
SunLive City Kokura
Square Mall Kagoshima Usuki
Kumamoto Intercommunity SC
AEON Hara Shopping Center
Hanahata SC
Kurume Higashi Kushiwara SC
K’s Denki Kagoshima

Form ofownership

Location

2-22, 1-Chome, Sumiyoshi,
Hakata Ward, Fukuoka City
2-1, 1-Chome, Sumiyoshi,
Hakata Ward, Fukuoka City1, 2-Chome, Koen Dori Nishi,
Oita City, Oita
14-1, 2-Chome, Kamikuzuhara,
Kokura Minami Ward, Kitakyushu
City
2-18, 2-Chome, Usuki,
Kagoshima City, Kagoshima
1-5, 1-Chome, Kozono, Higashi
Ward, Kumamoto City
27-52, 6-Chome, Hara, Sawara
Ward, Fukuoka City
9-12, 4-Chome, Hanahata,
Minami Ward, Fukuoka City
370-3, Higashi Kushiwaramachi,
Kurume City, Fukuoka
4-12, Tokai-cho, Kagoshima
City, Kagoshima

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,
Canal City Business Center Building
Hakata Ward, Fukuoka City
10-10, Kamigofukumachi,
Gofukumachi Business Center
Hakata Ward, Fukuoka City
1-23, 2-Chome,
Sanix Hakata Building
Hakataekihigashi, Hakata Ward,
Fukuoka City
3-21, Gokushomachi, Hakata
Taihaku Street Business Center
Ward, Fukuoka City
1-2, 3-Chome, Higashihie,
Higashi Hie Business Center
Hakata Ward, Fukuoka City
5-28, 2-Chome, Tenjin, Chuo
Tenjin Nishi-Dori Center Building
Ward, Fukuoka City
4-20, 4-Chome, Tenjin, Chuo
Tenjin North Front Building
Ward, Fukuoka City
Office buildings subtotal:
4-23, 2-Chome, Maizuru, Chuo
Amex Akasakamon Tower
Ward, Fukuoka City
16-21, 2-Chome, Kego, Chuo
City House Keyaki DoriWard, Fukuoka City
13-17, 2-Chome, Kego, Chuo
Aqualia Kego
Ward, Fukuoka City
3-12, 4-Chome, Chihaya,
Aqualia Chihaya
Higashi Ward, Fukuoka City
10-38, 2-Chome, Daimyo, Chuo
D-Wing Tower
Ward, Fukuoka City
5-18, 1-Chome, Chuo-cho,Hotel FORZA Oita
Oita City, Oita
Others subtotal:
Total(Note)

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

Total leasable
floor space (m2)Period-end
appraisalvalue(mm of yen)
(Note)

Book value
at end ofperiodReal estate appraiser(mm of yen)

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

46,486.61

32,20031,32568,811.99

28,90028,632

104,917.10

16,735

16,982

Japan Real Estate Institute61,450.22

7,410

6,108

Japan Real Estate Institute14,602.59

4,910

4,853

Japan Real Estate Institute6,968.66

2,450

2,176

Japan Real Estate Institute27,313.53

4,510

5,382

Japan Real Estate Institute2,801.15

1,180

1,064

6,467.80

2,550

2,293

7,296.17

3,410

3,318

347,115.82

104,255

102,137

23,022.21

14,80013,83919,906.33

12,8009,846

6,293.76

4,720

4,168

Japan Real Estate Institute

14,677.27

6,760

6,699

Japan Real Estate Institute13,695.51

6,090

5,244

Tanizawa Sogo Appraisal
Co., Ltd.

3,339.32

2,690

2,702

Japan Real Estate Institute

5,233.98

2,940

2,862

Japan Real Estate Institute86,168.38

50,80045,363

4,821.25

1,700

1,883

2,710.86

1,050

1,031

7,415.36

3,320

2,763

Japan Real Estate Institute

5,619.69

1,430

1,270

Japan Real Estate Institute7,187.58

3,010

2,863

Tanizawa Sogo Appraisal
Co., Ltd.

5,785.44

1,530

1,537

Japan Real Estate Institute33,540.18

12,04011,349466,824.38

167,095

158,851

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

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

"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
of Incorporation and rules stipulated by the Investment Trusts Association, Japan.3. Details of real estate properties in the portfolio

FUKUOKA REIT CORPORATION

13

II. Semiannual Report

Status of FRC’s Assets under Management

18th fiscal period

17th fiscal period

September 1, 2012 to February 28, 2013

Real estate property name

Number ofOccupancy
tenants at end rate at end ofof period
period(Note 1)

Canal City Hakata
Canal City Hakata･B
Park Place Oita
SunLive City Kokura
Square Mall Kagoshima Usuki
Kumamoto Intercommunity SC
AEON Hara Shopping Center
Hanahata SC
Kurume Higashi Kushiwara SC
K’s Denki Kagoshima
Retail subtotal:(%) (Note 3)

1 [49]
1 [50]
1 [105]
1
12
2
1
2
1
1
23 [224](Note 2)

March 1, 2013 to August 31, 2013

Total leasing Percentage ofTotal leasing Percentage of
Number ofOccupancy
business
total leasing
business
total leasing
tenants at end rate at end ofrevenues
business
revenuebusinessof period
periodduring period
revenueduring period
revenue(Note 1)(%) (Note 3)(mm of yen)(%) (Note 4)

100.0
99.9
99.1
100.0
100.0
100.0
100.0
100.0
100.0
100.0

1,194
1,604
1,093
292
250
90
212
40
88
111

16.6
22.3
15.2
4.1
3.5
1.3
3.0
0.6
1.2
1.5

99.7

4,979

69.1

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

1 [60]
26
19
1 [66]
1 [20]
1

100.0
94.8
100.0
97.5
97.8
100.0

613
504
198
297
322
14

8.5
7.0
2.8
4.1
4.5
0.2

–

–

–

–

Office buildings subtotal:

49 [192]

97.9

1,950

27.1

(Note 2)

1 [48]
1 [51]
1 [104]
1
12
2
1
2
1
1
23 [223](Note 2)

1 [60]
29
18
1 [65]
1 [21]
1
11
62 [205](Note 2)Amex Akasakamon Tower
City House Keyaki Dori
Aqualia Kego
Aqualia Chihaya
D-Wing Tower
Hotel FORZA Oita

1 [65]
1 [41]
1 [127]
1 [102]

96.8
97.8
97.3
97.5

63
37
113
56

0.9
0.5
1.6
0.8

–
–

–
–

–
–

–
–

Others subtotal:

4 [335]

97.3

270

3.8

1 [62]
1 [39]
1 [122]
1 [104]
1 [130]1
6 [458]

Total

76 [751]

100.0

91 [886](Note 2)
(Note 2)

99.3

7,200

(Note 2)
(Note 2)(mm of yen)(%) (Note 4)

99.7
99.6
97.9
100.0
100.0
100.0
100.0
100.0
100.0
100.0

1,177
1,601
1,114
274
254
89
212
40
88
111

15.6
21.2
14.7
3.6
3.4
1.2
2.8
0.5
1.2
1.5

99.3

4,965

65.6

100.0
97.0
95.8
97.6
99.3
100.0
100.0

620
502
197
295
335
86
111

8.2
6.6
2.6
3.9
4.4
1.1
1.5

98.5

2,148

28.4

93.9
92.2
91.6
98.9
94.0
100.0

66
36
116
57
110
63

0.9
0.5
1.5
0.8
1.5
0.8

95.2

450

6.0

98.8

7,565

100.0

(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 12 office buildings and 53 residences (10 office buildings and 56 residences in the 17th fiscal period).
(Note 2) The subtotal and total of all the tenants in other than pass-through master leasing properties and the number of sections stipulated in the tenancy agreements with end tenants for pass-throughmaster leasing properties is shown in square brackets in the totals column for “Number of tenants.”(Note 3) “Occupancy rate” refers to the percentage of total leased floor space to total leasable floor space and the numbers are rounded off to one decimal place.
(Note 4) “Total leasing business revenues” are the total of real estate leasing revenues and other revenues from real estate leasing in the 18th fiscal period.
(Note 5) “Percentage of total leasing business revenues” is obtained by dividing each property’s total leasing business revenues by the total amount of total leasing revenues. The total of individual percentages
in the above table may not equal 100%, since the numbers are rounded off to one decimal place.

FUKUOKA REIT CORPORATION

14

II. Semiannual Report

Status of FRC’s Assets under Management
4. Securities incorporated in the portfolio
No relevant items

5. List of specific transaction contract amount and status of fair value
The following table provides the contract amount of specific transaction by FRC and the status of its fair value as of August 31,
2013.
Contract amount, etc.
Category

Of which,exceeding 1 year

(Note 1)

Interest rate swap transaction(Payable fixed; Receivable floating)

Off-market transaction
Total

Fair value(mm of yen)Type

(mm of yen)
(Note 2)

18,300

8,000

(25)

18,300

8,000

(25)

(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.

6. Status of other assets
All real estate trust beneficiary interests owned by FRC have been entered under 3. Details of real estate properties in theportfolio above. There is no incorporation of other specified assets as of the end of the 18th fiscal period.

FUKUOKA REIT CORPORATION

15

II. Semiannual Report

Capital Expenditures for Owned Real Estate
1. Planned capital expenditures
The following table provides major items of capital expenditures associated with currently planned renovations, etc. for realestate properties owned by FRC as of the date of this Semiannual Report. Furthermore, the planned construction costs
indicated below include portions that are classified as expenses in accounting. In addition, FRC will implement renewal
construction work in order to maintain and improve the competitiveness of properties in the market as well as tenantsatisfaction, on top of the construction, facilities and replacement work for which expenditures will be made regularly.
Planned construction cost
Real estate property
name(mm of yen)

Location

PurposeSchedule
Total

Canal City Hakata

Hakata Ward,
Fukuoka City

Canal City Hakata･ B

Hakata Ward,
Fukuoka City

Canal City BusinessCenter Building

Hakata Ward,
Fukuoka City

Common area repairs and improvements
Environmental beautification
Replacement of air-conditioning equipment
Common area repairs and improvements
Common area repairs and improvements
Environmental beautification
Common area repairs and improvements
Common area repairs and improvements
Renovation work

From May 2013 to May 2014
November 2013
November 2013
From May 2013 to May 2014
November 2013
November 2013
February 2014
February 2014
March 2014

34
18
21
67
10
37
18
18
18

10
–
–
20
–
–
–
–
–

10
–
–
20
–
–
–
–
–

Renovation work

April 2014

39

–

–

979

192

192

35
29
27
20
18
27
36
29

–
–
–
–
–
–
–
–

–
–
–
–
–
–
–
–

From August 2013 toJanuary 2014

77

38

–

From August 2013 to
September 2013

29

11

–

Floor expansion at Magnolia Court

Park Place Oita

SunLive City Kokura
Taihaku Street
Business Center

Oita City, Oita

Amount paid
Amountduring thealready paid
periodCommon area repairs and improvements
Common area repairs and improvements
Environmental beautification
Common area repairs and improvements
Update of sales management system
Common area repairs and improvements
Renovation work
Common area repairs and improvements

KokuraMinami Ward, Common area repairs and improvements
Kitakyushu City
Hakata Ward,
Common area repairs and improvements
Fukuoka City

From August 2013 to April
2014
September 2013
November 2013
November 2013
December 2013
February 2014
March 2014
March 2014
April 2014

2. Capital expenditures during the 18th fiscal period
The following table provides the overview of major construction work that was completed in the 18th fiscal period out of thecapital expenditures totaling 612 million yen. Furthermore, FRC conducted construction of 770 million yen in total in the 18th
fiscal period, combined with the 147 million yen in repair and maintenance expenses that were classified as expenses inaccounting and 10 million yen in expenses for restoration to former state.
Real estate property nameLocation

PurposeCanal City Hakata

Hakata Ward, Fukuoka City

Canal City Hakata･B

Hakata Ward, Fukuoka City

Park Place Oita

Oita City, Oita

PeriodConstruction cost
(mm of yen)

Common area repairs and improvements

August 2013

35

Renovation work

August 201313

Common area repairs and improvements

August 201338

Common area repairs and improvements

April 2013

51

Renovation work

August 2013137

FUKUOKA REIT CORPORATION

16

II. Semiannual Report

Capital Expenditures for Owned Real Estate
3. Reserves for long-term repair and maintenance plans
FRC has deposited the following amounts from the cash flows generated during the 18th fiscal period in order to fund largescale repair and maintenance work in the medium to long term future, based on long-term repairs and maintenance plans
prepared for respective properties.
(mm of yen)
Fiscal period

14th fiscal period

15th fiscal period

March 1, 2011 toAugust 31, 2011

16th fiscal period

September 1, 2011 to
February 29, 2012

March 1, 2012 toAugust 31, 2012

17th fiscal period
September 1, 2012 toFebruary 28, 2013

18th fiscal period
March 1, 2013 toAugust 31, 2013

Balance of deposits at beginning of period

428

769

1,116

838

350

Deposits during the period

340

347

351

350

350

Amounts used from deposits during the period

–

–

630

838

–

Deposits carried forward to the next period

769

1,116

838

350

700

Expenses and Liabilities
1. Details of expenses related to asset management(thousands of yen)Item

17th fiscal period(a) Asset management fees

18th fiscal period
422,387445,912(b) Asset custody fees

5,935

6,071

(c) Administrative service fees

47,06347,022(d) Directors’ compensations

9,600

9,600

(e) Other operating expenses

68,09750,627

Total

553,083

559,233(Note)Aside from the amounts of the asset management fees shown above, a total of 6,500 thousand yen for the 17th fiscal period has been paid for asset management of Tenjin Nishi-Dori Center Building,and a total of 31,825 thousand yen for the 18th fiscal period has been paid for asset management of D-Wing Tower, Hotel FORZA Oita and Tenjin North Front Building. Both of the amounts have been
included in the book value of respective properties.

2. Status of debt
As of the end of the 18th fiscal period (August 31, 2013), FRC has the following debt from respective financial institutions.
Category
LenderBalance as Balance as Average
Drawdown of March 1, of August 31, interest
date
2013
rate (%)
2013

Repayment
methodUse offunds

Description

Lump-sumupon maturity

Refinance
fund

No collateral/
No guarantee

Lump-sumupon maturity
March 29,
Lump-sum
2013
upon maturity
December 30, Lump-sum
2013
upon maturity

Refinance
fund
Refinance
fund
Refinance
fund

No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guarantee(mm of yen)

(Note 1)–0.520

March 29,
2013

1,000

–

0.764

June 28, 2013

600

–

0.909

2,000

2,000

1.052

(mm of yen)

The Bank of Fukuoka (Note 2)
Resona Bank (Note 2)
The Kumamoto Bank (Note 2)
February
Short-term The Shinwa Bank (Note 2)
28, 2013
debt
The Nishi-Nippon City Bank (Note 2)
Resona Bank (Note 2)
The Bank of Nagasaki (Note 2)
SubtotalJune 30,
Aozora Bank
2008
Current
maturities Mitsubishi UFJ Trust and Banking March 31,
2010
of long-term Corporation
debt
Sumitomo Mitsui Banking
June 30,
Corporation
2010

Repayment
date

980
233
93
93
1,083
108
108
2,700

FUKUOKA REIT CORPORATION

17

II. Semiannual Report

Expenses and Liabilities
Category
LenderMizuho Bank (Note 3)
The Norinchukin Bank
The Hiroshima Bank
The Kitakyushu Bank
Current
The Iyo Bank
maturities
of long-term The Bank of Saga
The Higo Bank
debt
The Shinwa Bank
Development Bank of Japan

Balance as Balance as Average
Drawdown of March 1, of August 31, interest
date
2013
2013
rate (%)

Repayment
date

Repayment
methodUse offunds

Description(mm of yen)

(mm of yen)

(Note 1)

July 30,
2010

–
–
–
–
–
–
–
–

2,600
4,000
1,400
800
500
500
300
200

1.410

July 31, 2014

Lump-sumupon maturity

Refinance
fund

No collateral/
No guarantee

August 31,
2009

–

4,000

1.710

August 29,
2014

Lump-sumupon maturity

Refinance
fund

No collateral/
No guarantee

3,600

16,300

2,475

2,400

4,000

─

4,000

4,000

4,000

4,000

2,000

1,200

Lump-sumupon maturity
Lump-sum
1.950
upon maturity
Lump-sum
2.170
upon maturity
Lump-sum
1.157 June 30, 2015
upon maturity

Refinance
fund
Refinance
fund
Refinance
fund
Refinance
fund
Refinance
fund

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

2,600
4,000
1,400
800
500
500
300
200

–
–
–
–
–
–
–
–

1.410

Lump-sumupon maturity

Refinance
fund

No collateral/
No guarantee

300

300

1.325

1,500

1,500

0.702

2,000

2,000

0.700

2,000

2,000

0.789

2,000

2,000

0.850

2,000

2,000

1.305

2,000

2,000

1.305

1,000

1,000

1.800

1,000

1,000

1.208

1,000

1,000

1.041

1,500

1,500

0.852

500

500

1.182

500

500

1.182

500

500

1.182

500

500

1.182

September 30, Lump-sum
Refinance
2014
upon maturity
fund
December 30, Lump-sum
Refinance
2016
upon maturity
fund
February 29,
Lump-sum Acquisition
2016
upon maturity
fund
February 29,
Lump-sum Acquisition
2016
upon maturity
fund
February 29,
Lump-sum Acquisition
2016
upon maturity
fund
Lump-sum
Refinance
July 31, 2017upon maturity
fund
Lump-sum
Refinance
July 31, 2017upon maturity
fund
Lump-sum
Refinance
July 31, 2018upon maturity
fund
Lump-sum
Refinance
July 29, 2016
upon maturity
fund
Lump-sum
Refinance
July 31, 2015
upon maturity
fund
December 30, Lump-sum
Refinance
2017
upon maturity
fund
December 30, Lump-sum
Refinance
2016
upon maturity
fund
December 30, Lump-sum
Refinance
2016
upon maturity
fund
December 30, Lump-sum
Refinance
2016
upon maturity
fund
December 30, Lump-sum
Refinance
2016
upon maturity
fund

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

Subtotal
Development Bank of Japan
Development Bank of Japan
Development Bank of Japan.
Development Bank of Japan
Sumitomo Mitsui Banking
Corporation
Mizuho Bank (Note 3)
The Norinchukin Bank
The Hiroshima Bank
The Kitakyushu BankThe Iyo Bank
The Bank of Saga
The Higo BankThe Shinwa Bank, Ltd.
Resona Bank
The Bank of Fukuoka
Long-term
debt

The Bank of Fukuoka
The Nishi-Nippon City Bank
Development Bank of JapanThe Bank of Fukuoka
The Nishi-Nippon City BankThe Dai-Ichi Life Insurance
Company
Shinsei Bank
Sumitomo Mitsui Trust Bank
The Bank of Fukuoka
The Hiroshima Bank
Oita BankThe Eighteenth BankThe Shinwa Bank

June 30,
2009
August 31,
2009
August 31,
2009
August 31,
2009
June 30,
2010

July 30,2010

September
30, 2010
December30, 2010
March 1,
2011
March 1,
2011
March 1,
2011
July 29,
2011
July 29,
2011
July 29,
2011
July 29,
2011
July 29,2011
December30, 2011
December30, 2011
December30, 2011
December30, 2011
December30, 2011

2.200 June 30, 2017
August 29,
2014
August 31,
2015
August 31,
2016

1.710

FUKUOKA REIT CORPORATION(Note 4)

July 31, 201418

II. Semiannual Report

Expenses and Liabilities
Category
LenderBalance as Balance as Averageof March 1, of August 31, interest
2013
2013
rate (%)

Drawdown
date

December30, 2011
January 31,
The Kagoshima Bank
2012
January 31,
Resona Bank
2012
Sumitomo Mitsui Banking
January 31,
Corporation2012
February
29,
Mizuho Bank (Note 3)
2012
Mitsubishi UFJ Trust and Banking March 1,
Corporation2012
Sumitomo Mitsui Banking
March 30,
Corporation
2012
March 30,
Resona Bank
2012
March 30,
The Higo Bank
2012
The Bank of Fukuoka
The Nishi-Nippon City Bank
Oita Bank
The Miyazaki Bank
June 29,
The Shinwa Bank
2012
Long-term The Iyo Bank
debt
The Bank of Saga
The Eighteenth Bank
The Kitakyushu Bank
September
Sumitomo Mitsui Trust Bank28, 2012
SeptemberResona Bank, Limited
28, 2012
February 1,
The Nishi-Nippon City Bank
2013
February 28,
The Nishi-Nippon City Bank
2013
February
28,
Mizuho Bank (Note 3)
2013
February 28,
Sumitomo Mitsui Trust Bank
2013
Mitsubishi UFJ Trust and Banking February 28,
Corporation2013
February 28,
Aozora Bank
2013
Mitsubishi UFJ Trust and Banking March 29,
Corporation
2013
June 28,
Aozora Bank
2013
Subtotal
Total
The Kitakyushu Bank

(mm of yen)

(mm of yen)

(Note 1)

500

500

1.182

100

100

1.168

400

400

1.218

500

500

1.338

500

500

1.117

2,000

2,000

1.170

500

500

1.203

600

600

1.253

300

300

1.203

1,000
1,000
700
700
600
500
500
500
500

1,000
1,000
700
700
600
500
500
500
500

0.852

600

600

0.652

2,000

2,000

1.033

2,500

2,500

0.777

1,900

1,900

0.750

1,700

1,700

0.750

1,100

1,100

0.800

1,500

1,500

0.600

600

600

0.600

–

600

0.592

–

1,000

0.630

68,37574,67554,80071,100

Repayment
date

Repayment
methodDecember 30,
2016
January 31,
2017
January 31,
2017
January 31,
2019
February 29,
2016
March 31,2017
March 31,2017
March 31,2017
March 31,2017

Lump-sum
Refinance
upon maturity
fund
Lump-sum
Refinance
upon maturity
fund
Lump-sum
Refinance
upon maturity
fund
Lump-sum
Refinance
upon maturity
fund
Lump-sum
Refinance
upon maturity
fund
Lump-sum Acquisition
upon maturity
fund
Lump-sum
Refinance
upon maturity
fund
Lump-sum
Refinance
upon maturity
fund
Lump-sum
Refinance
upon maturity
fund

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

Lump-sumupon maturity

Refinance
fund

No collateral/
No guarantee

September 30, Lump-sum
Refinance
2016
upon maturity
fund
September 29, Lump-sum
Refinance
2017
upon maturity
fund
February 29,
Lump-sum Acquisition
2020
upon maturity
fund
February 28,
Lump-sum
Refinance
2018
upon maturity
fund
February 29,
Lump-sum
Refinance
2020
upon maturity
fund
February 28,
Lump-sum
Refinance
2018
upon maturity
fund
February 28,
Lump-sum
Refinance
2018
upon maturity
fund
February 28,
Lump-sum
Refinance
2018
upon maturity
fund
March 30,
Lump-sum
Refinance
2018
upon maturity
fundJune 30,
Lump-sum
Refinance
2020
upon maturity
fund

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

June 30,
2017

Use offunds

Description(Note 1) The average interest is a weighted-average figure during the fiscal period and is rounded to the third decimal place. Furthermore, the average interest 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 swap.
(Note 2) Borrowings by committed line of credit.
(Note 3) Mizuho Corporate Bank, Ltd. was renamed to Mizuho Bank, Ltd. as of July 1, 2013.
(Note 4) The debt is subject to repayment of 75 million yen on the final day of every 6 months following the final day of December 2009 as the initial repayment date, with 1,875 million yen to be repaid on
the final repayment date. Furthermore, as the 150 million yen scheduled for repayment within a year is included in Long-term debt for the convenience of comparison, the balances do not match thefigures recorded on the balance sheets as Current maturities of long-term debt and Long-term debt.

3. Status of investment corporation bonds
No relevant items

FUKUOKA REIT CORPORATION

19

II. Semiannual Report

Acquisitions and Sales during the 18th Fiscal Period
1. Acquisition and sale of real estate and asset-backed securities, etc.
Acquisition
Asset type
Real estate in Trust
Real estate in Trust
Real estate in Trust(Note)Name of real estate

Acquisition
date

D-Wing Tower
Hotel FORZA Oita
Tenjin North Front Building
Total

Sale

Acquisition price Transfer date
(mm of yen)March 1, 2013
March 1, 2013
March 28, 2013

2,800
1,530
2,800
7,130

Sale priceBook value

–
–
–
–

–
–
–
–

–
–
–

(mm of yen)

(mm of yen)

Gain or loss on
sale(mm of yen)

–
–
–
–

The acquisition price refers to the amount (purchasing prices shown on the purchasing contracts) not including expenses for the acquisition of relevant properties (transaction brokerage fees and taxes
and other public charges, etc.).

2. Acquisition and sale of other assets
No relevant items

3. Survey on prices of specified assets, etc.
(1) Real estate, etc.
Acquisitionor saleProperty name

Asset typeTransactiondateAcquisition
Real estate
price or saleappraisal
value
price (Note 1) (Note 2) (mm of yen)

Real estate appraiser

Appraisal date

(mm of yen)

Acquisition D-Wing Tower

Real estate in
Trust

March 1,
2013

2,800

2,960

Tanizawa Sogo Appraisal Co., Ltd.

December 1,
2012

Acquisition Hotel FORZA Oita

Real estate in
Trust

March 1,
2013

1,530

1,530

Japan Real Estate InstituteDecember 1,
2012

Tenjin North Front
Building

Real estate in
Trust

March 28,
2013

2,800

2,920

Japan Real Estate InstituteFebruary 1,
2013

Acquisition(Note 1) The acquisition price refers to the amount (purchasing prices shown on the purchasing contracts) not including expenses for the acquisition of relevant properties (transaction brokerage fees and taxes
and other public charges, etc.).
(Note 2) The appraisal value above is based on the “Real Estate Appraisal Standards, Specific Thesis Chapter 3: Appraisal on Prices of Real Estate Subject to Securitization.”(2) Other
Of those transactions carried out by FRC that are required to have the value, etc. reviewed pursuant to the provisions of Article
201 of the Investment Trusts Act other than the transactions described in (1) above, two interest rate swap transactions were
subject to the review and FRC received review reports from PricewaterhouseCoopers Aarata.

FUKUOKA REIT CORPORATION

20

II. Semiannual Report

Acquisitions and Sales during the 18th Fiscal Period
4. Transactions with interested parties and major unitholders(1) Transaction status
FRC conducted the following transactions with interested parties, etc. and major unitholders during the 18th fiscal period.
Transaction amount, etc.

Category

Sale amount, etc. (thousands of yen)

Purchase amount, etc. (thousands of yen)
7,130,000–

Of which, purchase amount from interested parties, etc.
and major unitholders

Total

Of which, sale amount to interested parties, etc.
and major unitholders

1,530,000 [21.5%]– [–]Breakdown of transactions with interested parties, etc. and major unitholders
Fukuoka Jisho Co., Ltd.
Total

1,530,000 [21.5%]– [–]1,530,000 [21.5%]– [–](Note 1) The figures in the above table refer to the amounts shown on the purchasing contracts.
(Note 2) Interested parties, etc. and major unitholders refer to the interested parties of the asset management company who have concluded an asset management agreement with FRC and are designatedin Article 123 of the Enforcement Order of the Act on Investment Trusts and Investment Corporations, and major unitholders of the asset management company as defined in Article 29-4-2 of the
Financial Instruments and Exchange Act. Of these interested parties, etc. and major unitholders, the above table indicates the business partner with which FRC conducted transaction during the 18th
fiscal period. Furthermore, Fukuoka Jisho Co., Ltd. is an interested party, etc. as well as a major unitholder.

(2) Amount of fees paid, etc.
FRC paid the following fees to the interested parties, etc. and major unitholders during the 18th fiscal period.
Category

Total paid fees Breakdown of transactions with interested parties, etc. and major unitholders(A)
Paid amount (B)Paid party(thousands of yen)(thousands of yen)

Property transaction brokerage fees (Note 2)

56,000Property leasing brokerage fees (Note 4)

15,683

Property management fees (Note 3)

268,577

Outsourcing fees (Note 4) (Note 6)

1,264,199

Other operating expenses (Note 4)

1,115,333

Fukuoka Jisho Co., Ltd.
Fukuoka Jisho Co., Ltd.
Park Place Oita Co., Ltd.
Fukuoka Jisho Co., Ltd.
Park Place Oita Co., Ltd.
Fukuoka Jisho Co., Ltd.
Park Place Oita Co., Ltd.
Sunlife Co., Ltd.
Park Place Oita Co., Ltd.
Fukuoka Jisho Co., Ltd.
Sunlife Co., Ltd.

28,0005,572
1,145
169,678
87,864894,168
210,51755,087
213,723
90,451
4,596(B)/(A)
(%)

50.0
35.5
7.3
63.2
32.7
70.7
16.7
4.4
19.2
8.1
0.4

(Note 1) Interested parties, etc. and major unitholders refer to the interested parties, etc. of the asset management company who have concluded an asset management agreement with FRC and aredesignated in Article 123 of the Enforcement Order of the Act on Investment Trusts and Investment Corporations, and major unitholders of the asset management company as defined in Article 29-42 of the Financial Instruments and Exchange Act. Of these interested parties, etc. and major unitholders, the above table indicates the paid parties to which FRC paid fees during the 18th fiscal period.
Fukuoka Jisho Co., Ltd. is an interested party, etc. as well as a major unitholder, while Park Place Oita Co., Ltd. and Sunlife Co., Ltd. are interested parties, etc.
(Note 2) The property transaction brokerage fees paid upon real estate acquisitions are included in the acquisition cost of the relevant real estate.
(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.
7,402 thousand yen
Park Place Oita Co., Ltd.
9,113 thousand yen(Note 4) The real estate leasing brokerage fees, outsourcing fees and other operating expenses include property leasing brokerage fees paid to third parties through interested parties, etc.
(Note 5) Aside from the paid fees shown above, FRC paid the following amounts for repairs, etc. that were ordered to interested parties, etc. during the 18th fiscal period. The amounts include construction
work fees paid to third parties through interested parties, etc.
Fukuoka Jisho Co., Ltd.
215,175 thousand yen
Park Place Oita Co., Ltd.
255,741 thousand yen
Sunlife Co., Ltd.
28,524 thousand yen(Note 6) The outsourcing fees shown above are paid fees, etc. regarding building management outsourcing fees, and do not coincide with the outsourcing fees described in VI. Notes to financial statements (Notes
to statements of income) that include property management fees and others.

FUKUOKA REIT CORPORATION

21

II. Semiannual Report

Acquisitions and Sales during the 18th Fiscal Period
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 land and building transaction business but
there was no relevant transaction conducted in the 18th fiscal period. Moreover, the asset management company does notconcurrently conduct any of the class 1 financial instruments transaction business, class 2 financial instruments transaction
business or real estate syndication business, and has no such transactions with FRC.

Overview of Accounting
1. Assets, liabilities, principal and profits/loss
Please refer to the IV. Balance sheets, V. Statements of income, VI. Statements of changes in net assets, VII. Cash flow
statements, and VIII. Notes to financial statements on later pages of this report.

2. Changes in calculation method of depreciation
No relevant items

3. Changes in valuation method of real estate
No relevant items

4. Overview of self-managed investment trust beneficiary certificatesNo relevant items

Other
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.

FUKUOKA REIT CORPORATION

22

III. Independent Auditor's Report

FUKUOKA REIT CORPORATION

23

IV. Balance Sheets(thousands of yen)
18th fiscal period

17th fiscal period

Account

as of February 28, 2013

as of August 31, 2013

AssetsCurrent assets
Cash and deposits

2,134,854

2,986,790

Cash and deposits in trust

4,918,493

4,457,189

Operating accounts receivable278,535

350,841

Prepaid expenses

236,013333,377

Consumption taxes receivable–

74,887

Deferred tax assets

21

17

15,916

5,167

7,583,835

8,208,271

OthersTotal current assets
Noncurrent assets
Property, plant and equipment
Buildings in trust
Accumulated depreciation*1

71,580,539

Structures in trust

1,143,589

Accumulated depreciation(349,225)

Machinery and equipment in trust

434,262

Accumulated depreciation(161,010)

Vehicles and transport equipment in trust
Accumulated depreciation

58,320,264
794,364(380,913)

273,251(179,676)

Accumulated depreciation(667,938)

61,516,335
777,857

546,092
366,415747–
1,116,342

76,005,077(14,488,742)
1,158,771–

Tools and fixtures in trust
Land in trust*1(13,260,275)

–

(7)

739

1,139,208
448,404
90,801,517*1(729,560)

409,647*1

93,998,578–

192,182

150,637,801

157,261,757

1,765,318

1,765,318

18,987

16,205

1,784,305

1,781,523

Lease and guarantee deposits

10,00010,000

Lease and guarantee deposits in trust

100,000

100,000

Long-term prepaid expenses

449,429

463,384

Total investment and other assets

559,429

573,384

152,981,536

159,616,665

Investment unit issuance expenses

8,957

32,190Total deferred assets

8,957

32,190160,574,329

167,857,128

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

Total noncurrent assets
Deferred assets

Total assets

FUKUOKA REIT CORPORATION

24

IV. Balance Sheets(thousands of yen)Account

18th fiscal period

17th fiscal period

as of February 28, 2013

as of August 31, 2013

Liabilities
Current liabilities
Operating accounts payable

463,243592,753

Short-term debt

2,700,000–

Current maturities of long-term debt

3,750,000

16,450,000

Account payable-other

32,873

17,409Accrued expenses

311,485

325,769983

885

Accrued consumption taxes

157,514–

Advances received

847,489

896,621

Deposits received

585,651

904,777

8,849,242

19,188,217

68,225,000

54,650,000

316,959

321,369

Income taxes payable

Total current liabilities
Noncurrent liabilities
Long-term debt
Tenant leasehold and security deposits
Tenant leasehold and security deposits received in trust

12,001,108*1

Total noncurrent liabilities*1

11,985,078

80,543,068

66,956,447

89,392,310

86,144,664

69,177,628

79,441,236

Unappropriated surplus

2,004,391

2,271,226

Total surplus

2,004,391

2,271,226

71,182,019

81,712,463

Total liabilities
Net Assets
Unitholders' equity
Unitholders’ capital
Surplus

Total unitholders' equity
Total net assets
Total liabilities and net assets

71,182,019*3

160,574,329

FUKUOKA REIT CORPORATION

25*381,712,463
167,857,128

V. Statements of Income(thousands of yen)
18th fiscal period

17th fiscal period

Account

September 1, 2012 to February 28, 2013

March 1, 2013 to August 31, 2013

Operating revenues
Leasing revenues - real estate*1

6,784,009

Other leasing revenues - real estate*1416,974*1, *2

4,025,294

7,200,984*1

7,095,131*1

470,254*1, *2

4,157,501

7,565,385

Operating expenses
Expenses related to leasing business
Asset management fees

422,387445,912

Asset custody fees

5,935

6,071

Administrative service fees

47,06347,022

Director’s compensations

9,600

9,600

Other operating expenses

68,097

Operating income

4,578,378

50,6272,622,606

4,716,734
2,848,650

Non-operating revenues
Interest received
Others

674

758

1,955

2,629

485

1,243

Non-operating expenses
Interest payment
Amortization of investment unit issuance expenses
Financing related expenses

492,687

443,830

4,478
122,322

Ordinary income

10,021
619,488

123,8022,005,746

Net income before income taxes

2,272,239

2,005,746

Income taxes-current

1,119

Income taxes-deferred324

Net income

577,654
2,272,239

1,038
1,444

4

1,042

2,004,301

2,271,196

Surplus brought forward

89

29

Unappropriated surplus

2,004,391

2,271,226

FUKUOKA REIT CORPORATION

26

VI. Statements of Changes in Net Assets
17th fiscal period (September 1, 2012 to February 28, 2013)
Item
Balance as of September 1, 2012
Changes in the current fiscal period
Dividend of surplus
Net income
Total of changes in the current fiscal period
Balance as of February 28, 2013

(thousands of yen)
Total unitholders' equity

69,177,628

Unitholders' equity
Surplus
Unappropriated surplus
1,992,637

71,170,265

71,170,265–––
69,177,628(1,992,548)
2,004,301
11,7532,004,391(1,992,548)
2,004,301
11,75371,182,019(1,992,548)
2,004,301
11,75371,182,019

Unitholders’ capital

18th fiscal period (March 1, 2013 to August 31, 2013)

Item
Balance as of March 1, 2013
Changes in the current fiscal period
Issuance of new investment units
Dividend of surplus
Net income
Total of changes in the current fiscal period
Balance as of August 31, 2013

Total net assets(thousands of yen)
Total unitholders' equity

69,177,628

Unitholders' equity
Surplus
Unappropriated surplus
2,004,391

71,182,019

71,182,019

10,263,608––
10,263,608
79,441,236–(2,004,361)
2,271,196
266,835
2,271,226

10,263,608(2,004,361)
2,271,196
10,530,444
81,712,463

10,263,608(2,004,361)
2,271,196
10,530,444
81,712,463

Unitholders’ capital

FUKUOKA REIT CORPORATION

27

Total net assets

VII. Cash Flow Statements(thousands of yen)
17th fiscal period

Account

18th fiscal period

September 1, 2012 toFebruary 28, 2013

March 1, 2013 toAugust 31, 2013

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

2,005,746

2,272,239

Depreciation and amortization expenses

1,268,477

1,343,234

Amortization of investment unit issuance expenses

4,478

10,021

Interest received

(674)

(758)

Interest payment

492,687

443,830

Decrease (increase) in operating account receivables

32,539(72,305)

Decrease (increase) in consumption taxes receivable

91,789(74,887)

Increase (decrease) in accrued consumption taxes

157,514(157,514)

Increase (decrease) in operating account payable(64,378)

23,264

Increase (decrease) in account payable-other(34,726)(15,345)

Increase (decrease) in accrued expenses

2,725

14,403

Increase (decrease) in advances received

9,530

49,131

Increase (decrease) in deposits expenses(480,528)

319,125

Decrease (increase) in prepaid expenses

72,177(97,364)

Decrease (increase) in long-term prepaid expenses

15,966(13,955)

Others, net

51,032

10,264

Subtotal

3,624,358

4,053,386

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

674

758

(498,484)(443,951)(5,663)(1,136)

3,120,885

3,609,056(3,475,667)(7,858,163)

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

(129)

—

Proceeds from tenant leasehold and security deposits

15,861

4,410

Repayments of tenant leasehold and security deposits(4,494)—

Proceeds from tenant leasehold and security deposits in trust

464,505

359,717

Repayment of tenant leasehold and security deposits in trust(66,106)(375,748)

Proceeds from restricted trust deposits

2,895

4,119

Payments for restricted trust deposits(4,343)(32,165)(3,067,479)(7,897,830)

Net cash provided by (used in) investment activities
Net cash provided by (used in) financial activities
Increase in short-term debt payable

3,800,000—

Decrease in short-term debt payable(2,200,000)(2,700,000)

Proceeds from long-term debt payable

11,900,000

1,600,000

Repayment of long-term debt payable(12,175,000)(2,475,000)

Proceeds from issuance of investment units—

10,263,608(1,991,239)(2,003,994)—(33,254)

Net cash provided by (used in) financial activities(666,239)

4,651,360

Net increase (decrease) in cash and cash equivalents(612,834)

362,586

Dividends paid
Payment of investment unit issuance expenses

Balance of cash and cash equivalents at beginning of period
Balance of cash and cash equivalents at end of period

7,637,703
7,024,869*1

FUKUOKA REIT CORPORATION

28

7,024,869*1

7,387,455

VIII. Notes to Financial Statements(Significant accounting policies)
1. Depreciation method for noncurrent assets(1) Property, plant and equipment
Depreciation is calculated using the straight-line method.
The useful lives of major items of property, plant and equipment are as follows:
10–50 years
Buildings in trust:
15–50 years
Structures in trust:
15–17 years
Machinery and equipment in trust:
7 years
Vehicles and transport equipment in trust:
5–15 years
Tools and fixtures in trust:

2. Accounting for deferred assets

Investment unit issuance expenses
Investment unit issuance expenses are amortized utilizing the straight-line method over three years.

3. Standards for recognition of revenues andexpenses

Accounting treatment of property taxes, etc.
In connection with property taxes, city planning taxes and depreciable asset taxes, FRC uses themethod of charging the corresponding amounts of assessed taxes to the current fiscal period as expenses
related to leasing business.
Furthermore, FRC includes an amount equivalent to the property taxes, etc. paid to the sellers during
the first fiscal year as an acquisition cost, not as expenses, in connection with the acquisition of real estateor entrusted beneficiary interests in real estate as entrusted property. Property taxes, etc. capitalized inacquisition cost amounted to 58,191 thousand yen for the fiscal period ended August 31, 2013.

4. Method of hedge accounting(1) Method of hedge accounting
Deferred hedge accounting is applied for interest rate swap transactions. However, special treatment
is applied for interest rate swap transactions that satisfy the requirement for special treatment.
(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
treatment for interest rate swap transactions.

5. Scope of funds (cash and cash equivalents)
on cash flow statements

The funds (cash and cash equivalents) in the cash flow statements consist of cash on hand and cash intrust; deposits that can be withdrawn at any time and deposits in trust; and short-term investments witha maturity of 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
the financial statements(1) 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 theentrusted properties are recorded in relevant accounts on the balance sheets and statements of income.
Furthermore, the following material accounts are separately stated in the balance sheets for entrusted
properties recorded in relevant accounts.
① Cash and deposits in trust② Buildings in trust, structures in trust, machinery and equipment in trust, vehicles and transport
equipment in trust, tools and fixtures in trust, land in trust and construction in progress in trust③ Leasehold right in trust④ Other intangible assets in trust⑤ Lease and guarantee deposits in trust⑥ Tenant leasehold and security deposits received in trust(2) Accounting for consumption taxes
National and local consumption taxes are accounted with the consumption taxes excluded.

FUKUOKA REIT CORPORATION

29

VIII. Notes to Financial Statements(Notes to balance sheets)
17th fiscal period

18th fiscal period

as of February 28, 2013

as of August 31, 2013

*1 Assets pledged as collateral and secured liabilities
Assets pledged as collateral are as follows:
Buildings in trust
Land in trust
Total
Secured liabilities are as follows:*1 Assets pledged as collateral and secured liabilities
Assets pledged as collateral are as follows:(thousands of yen)
5,687,671
11,618,595
17,306,266(thousands of yen)
Tenant leasehold and security deposits
2,267,952
received in trust
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
6,000,000
Outstanding debt at end of period
1,400,000
Unused committed line of credit at end of
4,600,000
periodCommitted line of credit agreement 2(thousands of yen)
Credit limit
6,000,000
Outstanding debt at end of period
1,300,000
Unused committed line of credit at end of
4,700,000
period
*3. Minimum net assets designated in Article 67- 4 in the Act on
Investment Trusts and Investment Corporations(thousands of yen)
50,000

Buildings in trust
Land in trust
Total
Secured liabilities are as follows:(thousands of yen)
5,734,249
11,618,595
17,352,844(thousands of yen)
Tenant leasehold and security deposits
2,130,751
received in trust
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
6,000,000
Outstanding debt at end of period–
Unused committed line of credit at end of
6,000,000
periodCommitted line of credit agreement 2(thousands of yen)
Credit limit
6,000,000
Outstanding debt at end of period–
Unused committed line of credit at end of
6,000,000
period
*3. Minimum net assets designated in Article 67- 4 in the Act on
Investment Trusts and Investment Corporations(thousands of yen)
50,000FUKUOKA REIT CORPORATION

30

VIII. Notes to Financial Statements(Notes to statements of income)17th fiscal period

18th fiscal period

September 1, 2012 to February 28, 2013

March 1, 2013 to August 31, 2013

*1. Breakdown of revenues and expenses related to real estate leasing business
A. Real estate leasing business revenues(thousands of yen)
Leasing revenues - real estate
Rents
5,362,496
Common charges
1,010,759
Parking revenues
410,753
Total
6,784,009
Other leasing revenues - real estate
Incidental income
365,285
Other miscellaneous income
51,688
Total
416,974
Total real estate leasing business revenues
7,200,984
B. Expenses related to real estate leasing business
Expenses related to leasing businessOutsourcing fees
1,500,160
Repair and maintenance expenses
193,294
Taxes and other public charges
543,378
Insurance premiums and trust compensation
47,811
Utilities expenses
318,097
Depreciation and amortization expenses
1,268,477
154,075
Other expenses related to real estate leasing
business
Total expenses related to real estate leasing
4,025,294
business
C. Revenues and expenses related to real estate
3,175,689
leasing business (A - B)
*2. Transactions with major unitholders(thousands of yen)
Expenses related to real estate leasing
1,249,713
business*1. Breakdown of revenues and expenses related to real estate leasing business
A. Real estate leasing business revenues(thousands of yen)
Leasing revenues - real estate
Rents
5,625,804
Common charges
1,036,880
Parking revenues
432,446
Total
7,095,131
Other leasing revenues - real estate
Incidental income
435,120
Other miscellaneous income
35,133
Total
470,254
Total real estate leasing business revenues
7,565,385
B. Expenses related to real estate leasing business
Expenses related to leasing businessOutsourcing fees
1,532,776
Repair and maintenance expenses
147,861
Taxes and other public charges
551,509
Insurance premiums and trust compensation
52,759
Utilities expenses
411,171
Depreciation and amortization expenses
1,343,234
118,189
Other expenses related to real estate leasing
business
Total expenses related to real estate leasing
4,157,501
business
C. Revenues and expenses related to real estate
3,407,883
leasing business (A - B)
*2. Transactions with major unitholders(thousands of yen)
Expenses related to real estate leasing
1,222,021
business(Notes to statements of changes in net assets)
17th fiscal period

18th fiscal period

September 1, 2012 to February 28, 2013

March 1, 2013 to August 31, 2013

Total number of authorized investment units and total number of investment
units issued
Total number of authorized investment units
2,000,000 units
Total number of investment units issued
123,050 units

Total number of authorized investment units and total number of investment
units issued
Total number of authorized investment units
2,000,000 units
Total number of investment units issued
138,000 units

FUKUOKA REIT CORPORATION

31

VIII. Notes to Financial Statements(Notes to cash flow statements)(thousands of yen)

17th fiscal period

18th fiscal period

September 1, 2012 to February 28, 2013

March 1, 2013 to August 31, 2013

*1. Relationship between the balance of cash and cash equivalents at end of period *1. Relationship between the balance of cash and cash equivalents at end of period
and the amounts of the corresponding accounts on the balance sheets
and the amounts of the corresponding accounts on the balance sheets(as of February 28, 2013)(as of August 31, 2013)
Cash and deposits
2,134,854
Cash and deposits
2,986,790
Cash and deposits in trust
4,918,493
Cash and deposits in trust
4,457,189
Restricted trust deposits (Note)(28,478)
Restricted trust deposits (Note)(56,524)
Cash and cash equivalents
7,024,869
Cash and cash equivalents
7,387,455(Note) Restricted trust deposits are trust deposits reserved for refunding tenant(Note) Restricted trust deposits are trust deposits reserved for refunding tenantleasehold and security deposits deposited by tenants and for otherleasehold and security deposits deposited by tenants and for otherpurposes.
purposes.

(Notes to leases)(thousands of yen)

17th fiscal period

18th fiscal period

The future lease revenues under the non-cancellable operating leases were as
follows.
(as of February 28, 2013)
Due within 1 year
6,177,595
Due after 1 year
32,797,027
Total
38,974,623

The future lease revenues under the non-cancellable operating leases were as
follows.
(as of August 31, 2013)
Due within 1 year
6,146,906
Due after 1 year
30,428,244
Total
36,575,150

as of February 28, 2013

as of August 31, 2013

(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 or issuance of investment units for property acquisitions, repair and maintenancework, 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 policyof establishing a solid financial structure, and conducts conservative operations intended to secure financial stability andliquidity 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 safety.
FRC may conduct derivative transactions only for the purpose of hedging the interest rate fluctuation risks in the future,and not conduct any speculative transactions.
(2) Description of financial instruments and associated risks, and risk management structure
Short-term debt and long-term debt are funds procured primarily for acquiring real estate trust beneficiary interests.
Borrowings are exposed to liquidity risks upon debt payment dates, but FRC works to mitigate the risks by such measures
as appropriately controlling the ratio of interest-bearing debt to total assets while executing commitment line agreementswith local financial institutions that are sponsors to secure liquidity at hand.
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 (interest
rate swap transactions) for part of the borrowings with floating interest rates in order to hedge the risk of fluctuations in therates of interests to be paid. Furthermore, with regard to the method to assess the effectiveness of hedging, assessment of
the effectiveness is omitted as it has been judged that requirements are satisfied for special treatment for interest rate swap
transactions. As for derivative transactions, FRC executes and manages them in accordance with its financial derivativetransaction management policies and, when conducting them, it does so only with financial institutions it judges to have
FUKUOKA REIT CORPORATION

32

VIII. Notes to Financial Statements

certain creditworthiness in reference to their credit ratings so that the counterparty risks are reduced.
FRC manages surplus funds in large time deposits, etc. Such deposits have credit risks of failure of the financial institutions
holding the deposits and other credit risks. FRC mitigates the risks by limiting the financial institutions to those with certain
creditworthiness in reference to their credit ratings and by setting the duration of deposits only at shorter periods.
As for tenant leasehold and security deposits received in trust, they are deposits from tenants and are exposed toliquidity risks where tenants may move out before the contracts expire. FRC mitigates the risks by such measures as
securing liquidity on hand.
(3) Supplementary explanation on matters concerning fair value of financial instruments
The fair value of financial instruments, aside from values based on market price, may include values based on reasonablecalculations when there is no market price. Certain assumptions are adopted in calculating those values, and there may becases where the values will vary when different assumptions are adopted.
As for the contract value and other conditions of derivative transactions indicated in "2. Matters concerning fair value offinancial instruments", the value itself is not an indicator showing the market risks related to such transactions.

2. Matters concerning fair value of financial instruments
The following are the book values recorded on the balance sheets, fair values and the difference between these amounts as ofFebruary 28, 2013. Please note that the following table does not include those for which discerning of fair value is recognized
to be extremely difficult (refer to (Note 2)).
(thousands of yen)

(1) Cash and deposits(2) Cash and deposits in trust
Total of assets(3) Short-term debt
(4) Current maturities of long-term debt
(5) Long-term debt
(6) Tenant leasehold and security deposits received in trust
Total of liabilities(7) Derivative transactions
Total of derivative transactions

Book value recorded on
the balance sheets
2,134,854
4,918,493
7,053,347
2,700,000
3,750,000
68,225,000
1,682,045
76,357,045

Difference

Fair value (Note 1)

–
–
–
–

2,134,854
4,918,493
7,053,347
2,700,000
3,793,587
68,900,308
1,636,029
77,029,924

43,587675,308(46,015)
672,879

–
–

–
–

–
–

The following are the book values recorded on the balance sheets, fair values and the difference between these amounts as ofAugust 31, 2013. Please note that the following table does not include those for which discerning of fair value is recognized to
be extremely difficult (refer to (Note 2)).
(thousands of yen)

(1) Cash and deposits(2) Cash and deposits in trust
Total of assets(3) Short-term debt
(4) Current maturities of long-term debt
(5) Long-term debt
(6) Tenant leasehold and security deposits received in trust
Total of liabilities(7) Derivative transactions
Total of derivative transactions

Book value recorded on
the balance sheets
2,986,790
4,457,189
7,443,980

Difference

Fair value (Note 1)

–

–

–
–
–
–

16,450,000
54,650,000
1,526,511
72,626,511

16,563,805
54,933,212
1,481,530
72,978,547

113,805
283,212(44,980)
352,036

–
–

–
–

–
–

2,986,790
4,457,189
7,443,980(Note 1)		 Calculation method for fair value of financial instruments(1)		Cash and deposits, (2) Cash and deposits in trust and (3) Short-term debt
		 As these are settled within a short period of time, the fair value is approximately the same as the book value and is thus stated at that book value.
(4) Current maturities of long-term debt and (5) Long-term debt
		 Of the fair value of these financial instruments, the fair value of long-term debt with fixed interest rates (including debt with practical fixed interest rates through interest rate swaps) is based on the		 method of calculating by 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.
		 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) and		 thus is considered to be nearly equal to the book value.
FUKUOKA REIT CORPORATION

33

VIII. Notes to Financial Statements(6) Tenant leasehold and security deposits received in trust
		 Tenant leasehold and security deposits received in trust, which are deposited by the lessees, are calculated using the method to discount the future cash flows of such by a reasonably estimated 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)		 Financial instruments for which discerning of fair value is recognized to be extremely difficult

17th fiscal period

as of February 28, 2013

Tenant leasehold and security
deposits received in trust(thousands of yen)
18th fiscal period
as of August 31, 2013

10,319,063

10,458,566

		 Recorded on the balance sheets as tenant leasehold and security deposits received in trust is not subject to disclosure of fair value as it is recognized to be extremely difficult to discern the fair value.
		 This is because future cash flows cannot be estimated since there is no market price and it is difficult to assume the reimbursement dates since there is a possibility of cancellation, renewal and re		 execution of lease contracts by lessees even if the contract terms are fixed and since there is no telling of any tendency of tenants moving out of the properties owned by FRC from analyses of past		 results as they are too individually specific.
(Note 3)		 Amount of redemption of monetary claims scheduled to be due after closing of accounts (as of February 28, 2013)(thousands of yen)Due in 1 year or less
2,134,854
4,918,493
7,053,347

Cash and deposits
Cash and deposits in trust
Total

Amount of redemption of monetary claims scheduled to be due after closing of accounts (as of August 31, 2013)(thousands of yen)Due in 1 year or less
2,986,790
4,457,189
7,443,980

Cash and deposits
Cash and deposits in trust
Total(Note 4)		 Amount of repayment of long-term debt scheduled to be due after closing of accounts (as of February 28, 2013)

(thousands of yen)Due in 1 year or less
3,750,000

1 to 2 years
14,750,000

2 to 3 years
13,650,000

3 to 4 years
10,250,000

4 to 5 years
23,875,000

Due after 5 years
5,700,000

4 to 5 years
10,200,000

Due after 5 years
5,700,000

		 Amount of repayment of long-term debt scheduled to be due after closing of accounts (as of August 31, 2013)

(thousands of yen)Due in 1 year or less
16,450,000

1 to 2 years
6,650,000

2 to 3 years
11,650,000

3 to 4 years
20,450,000(Notes to derivative transactions)
The following is the contract amount or amount equivalent to the principal provided in the contract, etc. as of the closing ofaccounts for each method of hedge accounting. (February 28, 2013)

(thousands of yen)
Method of hedge accounting

Type of derivative transactions, etc.

Main hedged
item

Special treatment for interest rate swaps

Interest rate swap transaction
Payable fixed; Receivable floating

Long-term debt

Contract amount, etc.
Of which,exceeding 1year
10,300,000

10,300,000

Calculation
Fair value method for thefair value(55,289)(Note 1)

(Note 2)

(Note 1) Transactions for which special treatment 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 therelevant long-term debt (Please refer to “Notes to financial instruments” 2. Matters concerning fair value of financial instruments (Note1) (5)).
(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.

FUKUOKA REIT CORPORATION

34

VIII. Notes to Financial Statements

The following is the contract amount or amount equivalent to the principal provided in the contract, etc. as of the closing ofaccounts for each method of hedge accounting. (August 31, 2013)

(thousands of yen)
Method of hedge accounting

Type of derivative transactions, etc.

Main hedged
item

Special treatment for interest rate swaps

Interest rate swap transaction
Payable fixed; Receivable floating

Long-term debt

Contract amount, etc.
Of which,exceeding 1year
18,300,000

8,000,000

Calculation
Fair value method for thefair value(25,575)(Note 1)

(Note 2)

(Note 1) Transactions for which special treatment 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 therelevant long-term debt (Please refer to “Notes to financial instruments” 2. Matters concerning fair value of financial instruments (Note1) (5)).
(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.

(Notes to tax effect accounting)
17th fiscal period

18th fiscal period

1. Breakdown of primary causes for occurrence of deferred tax assets anddeferred tax liabilities(Deferred tax assets)(thousands of yen)Amount of accrued business taxes notdeductible from taxable income
21
Total deferred tax assets
21(Deferred tax assets, net)
21
2. Breakdown of significant components that caused difference between effective
statutory income tax rate and effective income tax rate after application of tax
effect accounting(%)
Effective statutory income tax rate
36.38
Deductible dividend amount(36.36)Other
0.05
Effective income tax rate after application of
0.07
tax effect accounting

1. Breakdown of primary causes for occurrence of deferred tax assets and deferred
tax liabilities(Deferred tax assets)(thousands of yen)Amount of accrued business taxes notdeductible from taxable income
17
Total deferred tax assets
17(Deferred tax assets, net)
17
2. Breakdown of significant components that caused difference between effective
statutory income tax rate and effective income tax rate after application of tax
effect accounting(%)
Effective statutory income tax rate
36.38
Deductible dividend amount(36.37)
Other
0.03
Effective income tax rate after application of
0.05
tax effect accounting

as of February 28, 2013

as of August 31, 2013

(Notes to transactions with related parties)(1) Other affiliates and their parent companies and subsidiaries
17th fiscal period (from September 1, 2012 to February 28, 2013)

(thousands of yen)Classification

Name

Location

Capital

FRC’s share ofBusinessvoting rights,
description or
etc.
occupation[or ownership ofDescription of Transaction
Categorytransaction
amountBalanceat end ofperiodConsignment
Consignment
Operatingof real estate 1,249,713
of real estateaccounts(Note 3)management,
management, etc.
payableetc. (Note 1)

90,830Description ofrelationshipsuch in FRC]

Other affiliates

Fukuoka Jisho Hakata Ward,
4,000,000
Co., Ltd.
Fukuoka City
(Note 2)

Generalreal estatebusiness

Ownership in
FRC
Direct[11.34%]

Indirect(Note 3)[0.44%](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 Canal City Hakata, Canal City Hakata.B, Canal City Business Center and Taihaku
Street Business Center. The lease contract is a 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 properties covered by the said type of agreements, the above table shows figures that regard end tenants as direct lessees.
(Note 3) Of the amounts in the table above, consumption taxes are not included in the transaction amount but included in the balance at end of period.

FUKUOKA REIT CORPORATION

35

VIII. Notes to Financial Statements

18th fiscal period (from March 1, 2013 to August 31, 2013)

(thousands of yen)Classification

Name

Location

Capital

FRC’s share ofBusinessvoting rights,
description or
etc.
occupation[or ownership ofDescription ofrelationship

Description of Transaction
Categorytransaction
amountBalanceat end ofperiodsuch in FRC]

Fukuoka Jisho Hakata Ward,
Other affiliates Co., Ltd.
Fukuoka City

4,000,000(Note 3)Generalreal estatebusiness

Ownership in
FRC
Direct[10.11%]

Indirect[0.39%]

Purchase of
1,530,000–
Purchase of real
real estate(Note 4)(Note 1)
estate,Consignment
consignment
Operatingof real estate 1,222,021
of real estateaccounts(Note 4)
management, etc. management,
payable
(Note
2)
etc.

–
60,980(Note 4)(Note 1) Transaction terms and conditions are determined in reference to appraisal values by third parties and after negotiating on prices.
(Note 2) Transaction terms and conditions are determined in reference to market prices, etc. and by concluding business consignment agreements after negotiating on prices.
(Note 3) FRC has concluded a building lease and management consignment agreement with Fukuoka Jisho Co., Ltd. for Canal City Hakata, Canal City Hakata.B, Canal City Business Center and Taihaku
Street Business Center. The lease contract is a 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 properties covered by the said type of agreements, the above table shows figures that regard end tenants as direct lessees.
(Note 4) Of the amounts in the table above, consumption taxes are not included in the transaction amount but included in the balance at end of period.

(2) Affiliated companies, etc.
17th fiscal period (from September 1, 2012 to February 28, 2013)

(thousands of yen)Classification

Name

Location

Capital

FRC’s share ofBusinessvoting rights,
description or
etc.
occupation(or ownership ofDescription ofrelationship

Description of Transaction
Categorytransaction
amountBalanceat end ofperiodsuch in FRC)

Subsidiaries
of otheraffiliates

Park Place
Oita Co., Ltd Oita City, Oita

400,000

Real estatebusiness–

Subsidiaries
of otheraffiliates

Fukuoka
Realty Co.,
Ltd.

Asset
management
200,000of FRCand otherbusinesses–

Real estatebusiness–(Note 2)

Hakata Ward,
Fukuoka City

Subsidiaries
Yugen Kaisha Minato Ward,of other
DKD
Tokyo
affiliates

3,000

Consignment
Consignmentof real estateof real estate
management,
management, etc.
etc. (Note 1)
Asset
Payment
managementof assetof FRC, etc.
and concurrent management
service of officer fees (Note 4)

493,582(Note 6)422,387(Note 6)

Operatingaccounts
payable147,642

Accruedexpenses

194,200(Note 6)(Note 6)(Note 3)Purchase of realestatePurchase ofreal estate(Note 5)2,600,000(Note 6)––(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 real estate lease and management consignment agreement with Park Place Oita for Park Place Oita Co., Ltd. The lease contract is a 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 property covered by the said type of agreement, the above table shows
figures that regard end tenants as direct lessees.
(Note 3) Masayasu Saki, CEO & Representative Director of FRC, concurrently serves as Director 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) Transaction terms and conditions are determined in reference to appraisal values by third parties and after negotiating on prices.
(Note 6) Of the amounts in the table above, consumption taxes are not included in the transaction amount but included in the balance at end of period.

FUKUOKA REIT CORPORATION

36

VIII. Notes to Financial Statements

18th fiscal period (from March 1, 2013 to August 31, 2013)

(thousands of yen)Classification

Name

Location

Capital

FRC’s share ofBusinessvoting rights,
description or
etc.
occupation(or ownership ofDescription ofrelationship

Balanceat end ofperiodDescription of Transaction
Categorytransaction
amountsuch in FRC)

Subsidiaries
of otheraffiliates

Park Place
Oita Co., Ltd Oita City, Oita

400,000

Fukuoka
Realty Co.,
Ltd.

Asset
management
200,000of FRCand otherbusinesses(Note 2)

Real estatebusiness–

Consignment
Consignmentof real estateof real estate
management,
management, etc.
etc.

566,384–

Asset
Payment
managementof assetof FRC, etc.
and concurrent management
service of officer fees (Note 4)445,912(Note 5)

Operatingaccounts
payable160,595

Accruedexpenses

207,563(Note 5)(Note 1)

Subsidiaries
of otheraffiliates

Hakata Ward,
Fukuoka City

(Note 5)(Note 5)(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 real estate lease and management consignment agreement with Park Place Oita Co., Ltd. for Park Place Oita. The lease contract is a 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 property covered by the said type of agreement, the above table shows
figures that regard end tenants as direct lessees.
(Note 3) Masayasu Saki, CEO & Representative Director of FRC, concurrently serves as Director 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) Of the amounts in the table above, consumption taxes are not included in the transaction amount but included in the balance at end of period.

(Notes to properties for lease)
FRC owns retail, office buildings and residential properties for lease in the Kyushu area centering on Fukuoka Prefecture. The
following table provides the book value recorded on the balance sheets, amount of change during the period and fair value ofthese properties for lease.
(thousands of yen)
17th fiscal period

Use

RetailOffice buildings

Others

Total

September 1, 2012 toFebruary 28, 2013

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

18th fiscal period
March 1, 2013 toAugust 31, 2013

103,024,842(459,075)
102,565,767
104,205,000

102,565,767(235,789)
102,329,978104,255,000

40,501,175
2,338,935
42,840,110
47,340,000

42,840,110
2,523,508
45,363,618
50,800,000

7,088,012(71,783)
7,016,229
7,400,000

7,016,229
4,333,454
11,349,683
12,040,000

150,614,030
1,808,076
152,422,107
158,945,000

152,422,107
6,621,173
159,043,280
167,095,000(Note 1) Amount recorded on the balance sheets is the cost of acquisition less accumulated depreciation.
(Note 2) Of the amount of change during the 17th fiscal period, the amount of increase is primarily attributable to the acquisition of Tenjin Nishi-Dori Center Building (2,689 million yen) and capital expenditures(431 million yen), and the amount of decrease is primarily attributable to depreciation and amortization expenses (1,268 million yen). Of the amount of change during the 18th fiscal period, the amountof increase is primarily attributable to the new acquisition of properties (7,351 million yen in total) and capital expenditures (612 million yen), and the amount of decrease is primarily attributable todepreciation and amortization expenses (1,343 million yen).
(Note 3) The fair value at end of period is the appraisal value provided by outside real estate appraisers.

FUKUOKA REIT CORPORATION

37

VIII. Notes to Financial Statements

The following table provides the income (loss) from properties for lease.
(thousands of yen)
17th fiscal period

Use

RetailOffice buildings

Others

Total(Note)

September 1, 2012 toFebruary 28, 2013

Amount recorded on the statements 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 statements 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 statements 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 statements of income
Real estate leasing business revenues
Expenses related to real estate leasing business
Revenues and expenses related to real estate leasing business18th fiscal period
March 1, 2013 toAugust 31, 2013

4,979,441
2,868,952
2,110,489

4,965,784
2,864,757
2,101,026

1,950,664
1,036,961
913,7022,148,870
1,106,894
1,041,975

270,878
119,381
151,497

450,730
185,849
264,881

7,200,984
4,025,294
3,175,689

7,565,385
4,157,501
3,407,883

Real estate leasing business revenues and expenses related to real estate leasing business comprise 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.

(Notes to segment information)[Segment information]
Descriptions are omitted as FRC has a single business segment of real estate leasing business.

[Related information]

17th fiscal period (from September 1, 2012 to February 28, 2013)(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 on the statements of income.
(2) Information by region(a) Operating revenue
		 Descriptions are omitted as FRC’s operating revenues for outside customers in Japan exceed 90% of operating revenues
		 recorded on the statements 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 sheets.
(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 on the statements of income.

18th fiscal period (from March 1, 2013 to August 31, 2013)(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 on the statements of income.
(2) Information by region(a) Operating revenue
		 Descriptions are omitted as FRC’s operating revenues for outside customers in Japan exceed 90% of operating revenues
		 recorded on the statements of income.
FUKUOKA REIT CORPORATION

38

VIII. Notes to Financial Statements(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 sheets.
(3) Information by major customer
Descriptions are omitted as FRC’s operating revenues for an individual outside customer are less than 10% of operatingrecorded on the statements of income.

(Notes to per unit information)
17th fiscal period

18th fiscal period

September 1, 2012 to February 28, 2013

March 1, 2013 to August 31, 2013

1. Net assets per unit
578,480 yen
2. Net income per unit
16,288 yen
Net income per unit was calculated by dividing net income by the day-weighted
average number of units issued during the fiscal period.
Diluted net income per unit was not presented as there are no diluted units since
no warrants and convertible bonds were outstanding.

1. Net assets per unit
592,119 yen
2. Net income per unit
16,457 yen
Net income per unit was calculated by dividing net income by the day-weighted
average number of units issued during the fiscal period.
Diluted net income per unit was not presented as there are no diluted units since
no warrants and convertible bonds were outstanding.

(Note)Net income per unit was calculated based on the following data:

17th fiscal period

September 1, 2012 to February 28, 2013

Net income (thousands of yen)Amounts not attributable to ordinary unitholders (thousands of yen)
Net income attributable to ordinary investment units (thousands of yen)
Average number of units during the fiscal period (units)

18th fiscal period

March 1, 2013 to August 31, 2013

2,004,301–
2,004,301
123,050

2,271,196–
2,271,196
138,000(Notes to distribution information)(thousands of yen)Account
I. Unappropriated surplus
II. Total dividend [Dividend per unit]
III. Surplus brought forward

Method for calculating dividends

18th fiscal period

17th fiscal period

September 1, 2012 to February 28, 2013

March 1, 2013 to August 31, 2013

2,004,391
2,004,361[16,289 yen]29
The amount of dividends shall be decided inaccordance with the dividend policy stipulated in
Article 38-1-1 of FRC’s Articles of Incorporationand shall exceed 90% of FRC’s distributable profits
as stipulated in Article 67-15 of the Act on Special
Taxation Measures.
Following the above policy, FRC proposed to
distribute 2,004,361 thousand yen, which is almost
the entire amount of unappropriated surplus, asearnings dividends. Moreover, dividend in excessof earnings as stipulated in Article 38-2 of FRC’s
Articles of Incorporation will not be provided.

2,271,226
2,271,204[16,458 yen]22
The amount of dividends shall be decided inaccordance with the dividend policy stipulated in
Article 38-1-1 of FRC’s Articles of Incorporationand shall exceed 90% of FRC’s distributable profits
as stipulated in Article 67-15 of the Act on Special
Taxation Measures.
Following the above policy, FRC proposed to
distribute 2,271,204 thousand yen, which is almost
the entire amount of unappropriated surplus, asearnings dividends. Moreover, dividend in excessof earnings as stipulated in Article 38-2 of FRC’s
Articles of Incorporation will not be provided.

(Notes to significant subsequent events)
No relevant items

FUKUOKA REIT CORPORATION

39

VIII. Notes to Financial Statements(Schedule of property, plant and equipment, and intangible assets)
The following table provides the contract amount of specific transaction by FRC and the status of its fair value as of August 31,
2013.
(thousands of yen)Type of asset

Balance asof March 1,
2013
71,580,539
1,143,589

Buildings in trust
Structures in trust
Machinery and equipment
434,262in trust
Total property, Vehicles and transport–
plant and equipment in trust
equipment Tools and fixtures in trust
1,116,342
Land in trust
90,801,517
Construction in progress in–trust
Subtotal
165,076,250
Leasehold right in trust
1,765,318
Total
Other intangible assets inintangible
27,823trust
assetsSubtotal
1,793,141
Total
166,869,392(Note)

Balance as
Net property
Accumlated Depreciationof August 31,
andDescription
depreciation for the period
2013
equipment(Note)
76,005,077 14,488,742
1,228,467 61,516,335(Note)
1,158,771
380,913
31,688777,857

Increase

Decrease

4,424,538
15,182––

111,830–

546,092

179,676

18,665366,415

747

–

747

7

7

739

22,866
3,197,061––

1,139,208
93,998,578

729,560–

61,622–409,647
93,998,578

192,182–

192,182––

192,182– 173,040,659–
1,765,318

15,778,901–

7,964,408––––
7,964,408

27,823

11,618–
1,793,141– 174,833,800

11,61815,790,520(Note)(Note)(Note)

1,340,452 157,261,757–
1,765,318
2,782

16,2052,782
1,781,523
1,343,234 159,043,280

The main increases are occurred by acquiring new properties for building in trust, structure in trust, machinery and equipment in trust, tools and fixtures in trust, land in trust.

(Notes to status of debt)
Category
LenderThe Bank of Fukuoka
Resona Bank
The Kumamoto Bank
Short-term The Shinwa Bank
debt
The Nishi-Nippon City Bank
Resona Bank
The Bank of Nagasaki
Subtotal
Aozora Bank
Mitsubishi UFJ Trust andBanking Corporation
Sumitomo Mitsui Banking
Corporation
Mizuho Bank (Note 3)
The Norinchukin Bank
Current
maturities The Hiroshima Bankof long-term
The Kitakyushu Bank
debt
The Iyo Bank
The Bank of Saga
The Higo BankThe Shinwa Bank
Development Bank of Japan
Subtotal

Balance asof March 1,
2013(thousands ofyen)(thousands ofyen)

980,000
233,333
93,333
93,333
1,083,333
108,333
108,333
2,700,000
1,000,000

–
–
–
–
–
–
–
–
–

980,000
233,333
93,333
93,333
1,083,333
108,333
108,333
2,700,000
1,000,000

–
–
–
–
–
–
–
–
–

0.520

600,000–

600,000

2,000,000–– 2,600,000– 4,000,000– 1,400,000–
800,000–
500,000–
500,000–
300,000–
200,000– 4,000,000
3,600,000 14,300,000(thousands of yen)

Increase

Decrease

Balance as
Averageof August 31,
interest rate Repayment date
2013
(Note 1) (%)

Use of funds

Description

March 29, 2013

Refinance fund

(Note 2)–
0.764

June 28, 2013

Refinance fund

–

0.909

March 29, 2013

Refinance fund–

2,000,000

1.052

December 30,
2013

Refinance fund

–
–
–
–
–
–
–
–
–
1,600,000

2,600,000
4,000,000
1,400,000
800,000
500,000
500,000
300,000
200,000
4,000,000
16,300,000

1.410

July 31, 2014

Refinance fund

1.710
–

August 29, 2014 Refinance fund(thousands of yen)

FUKUOKA REIT CORPORATION

40

VIII. Notes to Financial Statements

Category
LenderDevelopment Bank of Japan
Development Bank of Japan
Development Bank of Japan
Development Bank of Japan
Sumitomo Mitsui Banking
Corporation
Mizuho Bank (Note 3)
The Norinchukin Bank
The Hiroshima Bank
The Kitakyushu BankThe Iyo Bank
The Bank of Saga
The Higo BankThe Shinwa Bank, Ltd.
Resona Bank
The Bank of Fukuoka
The Bank of Fukuoka
The Nishi-Nippon City Bank
Development Bank of JapanThe Bank of Fukuoka
The Nishi-Nippon City BankThe Dai-Ichi Life Insurance
Company
Shinsei Bank
Long-term Sumitomo Mitsui Trust Bank
debt
The Bank of Fukuoka
The Hiroshima Bank
Oita BankThe Eighteenth BankThe Shinwa Bank
The Kitakyushu Bank
The Kagoshima Bank
Resona Bank
Sumitomo Mitsui Banking
Corporation
Mizuho Bank (Note 3)
Mitsubishi UFJ Trust andBanking Corporation
Sumitomo Mitsui Banking
Corporation
Resona Bank
The Higo Bank
The Bank of Fukuoka
The Nishi-Nippon City Bank
Oita Bank
The Miyazaki BankThe Shinwa BankThe Iyo Bank
The Bank of Saga
The Eighteenth Bank
The Kitakyushu Bank

Balance asof March 1,
2013(thousands ofyen)(thousands ofyen)

2,475,000
4,000,000
4,000,000
4,000,000––––

75,0004,000,000––

2,400,000–
4,000,000
4,000,000(Note 4)2.200
1.710 August 29, 2014
1.950 August 31, 2015
2.170 August 31, 2016

Refinance fund
Refinance fund
Refinance fund
Refinance fund

2,000,000–

800,000

1,200,000

1.157

June 30, 2015

Refinance fund2,600,000
4,000,000
1,400,000
800,000
500,000
500,000
300,000
200,000

–
–
–
–
–
–
–
–

2,600,000
4,000,000
1,400,000
800,000
500,000
500,000
300,000
200,000

–
–
–
–
–
–
–
–

1.410

July 31, 2014

Refinance fund

300,000––

300,000

1,500,000––

1,500,000

2,000,000
2,000,000
2,000,000
2,000,000
2,000,000

–
–
–
–
–

–
–
–
–
–

2,000,000
2,000,000
2,000,000
2,000,000
2,000,000

1,000,000––

1,000,000
1,000,000––

1,500,000(thousands of yen)

Increase

Decrease

Balance as
Averageof August 31,
interest rate Repayment date
2013
(Note 1) (%)

Use of funds(thousands of yen)

September 30,
Refinance fund2014
December 30,
0.702
Refinance fund2016
0.700 February 29, 2016
0.789 February 29, 2016 Acquisition fund0.850 February 29, 2016
1.325

1.305

July 31, 2017

Refinance fund

1,000,000

1.800

July 31, 2018

Refinance fund––

1,000,000
1,000,000

1.208
1.041

Refinance fund
Refinance fund––

1,500,000

0.852

July 29, 2016
July 31, 2015
December 30,
2017

500,000
500,000
500,000
500,000
500,000
100,000
400,000

–
–
–
–
–
–
–

–
–
–
–
–
–
–

500,000
500,000
500,000
500,000
500,000
100,000
400,000

1.168 January 31, 2017
Refinance fund1.218 January 31, 2017

500,000––

500,000

1.338 January 31, 2019 Refinance fund

500,000––

500,000

1.117 February 29, 2016 Refinance fund

2,000,000––

2,000,000

1.170

March 31, 2017 Acquisition fund

500,000––

500,000

1.203

March 31, 2017

Refinance fund

600,000
300,000
1,000,000
1,000,000
700,000
700,000
600,000
500,000
500,000
500,000
500,000

–
–
–
–
–
–
–
–
–
–
–

–
–
–
–
–
–
–
–
–
–
–

600,000
300,000
1,000,000
1,000,000
700,000
700,000
600,000
500,000
500,000
500,000
500,000

1.253
1.203

March 31, 2017
March 31, 2017

Refinance fund
Refinance fund

0.852

June 30, 2017

Refinance fund

FUKUOKA REIT CORPORATION

41

1.182

December 30,
2016

Refinance fund

Refinance fundDescription

VIII. Notes to Financial Statements

Category
LenderBalance asof March 1,
2013(thousands ofyen)(thousands ofyen)

600,000––

600,000

2,000,000––

2,000,000

2,500,000
1,900,000
1,700,000
1,100,000

–
–
–
–

–
–
–
–

2,500,000
1,900,000
1,700,000
1,100,000

1,500,000––

1,500,000

600,000––

600,000–

600,000–

600,000

0.592

March 30, 2018

Refinance fund

– 1,000,000–
68,375,000 1,600,000 15,175,000
74,675,000 15,900,000 19,475,000

1,000,000
54,800,000
71,100,000

0.630

June 30, 2020

Refinance fund(thousands of yen)

Sumitomo Mitsui Trust Bank
Resona Bank, Limited
The Nishi-Nippon City Bank
The Nishi-Nippon City Bank
Mizuho Bank (Note 3)Long-term
Sumitomo Mitsui Trust Bank
debt
Mitsubishi UFJ Trust andBanking Corporation
Aozora Bank
Mitsubishi UFJ Trust andBanking Corporation
Aozora Bank
Subtotal
Total

Increase

Decrease

Balance as
Averageof August 31,
interest rate Repayment date
2013
(Note 1) (%)

Use of funds

Description(thousands of yen)

September 30,
Refinance fund2016
September 29,
1.033
Refinance fund2017
0.777 February 29, 2020 Acquisition fund
0.750 February 28, 2018 Refinance fund
0.750 February 29, 2020 Refinance fund0.800 February 28, 2018 Refinance fund
0.652

0.600 February 28, 2018 Refinance fund

(Note 1) The average interest is a weighted-average figure during the fiscal period and is rounded to the third decimal place. Furthermore, the average interest 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 swap.
(Note 2) Borrowings by committed line of credit.
(Note 3) Mizuho Corporate Bank, Ltd. was renamed to Mizuho Bank, Ltd. as of July 1, 2013.
(Note 4) The debt is subject to repayment of 75 million yen on the final day of every 6 months following the final day of December 2009 as the initial repayment date, with 1,875 million yen to be repaid on
the final repayment date. Furthermore, as the 150 million yen scheduled for repayment within a year is included in Long-term debt for the convenience of comparison, the balances do not match thefigures recorded on the balance sheets as Current maturities of long-term debt and Long-term debt.
(Note 5) The total amout of long-term (i.e. excluding those expected to be repaid within one year) repayable within 5 years of the balance sheets and expected to be repaid by specific year(s) as follows(thousands of yen)
Long-term debt

1 to 2 years
6,650,000

2 to 3 years
11,650,000

3 to 4 years
20,450,000

FUKUOKA REIT CORPORATION

4 to 5 years
10,200,00042