35th Fiscal Period
Report on Performance andManagement Status (Semiannual Report)

Security Code 8968

September 1, 2021 to February 28, 2022

Fukuoka REIT
Corporation

8968

I. Overview of Fukuoka REIT Corporation

I. Overview of Fukuoka REIT Corporation
To Our Unitholders

Status of the Investment Corporation

We would like to express our sincere appreciation to all
unitholders for your continued support of Fukuoka REIT Corporation (FRC).
I am Zenji Koike, appointed as Executive Director of FRC
at its 10th General Meeting of Unitholders.
I would like to express my sincere appreciation for yourcontinued support as we pursue our mission of maximizing
investor interests based on FRC’s management philosophy of“Act Local, Think Global.”
We are pleased to report on the performance results andmanagement status of FRC for the thirty-fifth fiscal period(September 1, 2021 to February 28, 2022).
During the fiscal period under review (the 35th fiscal period), the Japanese economy showed a pickup trend but still
failed to make a full recovery under the impact of the novel
coronavirus (COVID-19) infection. As for the outlook, attention
should be paid to the impact on the Japanese and overseas
economies and the financial and capital markets caused byfluctuations in the world’s geopolitical situation and rising raw
material prices, etc., as well as to the impact of COVID-19.
Under such circumstances, FRC’s portfolio continued toachieve solid performance in the asset types of retail properties
that serve people’s daily needs, office buildings, logistics facilities, and residential properties. On the other hand, the impactof the spread of COVID-19 prevented Canal City Hakata, anurban retail facility, and hotels from showing a full-on recovery.
Against such a backdrop, in the 35th fiscal period, FRC acquired Hakata Chikushi-Dori Center Building on March 1, 2022,
from the perspective of promoting external growth and dispersing risks by further diversifying the portfolio. Going forward,
we will keep aiming to expand the asset size by taking advantage of our local information-gathering ability as a REIT withcomprehensive asset types specializing in regional properties.
Occupancy remained solid throughout the 35th fiscal period, with the average period-end occupancy rate of all properties FRC owns standing at 99.4%. FRC posted operating revenues of 8,658 million yen, operating income of 3,185 million
yen, ordinary income of 2,816 million yen, and profit of 2,814

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

Overview of the Investment Corporation

Zenji Koike
Executive Director
Fukuoka REIT Corporation

million yen for the fiscal period under review. The dividend perunit came to 3,536 yen. The dividend represents an increaseby 36 yen per unit, or up 1.0%, from the dividend forecast at
the time of the announcement of the financial results for the34th fiscal period, thanks to the revenues from our retail properties surpassing the assumed figures, among other factors.
As for internal growth, we intend to appropriately plan andimplement property renovations with an eye on the recovery
phase from the pandemic, on top of accurately taking anti-COVID-19 measures in an effort to secure an environment inwhich our tenants and customers can safely use the properties. In addition, we will promote business operations with afocus on sustainability by implementing a variety of ESG-related measures, which include such energy-saving measures asswitching to LED lighting, coordination with local communities, and provision of information to our unitholders throughissuance of integrated reports, etc.
Looking ahead, as a REIT specializing in regional properties, FRC will keep striving to stably maintain and enhance
dividend per unit by conducting steady asset management aswell as quickly responding to market changes while receiving
support and cooperation from powerful sponsors leading the
Kyushu business world. We are resolved to make the utmost
efforts to secure stable earnings over the medium to long term
and continuously offer stable dividends into the future basedon our management philosophy of “Act Local, Think Global.”
We greatly appreciate your continued support and cooperation.

II.

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

Sponsors

5%

5%

5%

THE BANK OFFUKUOKA, LTD.

THE NISHI-NIPPON CITY BANK, LTD.

Development Bank of Japan Inc.

55%

Director

Fukuoka Realty Co., Ltd.

FUKUOKA JISHO
CO., LTD. (Note)

Overview of Fukuoka REIT Corporation
To Our Unitholders ........................................................................................................ 1
Profile .............................................................................................................................................. 2
Trend of Growth in Asset Size of FRC / Financial Summary ......................................................... 3
Portfolio Overview .......................................................................................................................... 5
Leasing Policy for Higashi Hie Business Center ........................................................................... 7
Initiatives on Sustainability ............................................................................................................. 8
Semiannual Report ............................................................................................................... 9III.
IV. Balance Sheet ....................................................................................................................... 27
V. Statement of Income ......................................................................................................... 29
VI. Statement of Changes in Net Assets ........................................................................ 30
VII. Statement of Cash Distribution .................................................................................... 31
VIII. Cash Flow Statement ........................................................................................................ 32
IX. Notes to Financial Statements ..................................................................................... 33
X. Supplementary Schedules ............................................................................................. 46

FUKUOKA REIT CORPORATION

1

Kyushu Electric Power Co., Inc.

(Asset Manager)

5%

5%

5%

5%

SAIBU GAS HOLDINGS CO., LTD.

Kyudenko Corporation

Nishi-Nippon Railroad Co., Ltd.

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

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

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

Portfolio
RetailIndependent Auditor's Report ...................................................................................... 25

10%

Outsidedirector

Investment type (based on acquisition price)

CONTENTSI.

Profile54.2%

Investment area (based on acquisition price)

Office buildings Others

31.5%

Total leasable floor space

14.3%

572,288.25 m2

Fukuoka metropolitan area

76.6%

Occupancy rate at end of period

*Figures are based on properties owned as of February 28, 2022.

FUKUOKA REIT CORPORATION

2

Other
Kyushu areas

23.4%

99.4%

I. Overview of Fukuoka REIT Corporation

I. Overview of Fukuoka REIT Corporation

Trend of Growth in Asset Size of FRC
FRC More than Doubled Asset Size and Diversified Investment Types Since
The asset size stood at 202 billion yen (on an acquisition price basis) in the 35th fiscal period. FRC aims to achieve 250 billion yen as
Retail (left axis)(mm yen)

Office buildings (left axis)

Residence (left axis)

Logistics (left axis)

Listing
the next target, while working to dissipate risks by diversifying the investment types.

Hotels (left axis)(properties)

Number of investment properties (right axis)

2.1%
40

200,000

7.8%

Acquired from sponsor

16

150,000

32

4.1%

Sponsor

64.7%

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

Other thansponsor

35.3%
71,329million yen

130,690

As ofmillion yen
February 28, 2022

202,01931

million yen

23
100,000

19

15

33

32

30

27

14

31

32

16

15

16

16

16

17

24

23

27

28

27

25

29

25

26

29

29

33.0%

26

20

20

17

11

11

53.0%
10

50,000

7

8

5

0

5th

10th

15th

(Feb. 2007)(Aug. 2009)(Feb. 2012) inancial Highlights for 35th Fiscal Period and Business Forecasts forF
36th and 37th Fiscal Periods
35th fiscal period

36th fiscal period

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

ActualForecast

Forecast

Operating revenues

mm yen

8,658

8,807

8,749

Operating expenses

mm yen

5,472

5,640

5,589

Operating income

mm yen

3,185

3,167

3,159

Ordinary income

mm yen

2,816

2,787

2,787

Profitmm yen

2,814

2,786

2,786

Dividend per unityen (1)

3,536

–

–

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

25th

30th

35th

(Aug. 2014)(Feb. 2017)(Aug. 2019)(Feb. 2022)

Mar. 1,2022

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

Financial Summary

Category20thyen (2)

3,500

3,500

3,500

yen (1)-(2)

36

–

–

units

796,000

796,000

796,000

Dividend Performance
Showing a recovery trend from the impact of COVID-19 in the 35th fiscal period, FRC will keep its endeavors to maintain andstabilize dividends.
35th fiscal period end

February 28, 2022 (semiannual periods ending every February and August) 35th fiscal period days 181 days

35th fiscal period dividend 3,536 yen per unit

Dividend yield

4.5% {(Dividend / Days × 365) / Unit price (as of February 28, 2022)}

(yen)

4,000

3,468

3,475

3,693
3,324

3,398

3,278

3,000

2,000

1,000

0

5th

Feb.
[2007
]

10th

Aug.
[2009
]

15th

Feb.
[2012
]

20th

25th

Aug.
[2014
]

Feb.
[2017
]

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

33,536 3,500 3,500

FUKUOKA REIT CORPORATION

4

30th

Aug.
[2019
]

35th 36th 37th

Feb. Aug. Feb.
[2022][2022][2023](Forecast) (Forecast)I. Overview of Fukuoka REIT Corporation

I. Overview of Fukuoka REIT Corporation
Purchase of earthquake
insurance

Portfolio Overview
1

Retail2

3

Retail5

RetailOthers26 (residence)

Others27 (residence)

28 Others(hotel)29 Others(hotel)Others30 (logistics)

Park Place Oita

SunLive City Kokura

Konoha Mall Hashimoto

D-Wing Tower

Granfore Yakuin Minami

Hotel FORZA Oita

Tissage Hotel Naha

Tosu Logistics Center

One of the largest entertainment-type retail facilities inJapan and comprising United
Cinemas and others

One of the largest entertainment-type retail facilities inJapan and comprising OPA,
MUJI Canal City Hakata andothers

A leading retail facility in the Oita
area, providing “park entertainment” for families

One of the largest malls in
Kitakyushu and anchored by a
SunLive supermarket chosen by
local consumers

A community-based retail facility
with SunLive as its anchor
tenant and directly connected to
Hashimoto Station via apedestrian bridge

A large, high-rise (20-story)
rental condominium, approximately a seven-minute walk from
Tenjin subway station

A rental condominium in theYakuin/Hirao area that is popularamong younger generations andhas plentiful bus networks

A business hotel located walking
distance from Oita Station andspecialized for lodging to meetbusiness needs

A hotel in Naha City, Okinawa
Prefecture located a 10-minutecar ride from Naha Airport.
Guestrooms are of sufficient sizeand quality to take in leisuredemand.

A logistics facility located in theGreen Logistics Park Tosu,
operating around the clock andwith three temperature zones

6

7

8

9

10 Retail

Others31 (logistics)

Others32 (logistics)

Others33 (logistics)

Square Mall
Kagoshima Usuki

RetailKumamoto
Intercommunity SC

RetailHanahata SC

RetailKurume Higashi
Kushiwara SC

K’s Denki Kagoshima

LOGICITY
Minato Kashii

LOGICITY Hisayama

LOGICITY Wakamiya

A logistics facility among thelargest in the Fukuoka area, witha location featuring traffic
convenience and concentrationof such facilities

Approximately 5 km from the
Fukuoka Interchange featuring
traffic convenience, and has
good general-purpose capabilities

A logistics facility located in aleading industrial city of Fukuoka
prefecture and can conduct
operations 24 hours a day as
well as frequent deliveries

A retail facility in Kagoshima,
designed by John Jerde who
designed Canal City Hakata andRoppongi Hills

Located along a major arterial
road and comprising Sports
Depo, Golf 5 and Starbucks
coffeeLocated in a new residential area
and comprising BON REPAS
supermarket and Matsumoto
Kiyoshi drug store

Located on a corner of aheavy-traffic intersection andcomprising Sports Depo andGolf 5

Having a large floor area andtenanted by an electric
appliance store widely attracting
customers from nearby cities

11 Retail12 Office Building

13 Office Building

14 Office Building

15 Office Building

Portfolio Map

16 Office Building

Gofukumachi BusinessCenterSanix Hakata Building

Taihaku Street BusinessCenterAn office building expected toexert synergy with Canal City
Hakata, with showroom
functions

An office building facing majorarterial roads Meiji-dori Avenue
and Taihaku-dori Street, anddirectly connected to Gofukumachi Station on the city subway

A highly-convenient, station-front office building that is a
two-minute walk from Hakata
StationGood location along Taihaku-dori Street, a two-minute
walk from Gion subway stationand ten-minute walk from
Hakata Station

17 Office Building

18 Office Building

19 Office Building30
9Nagasaki

Island City,ay es w L in
resCit ypx daE no k sl aku 6 IF u u teRo

Fukuoka
Oita

28
3

25

7
Kumamoto
Miyazaki3

20 Office Building

3

KyushuArea

29

An office building facing Tenjin
Nishi-dori Street wherecommercial facilities areconcentrated

21 Office Building

22 Office Building

A highly convenient officebuilding located in the Tenjin
area that features Kyushu’s
largest integration of urban
functions

Others23 (residence)

Higashi Hie BusinessCenter II

Higashi Hie BusinessCenter III

Directly connected to Higashi Hie
subway station, a two-minuteride to Hakata Station and highly
recognized for its excellent
business continuity plan (BCP)

An office building with highscarcity value and goodaccessibility, completed in
March 2020 and located close to
Higashi Hie subway station exit

Others24 (residence)

Fukuoka Expressway,
Route 1 (Loop Line)11

SubwayKuko LineLine
JR Sasaguri

13

FUKUOKA
PayPay DOME

18

23
26 21
17

202

25 (residence)

27
SubwayNanakumaLine

202

Amex Akasakamon
Tower

City House Keyaki Dori

Aqualia Chihaya

Located along Meiji-dori Avenue, along-standing business district in the
Tenjin area, as well as near Tenjin
Nishi-Dori Street where commercial
facilities are concentrated

An approximate 8 minute-walkfrom JR Hakata Station in anarea where hotels and public
offices are concentrated*Acquired in 36th fiscal period

A tower-type rental condominium near downtown Fukuoka,
with traffic convenience andenvironment that matches awide range of generations

A high-quality rental condominium in a popular residential areaof Fukuoka, featuring traffic andliving convenience

A rental condominium comprised of units mainly for singles
and small families to match thelocal characteristics

202

5

0

1km

Fukuoka
E

xpr
ess
wa

y R oute

op Line)5 (Lo5*As of March 1, 2022.

FUKUOKA REIT CORPORATION

Fukuoka metropolitan area
Other Kyushu areas(including Okinawa and Yamaguchi prefectures)

0 - 10% Others

Investment type

(Hotels, Residence, Logistics and Other facilities)

8
FUKUOKA REIT CORPORATION

Investment area

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

385
202

Investment Policy
60 - 90%
10 - 30%

ine
aL
im
sh
go
Ka

Hakata Chikushi-Dori
Center BuildingNishOmitetut su
a Te
Lin nje in263

Fukuoka Airport

JR

Tenjin Nishi-Dori BusinessCenter (Land with leasehold interest)

Tenjin24

19
14 2016
3
22

Hakata1
12
2

Ohori Park

Others

15

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

Directly connected to Higashi
Hie subway station, a two-minute ride to Hakata Station andthree-minute ride to Fukuoka
AirportTenjin North Front
Building

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

Hakata Bay

Okinawa

Tenjin Nishi-Dori Center
Building

Fukuoka
Metropolitan
Area

Fukuoka IC

Kagoshima

6
10

Higashi Hie BusinessCentere
Lin(Marina Side Building)
Located east of Marinoa City
Fukuoka and has stableattractiveness through synergy
with the Outlet building

Canal City BusinessCenter Building

ssway
Kyushu Expre

Marinoa City Fukuoka

33 4

ii
sh
Ka
JR

Saga

32

31

Fukuoka
Metropolitan Area

Sh
in
ka
ns
en

RetailCanal City Hakata·B

4

RetailSanyoCanal City Hakata

Retail

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

6

I. Overview of Fukuoka REIT Corporation

I. Overview of Fukuoka REIT Corporation

Leasing Policy for Higashi Hie Business Center

Initiatives on Sustainability

Reduce Rent Gap by Improving Rent Unit Price

Materially Significant Issues

Overview of Higashi Hie Business Center
Acquisition price

FRC believes that initiatives on sustainability will continue to be a major factor affecting decision making in real estate investment.
In April 2022, FRC set up key performance indicators (KPIs) and targets on materiality. Progress in achieving the targets will be
disclosed going forward.

5,900 mm yen (Investment ratio: 2.9%)

Built timing

February 2009

Tenants

27

Materiality significant issues

In view of the strong office market of the Fukuoka metropolitan area, press ahead with leasing activities to secure succeeding
tenants while minimizing the vacant period.

Overview of the change of tenants (cancellation of leasing)
4,785.45 m2 (1,447 tsubo) (Note 1)

Ratio of area of lease cancellation tototal leasable area of the property

35.15%

Ratio of area of lease cancellation tototal leasable area of FRC’s portfolio

0.84%

Monthly rent

19 mm yen

Market rent
unit price

Positive
Rent Gap

Current rent
unit price

15,000 16,000 yen

about

12,500 13,000 yen(Note 2)

Scheduled date of cancellation

Reduction of environmental load

13 %September 30, 2022

Governance(Note 1) The figure in tsubo is obtained by converting the square-meter figure to tsubo, rounded down to the nearest whole number(Note 2) “Market rent unit price” indicates the assumed newly closed rent unit price (with common charges) per tsubo assessed by CBRE as of February 2022, presented in a range.

• Coordinate with property management companies and building manage- • (by 2030)
35% reduction in CO2 emissions
ment companies on promotion of control and reduction of energy
consumption, greenhouse gas emissions, water consumption, and waste(compared with 2019, basic unit)
output
75% waste recycling rate• (by 2030)
85% Green Building Certification acquisition
rate or higher

Creation of pleasant workplaces(Asset Manager)• Improve quality of operations by enhancing and expanding employee
education systems and promoting acquisition of qualifications• Continue to improve office environments and work on providing pleasantworking environments• Training per employee (number of times)• Improve office environment (number of cases)

Creation of pleasant workplaces(Tenants)• Promote improvement of employee satisfaction and work toward
increasing the job satisfaction of tenant employees• Conduct regular tenant satisfaction surveys(all properties)

Contribution to boosting attractiveness and vitalization of
Fukuoka and Kyushu• Enhance dissemination of information regarding the strengths andcharms of Fukuoka and Kyushu• Support research and studies on the local economy and industries andpromote attractive urban development in collaboration with local
business circles• Join and participate in activities of local
economic organizations• Host local community events (number of times)

Involvement in local community• Join and participate in area management• Deepen dialogue and collaboration with the local community throughorganizations
participation in community activities and various initiatives using
properties under our management to grow and develop together with the • Continued participation in activities that
contribute to the community (number of times)
local community

Information disclosure anddialogue with stakeholders• Disclose financial and non-financial information to stakeholders in an
appropriate and timely manner• Build relationships of trust through proactive dialogue with stakeholders
and reflect stakeholder feedback in our management strategy• Dialogue with investors (number of times)• ESG training for employees (number of times)

Compliance / Risk Management• Ensure thorough compliance, including compliance with laws andordinances and elimination of conflict of interest with interested parties,
and develop and operate an appropriate internal risk management
system to maintain and improve corporate value• Compliance training (number of times)

Environment

Governance• Raw garbage recycling• Publication of integrated report(sole J-REIT with such publication)

Raw garbage from restaurants is outsourced toa recycling company and converted into animal
feed. (Canal City Hakata, Park Place Oita, etc.)ku

Subway Kuko Line
Higashi Hie Sta.

es s
x pr
n E ner ba L ia U K a nj oJRHakataminami
Line

Higashi Hie Business Center III

bw

ay
K

Society• Tenant satisfaction surveys

Higashi Hie Business Center II
Su

Hakata Sta.

ywa

JR Kagoshima Lineok

Higashi Hie Business Center
Hakataeki Higashi

Published third issue in December 2021
Expanded information disclosure fromprevious issue (Energy data coverage
expansion, etc.)

Higashi Hie Business Center II

FuArea map

KPIs and targets• Carry out performance and function evaluation of properties on a regular
Maintenance and enhancement ofbasis and ameliorate any deterioration in performance, etc.
environmental and construction• Maintain and improve competitiveness by acquiring green building
performancecertifications and through visual representation of building performance

Our Target

Society

Area of lease cancellation

Environment

Leasing Policy

Policies and targets• Employee satisfaction surveysukoL

Nakahie Parkin e

Higashi Hie Sta.

Higashi Hie Business Center

Higashi Hie Business Center III

FUKUOKA REIT CORPORATION

7

Conducted satisfaction surveys of tenants of all properties and employeesof the asset management company by outsourcing to an external company

FUKUOKA REIT CORPORATION

8

II. Semiannual Report

II. Semiannual Report

Overview of Asset Management

Overview of Asset Management

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

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

Operating revenues

mm yen[Leasing business revenues]

mm yen34th fiscal period

35th fiscal period(September 1, 2020 toFebruary 28, 2021)(March 1, 2021 toAugust 31, 2021)(September 1, 2021 to
February 28, 2022)

mm yen8,904[8,904]
5,842[5,180]
3,061
2,677
2,675
199,559[0.3]
82,400101,614[0.1]
98,938

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

8,658[8,658]5,472[4,810]
3,185
2,816
2,814
198,745[(0.5)]
82,400101,753[(0.0)]
98,938

units

796,000

796,000

796,000

796,000

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

mm yen127,5442,587
3,250[3,250][–]127,656
2,675
3,361[3,361][–]

127,833
2,817
3,539[3,539][–]127,8312,814
3,536[3,536][–]mm yenmm yenmm yenmm yen(a)

mm yen(b)

mm yen[Change from previous period]%(c)

mm yen(d)

mm yen[Change from previous period]%

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

33rd fiscal period(March 1, 2020 toAugust 31, 2020)

8,518[8,518]5,551[4,897]
2,966
2,587
2,586
199,004[2.2]
82,400101,525[(0.3)]
98,938[Expenses related to leasing business]

Interest-bearing debt
Net assets

32nd fiscal period

9,162[9,162]
5,888[5,226]
3,273
2,900
2,899
194,795[(0.2)]
77,500101,837[(0.0)]
98,938Operating expenses
Operating income
Ordinary income
ProfitTotal assets

31st fiscal period(September 1, 2019 toFebruary 29, 2020)(e)[Earnings dividend per unit]

yen[Dividend in excess of earnings per unit]

yen

127,937
2,899
3,642[3,642][–](Note 3)%

1.5 [3.0]

1.3 [2.6]

1.3 [2.7]

1.4 [2.8]

1.4 [2.9](Note 3)%

2.8 [5.7]

2.5 [5.0]

2.6 [5.3]

2.8 [5.5]

2.8 [5.6](d)/(b)

%

52.3

51.0

50.9

50.9

51.2

%

Ratio of ordinary income to total
assetsReturn on net assets
Ratio of net assets to total
assets(f)/(e)(Note 3)

%

[0.1]
100.0

[(1.3)]
100.0[(0.1)]
100.0

[0.0]
100.0

[0.3]
100.0

(c)/(b)

%

39.8

41.4

41.3

41.2

41.5

properties

29

31

31

32

32

m2

580,662.77

591,021.51

608,557.70

572,215.71

572,288.25

%

99.7

99.7

99.5

99.5

99.4

mm yen

1,660

1,686

1,623

1,552

1,486

mm yen

465
5,596
182
4,559
5,728

790
5,307
184
4,273
5,368

687
5,347
181
4,299
5,401

445
5,336
184
4,265
5,358

600
5,334
181
4,301
5,403

[Change from previous period]

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

Occupancy rate
(at end of period)

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

(Note 3)mm yendays(g)(Note 3) mm yen(g)/(e)yen(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 to total assets
Return on net assets
Payout ratio
Leasing NOIFFO (Funds from Operation)

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

FUKUOKA REIT CORPORATION

9

Based on the “Act on Investment Trusts and Investment Corporations” (Act No. 198 in 1951 including later revisions, hereinafter
the “Investment Trusts Act”), FRC was established on July 2, 2004 as Japan’s first real estate investment trust specializing inregional properties, investing in real estate throughout Kyushu (including Okinawa Prefecture), with a central focus on Fukuoka
City, and Yamaguchi Prefecture (hereinafter the “Fukuoka and Kyushu areas”) by using its strength of expertise in regional characteristics, a feature in the real estate industry. FRC started asset management activities on November 9, 2004 after acquisitionof four properties comprising retail properties and an office building, and listed on the Tokyo Stock Exchange, Inc. and the Fukuoka Stock Exchange on June 21, 2005 as the nation’s (code number: 8968).
As of the end of the 35th fiscal period (February 28, 2022), FRC manages a total of 32 properties comprising 11 Retail, 10
Office buildings (including land with leasehold interest for an office building) and 11 Others.

(2) Investment environment and portfolio performance
During the fiscal period under review (the 35th fiscal period), the Japanese economy continued to show a pickup trend, although
weakness was seen in some areas amid a severe situation still persisting under the impact of the novel coronavirus (COVID-19)
infection. As for the outlook, with social and economic activities maintained, the economy is expected to pick up due in part tothe effects of various political measures and improvements in overseas economies. Attention should be paid, however, to theimpact of restrictions on the supply side, downside risks due to the trends of raw material prices and changes in the financial
and capital markets, etc., as well as to the impact of the spread of the infection.
In the Fukuoka and Kyushu area, the core investment target area for FRC, the economy was in a severe situation due to theimpact of COVID-19, and supply-and-demand conditions for labor and compensation of employees were both on a weak note.
As a whole, however, the economy is on a pick-up trend centering on exports and production. As we foresee, we must be waryof the restrictions under the influence of COVID-19, and the impact of rising raw material prices, etc. on the economic conditions.
As for land price trends, the national average price in combined average for residential and commercial land took an upward
turn for the first time in two years, according to the 2022 Land Market Value Publication. In Fukuoka City, the central area of
FRC’s investment targets, land prices also remained solid, rising at a higher pace. By land type, commercial land price rose forthe first time in two years on national average and climbed by 9.4% year-on-year in Fukuoka City, showing a larger rate of increase to become the prefectural government city with the highest rate of increase in Japan for two consecutive years. As forresidential land price, it turned to an increase for the first time in two years on national average, bolstered by such factors as
improvement in business sentiment, ongoing low-interest environment and political measures to support housing purchase,
while rising 6.1% year-on-year in Fukuoka City to show a higher rate of increase.
Under such circumstances, FRC’s portfolio achieved solid performance in the asset types of office buildings, logistic facilities,
residential properties and retail properties rooted in the spheres of people’s daily lives. On the other hand, the impact of
COVID-19 continued to linger at Canal City Hakata, a city-center retail property, while hotels remained unable to recover as
tourism demand, etc. did not return strongly. As for Hakata Chikushi-Dori Center Building, for which FRC concluded a purchaseagreement in the previous fiscal period, the acquisition completed on March 1, 2022, the beginning of the 36th fiscal period.
When analyzing FRC’s portfolio (on an acquisition price basis) as of the end of the 35th fiscal period by investment target area,
the investment ratio in the Fukuoka urban area accounted for 76.6%; when analyzing by property type, Retail, Office buildings,
and Others accounted for 54.2%, 31.5% and 14.3%, respectively.
On top of these efforts, Fukuoka Realty Co., Ltd. to which FRC entrusts its asset management (the Asset Manager) has established the Sustainability Policy and Regulations Concerning Sustainability Management to promote sustainability throughenvironmental, social and governance (ESG) considerations. By setting up the Sustainability Promotion Committee, which comprises President/CEO, full-time directors and general managers of Real Estate Management Department, Investment Department, Finance Department, Planning Department and Compliance Department, the Asset Manager investigates specific targets
and measures and supervises the progress in implementation of the measures with regard to the internal system, cooperation
with related parties outside the company and information disclosure policy, etc. On the implementation side, the sustainability
officer (general manager of the Planning Department), who is the person responsible for the practical aspects concerning thetargets set at the Sustainability Promotion Committee, concurrently serves as general manager of Sustainability Promotion Office, which is engaged in continuous operations related to the GRESB Real Estate Assessment (with Green Star rating), thePrinciples for Responsible Investment (PRI) and the Principles for Financial Action for the 21st Century (PFA21) and other initiatives.
FUKUOKA REIT CORPORATION

10

II. Semiannual Report

II. Semiannual Report

Overview of Asset Management

Overview of Asset Management(3) Summary of fundraising[Changes in market price of investment certificates]

The balance of FRC's interest-bearing debt outstanding (including investment corporation bonds) at the end of the 35th fiscal
period totaled 82,400 million yen, with the loan-to-value ratio (ratio of interest-bearing debt (including investment corporation
bonds) to total assets) at 41.5% and the ratio of fixed-interest rate debt (ratio of interest-bearing debt with fixed interest rates(including investment corporation bonds) to total interest-bearing debt) at 94.1% as of the same date. In addition, with regard to
the commitment line agreement (credit limit: 7,000 million yen) with The Nishi-Nippon City Bank, Ltd. serving as the agent, FRC
extended the commitment period by a year, lengthening the remaining term of commitment to three years.
FRC will continue its endeavors to reduce refinancing risks by dispersing debt repayment dates and extending debt duration.
At the same time, FRC will work to mitigate risks of rising interest rates by shifting to fixed-interest rate borrowings and throughother measures.

The highest and lowest (closing price) market prices on the Real Estate Investment Trust Section of the Tokyo Stock Exchange,
Inc., on which FRC’s investment certificates are listed, in each fiscal period are as follows:Moreover, the credit ratings assigned to FRC as of the end of the 35th fiscal period are as follows:
Credit Rating Agency
Rating and Investment Information, Inc. (R&I)
Japan Credit Rating Agency, Ltd. (JCR)

Rating Type
Issuer Rating
Long-term Issuer Rating

RatingA+
AA−

Rating Outlook
StableStable(4) Summary of performance and dividend

Fiscal period
HighestLowest

Date

Item

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

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

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

ProfitUnappropriated surplus
Undistributed earnings
Total dividends[Dividend per unit]

Earnings dividends[Earnings dividend per unit][Contribution refund per unit]

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

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

Balance
125
41,52547,46949,16760,264
69,17779,441
79,441
91,142
98,938Remarks(Note 1)
(Note 2)
(Note 3)(Note 4)(Note 5)(Note 6)(Note 7)34th fiscal period

35th fiscal period(September 1, 2020 toFebruary 28, 2021)(March 1, 2021 toAugust 31, 2021)(September 1, 2021 to
February 28, 2022)

169,900 yen
72,500 yen

179,900 yen
126,300 yen

11176,000 yen
153,400 yen(Of the contribution refund per unit,
distribution per unit of the reserve
for temporary difference
adjustments)

Of the contribution refund,
distribution through the
reduction in unitholders’capital for tax purposes(Of the contribution refund per unit,
distribution per unit through the
reduction in unitholders’ capital fortax purposes)

31st fiscal period

32nd fiscal period

33rd fiscal period

34th fiscal period

35th fiscal period(September 1, 2019 toFebruary 29, 2020)(March 1, 2020 toAugust 31, 2020)(September 1, 2020 toFebruary 28, 2021)(March 1, 2021 toAugust 31, 2021)(September 1, 2021 to
February 28, 2022)

2,899,112
2,899,164
132
2,899,032[3,642 yen]
2,899,032[3,642 yen]–[–]

2,586,899
2,587,031
31
2,587,000[3,250 yen]
2,587,000[3,250 yen]–[–]

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

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

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

–
[–]

–
[–]

–
[–]

–
[–]

–
[–]

–
[–]

–
[–]

–
[–]

–
[–]

–
[–]

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

FUKUOKA REIT CORPORATION

191,700 yen
163,100 yen

With respect to the dividend for the 35th fiscal period, FRC determined to distribute the whole unappropriated surplus (except
for the fraction amount, which is the dividend per unit of less than 1 yen) to be eligible for special tax measures for an investment
corporation (as stipulated in Article 67-15-1 of the Special Taxation Measures Act) that allow FRC to deduct the maximum
amount of earnings dividend from its taxable income. Accordingly, dividend per unit for the fiscal period was 3,536 yen.
(thousands of yen)Of the contribution refund,
distribution of the reserve
for temporary difference
adjustments

Changes in unitholders’ capital from the incorporation of FRC to the end of the 35th fiscal period are as follows:

33rd fiscal period(March 1, 2020 toAugust 31, 2020)

4. Results of dividend, etc.

Contribution refund

3. Change in the number of investment units issued

32nd fiscal period

191,700 yen
167,900 yen

Fiscal period

As a result of these management efforts, operating revenues totaled 8,658 million yen and operating income after excluding
operating expenses such as expenses related to leasing business and asset management fees totaled 3,185 million yen. Ordinary income was 2,816 million yen and profit amounted to 2,814 million yen. Management decided to make a dividend of 3,536
yen per unit to meet the requirements of special tax measures for an investment corporation (as stipulated in Article 67-15 of the
Act on Special Measures Concerning Taxation of Japan [Act No. 26 in 1957 including later revisions]). Under this act, an investment corporation is allowed to deduct the maximum amount of dividends paid to investors from its taxable income.

31st fiscal period(September 1, 2019 toFebruary 29, 2020)

FUKUOKA REIT CORPORATION

12

II. Semiannual Report

II. Semiannual Report

Overview of the Investment Corporation

Overview of Asset Management
5. Future portfolio management policy and vital issues

3. Matters related to directors

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

(1) The names of FRC’s directors, etc. and their fees for the 35th fiscal period are as
follows:

6. Significant events that have occurred after the end of the 35th fiscal
periodNo relevant items.

Title

Supervisory Directors
Independent Auditor

Etsuo Matsuyuki
Takashi Tanabe
Yasuo Kawasho
PricewaterhouseCoopers
Aarata LLC–
Representative attorney at law at Tanabe Law Office
Representative Partner, Kawasho Authorize Accountant Office
–

6,000
3,600
8,500

(Note 1) Etsuo Matsuyuki, the Executive Director, possesses four investment units of FRC under his own name. The Supervisory Directors do not possess investment units of FRC under their own name or underanother person’s name. Although there are cases where the Supervisory Directors may be directors of companies other than those stated above, none of the companies or those stated above havevested interest in FRC.
(Note 2) The fees for the Executive Director and Supervisory Directors are the amounts paid to them in the 35th fiscal period, and the fee to the Independent Auditor is the amount payable to it (estimate) foraudits pertaining to the 35th fiscal period.

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

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

1. Summary of unitholders’ capital
31st fiscal period

32nd fiscal period

33rd fiscal period

34th fiscal period

35th fiscal period

as of February 29, 2020

as of August 31, 2020

as of February 28, 2021

as of August 31, 2021

as of February 28, 2022

10,000,000 units

10,000,000 units

10,000,000 units

10,000,000 units

10,000,000 units

796,000 units

796,000 units

796,000 units

796,000 units

796,000 units

10,473

14,46813,817

13,306

13,641

Executive Director andSupervisory Directors

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

5. Names of asset management company, asset custodian and generaladministrators as of the end of the 35th fiscal period
The following table sets forth the asset management company, asset custodian and general administrators of FRC as of February 28, 2022.

2. Matters related to investment units
The following table sets forth the major unitholders of FRC as of February 28, 2022.
Name

Total fee for each title for the
35th fiscal period(thousands of yen) (Note 2)

Executive Director

Scope of the insured

Total number of authorized
investment units
Total number of investment
units outstanding
Number of unitholders

Major concurrent assignments

4. Matters concerning directors and officers liability insurance agreement

Overview of the Investment Corporation

Fiscal period

Name of directors, etc.

Investment units held (units)

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

178,739
101,582
73,13633,29019,922
14,76012,82910,2279,130
8,860
462,475

Percentage of total number ofinvestment units outstanding (%) (Note)
22.45
12.76
9.18
4.18
2.50
1.85
1.61
1.28
1.14
1.11
58.09

Category of entrustment
Asset Management Company
Asset Custodian
General Administrator (accounting matters, etc.)
General Administrator (administration of unitholders’ list)
General Administrator (administration of investment corporation bonds registry)
General Administrator (administration of investment corporation bonds registry)Name
Fukuoka Realty Co., Ltd.
Mitsubishi UFJ Trust and Banking Corporation
Mitsubishi UFJ Trust and Banking Corporation
Sumitomo Mitsui Trust Bank, Limited
Sumitomo Mitsui Banking Corporation
Mizuho Bank, Ltd.

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

FUKUOKA REIT CORPORATION13FUKUOKA REIT CORPORATION

14

II. Semiannual Report

II. Semiannual Report

Status of FRC’s Assets under Management

Status of FRC’s Assets under Management

1. FRC’s asset structure
Type of asset

Use

3. Details of real estate properties in the portfolio

Area(Note 1)

Real estate trust
beneficiary interest

as of February 28, 2022

The following table provides details of the real estate properties owned by FRC as of February 28, 2022.

Percentage of
total assets

Total value of
properties owned

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

–
–
–
–
–
2,153
66,68036,612
55,418–19,8985,324
13,716

–
–
–
–
–
1.1
33.4
18.3
27.7
–
10.0
2.7
6.9

–
–
–
–
–
2,143
66,351
36,59855,054–19,7595,269
13,567

–
–
–
–
–
1.1
33.4
18.4
27.7
–
9.9
2.7
6.8

199,804[186,568]

100.0[93.4]

198,745[185,678]

100.0[93.4]

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

35th fiscal period

as of August 31, 2021

Total value of
properties owned

RetailReal estate

34th fiscal period(Note 1) “Fukuoka metropolitan area” refers to cities, towns and villages where 10% or more of the population commute to Fukuoka City for school and work, according to the 2020 census, which states “thenumber of workers and students aged 15 years or older (students including those aged 14 years or younger: particular reference) commuting between their homes and places of work or school” conducted by Fukuoka City and the Statistics Bureau of the Ministry of Internal Affairs and Communications. “Other Kyushu areas” refers to all other parts of Kyushu (excluding the Fukuoka metropolitanarea).
(Note 2) “Total value of properties owned” is based on the value on the balance sheet (the value of real estate and real estate trust beneficiary interest is the book value after depreciation).
(Note 3) Concerning the “Percentage of total assets,” the figures are rounded off to one decimal place. The total of individual percentages in the above table may not equal 100%.
(Note 4) Figures in square brackets for “Total amount of assets” refer to the value and percentage of real estate owned in effect to the total amount of assets.

Real estate property namePark Place Oita
SunLive City Kokura
Konoha Mall Hashimoto
Square Mall Kagoshima Usuki
Kumamoto Intercommunity SC
Hanahata SC
Kurume Higashi Kushiwara SC
K’s Denki Kagoshima
Marinoa City Fukuoka(Marina Side Building)Real estate property name (Note 1)

Sanix Hakata Building

Canal City Hakata
Canal City Hakata·B
Park Place Oita
Canal City Business Center Building
Konoha Mall Hashimoto
Gofukumachi Business Center
Tenjin Nishi-Dori Business Center(Land with leasehold interest)
LOGICITY Minato Kashii
SunLive City Kokura
Taihaku Street Business Center
Total

Tenjin Nishi-Dori Center Building
Tenjin North Front Building

29,324
20,84919,955
12,7779,848
8,711

46,585.57
31,141.44
121,212.26
23,030.30
22,191.17
19,905.34

45,573.70
30,478.72
120,639.37
23,030.30
21,526.54
19,905.34

97.8
97.9
99.5
100.0
97.0
100.0

Percentage of total
leasing businessrevenues (%) (Note 3)
11.4
10.9
13.8
7.5
9.4
6.6

7,754

1,343.51

1,343.51

100.0

1.8

Office buildings

D-Wing Tower

7,715
5,591
5,555
128,083

43,233.72
61,450.22
14,677.35
384,770.88

43,233.72
61,450.22
14,554.76
381,736.18

100.0
100.0
99.2
99.2

Undisclosed (Note 5)
3.0
3.7
–

OthersRetailOffice buildings–

Granfore Yakuin Minami

Total leasable
floor space (m2)Book value(mm of yen)

(Note 4)

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

Main use

Retail subtotal:

Canal City Business Center Building

Higashi Hie Business Center

The following is an overview of the major assets (top ten properties on a book value basis) owned by FRC as of February 28,
2022.

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, Kami Kuzuhara,
Kokura Minami Ward, Kitakyushu City
27-2, 2-chome, Hashimoto, Nishi
Ward, Fukuoka City
2-18, 2-chome, Usuki, Kagoshima
City, Kagoshima
1-5, 1-chome, Kozono, Higashi Ward,
Kumamoto City
9-12, 4-chome, Hanahata, Minami
Ward, Fukuoka City
370-3 Higashi Kushiwara, Kurume
City, Fukuoka
4-12, Tokai-cho, Kagoshima City,
Kagoshima
12-30, 2-chome, Odo, Nishi Ward,
Fukuoka City

Canal City Hakata·B

Taihaku Street Business Center

2. Major assets owned by FRC

Location

Canal City Hakata

Gofukumachi Business Center

Higashi Hie Business Center II
Higashi Hie Business Center III

RetailRetailRetailOffice buildings
RetailOffice buildings

Tenjin Nishi-Dori Business Center(Land with leasehold interest)
Amex Akasakamon Tower
City House Keyaki Dori
Aqualia Chihaya

Hotel FORZA Oita
Tissage Hotel Naha
Tosu Logistics Center
LOGICITY Minato Kashii
LOGICITY Hisayama
LOGICITY Wakamiya

Form ofownership

2-25, 1-chome, Sumiyoshi, Hakata
Ward, Fukuoka City
10-10, Kami Gofukumachi, Hakata
Ward, Fukuoka City
1-23, 2-chome, Hakataeki Higashi,
Hakata Ward, Fukuoka City
3-21 Gokushomachi, Hakata Ward,
Fukuoka City
1-2, 3-chome, Higashi Hie, Hakata
Ward, Fukuoka City
5-28, 2-chome, Tenjin, Chuo Ward,
Fukuoka City
4-20, 4-chome, Tenjin, Chuo Ward,
Fukuoka City
5-13, 1-chome, Higashi Hie, Hakata
Ward, Fukuoka City45, 4-chome, Higashi Hie, Hakata
Ward, Fukuoka City
149, 2-Chome, Tenjin, Chuo Ward,
Fukuoka City

Office buildings subtotal:

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

Others subtotal:
Total

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

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

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

46,585.57

30,60029,324

31,141.44

21,40020,849Tanizawa Sogo Appraisal
Co., Ltd.
Tanizawa Sogo Appraisal
Co., Ltd.

121,212.26

20,60019,955

Japan Real Estate Institute61,450.22

8,510

5,591

Japan Real Estate Institute22,191.17

10,5009,848

Tanizawa Sogo Appraisal
Co., Ltd.

14,602.88

4,970

4,252

Japan Real Estate Institute6,968.66

2,740

1,931

Japan Real Estate Institute2,801.15

1,200

956

6,467.80

2,740

1,982

7,296.17

3,660

2,885

33,069.82

5,890

5,373

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

353,787.14

112,810

102,950

23,030.30

17,40012,777

19,905.34

15,5008,711

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

6,293.75

6,720

3,719

Japan Real Estate Institute

14,677.35

9,540

5,555

Japan Real Estate Institute13,614.59

8,270

4,328

Tanizawa Sogo Appraisal
Co., Ltd.

3,339.32

3,270

2,645

Japan Real Estate Institute5,252.41

4,640

2,382

Japan Real Estate Institute6,214.77

4,700

3,942

2,981.14

3,380

3,237

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

1,343.51

8,020

7,754

Japan Real Estate Institute96,652.48

81,44055,054

4,821.25

1,920

1,617

2,710.86

1,070

873

5,619.69

2,040

1,135

Japan Real Estate Institute7,187.59

3,740

2,622

2,496.06

1,360

1,071

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

5,785.44

1,890

1,339

Japan Real Estate Institute3,758.76

2,880

2,786

Tanizawa Sogo Appraisal
Co., Ltd.

4,173.29

1,390

1,144

Japan Real Estate Institute43,233.72

9,440

7,715

24,505.65

5,560

4,724

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

17,556.32

2,450

2,143

121,848.63
572,288.25

33,740227,990

27,173
185,177

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

(Note) “Period-end appraisal value” refers to the evaluation value based on appraisals by a real estate appraiser in conformity with the method and standards for asset evaluation stipulated in FRC’s Articles ofIncorporation and rules stipulated by The Investment Trusts Association, Japan.

FUKUOKA REIT CORPORATION15FUKUOKA REIT CORPORATION

16

II. Semiannual Report

II. Semiannual Report

Status of FRC’s Assets under Management

Real estate property name34th fiscal period

35th fiscal period(March 1, 2021 to August 31, 2021)(September 1, 2021 to February 28, 2022)

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

1 [46]
1 [45]
1 [104]
1
1 [124]
13
2
2
1
1
1
25 [340](%) (Note 5)

996
1,166
1,183
262
778
253
89
40
88
111
177

11.4
13.3
13.5
3.0
8.9
2.9
1.0
0.5
1.0
1.3
2.0

99.4

5,147

58.7

1 [44]
1 [45]
1 [102]
1
1 [123]
13
2
2
1
1
1
25 [335]

1 [62]
36
16
1 [69]
1 [27]
1
11
2
6

100.0
100.0
100.0
99.2
100.0
100.0
100.0
100.0
100.0

650
571
205
322
353
86
146
164
95

7.4
6.5
2.3
3.7
4.0
1.0
1.7
1.9
1.1

1 (Note 6)

100.0

79

(Note 2)76 [231](Note 2)

97.8
97.9
99.5
100.0
97.0
100.0
100.0
100.0
100.0
100.0
100.0

990
940
1,194
262
818
251
89
40
90
111
177

11.4
10.9
13.8
3.0
9.4
2.9
1.0
0.5
1.0
1.3
2.0

99.2

4,967

57.4

1 [62]
36
16
1 [70]
1 [27]
1
11
2
6

100.0
100.0
100.0
99.2
100.0
100.0
100.0
100.0
100.0

650
572
208
323
353
86
145
164
98

7.5
6.6
2.4
3.7
4.1
1.0
1.7
1.9
1.1

0.9

1 (Note 6)

100.0

159

1.8

99.9

2,762

31.9
0.8
0.5
0.7
1.3
0.4
0.7
0.4
Undisclosed(Note 2)

99.9

2,675

30.5

76 [232]

0.8
0.4
0.7
1.3
0.4
0.7
0.5
Undisclosed

1 [66]
1 [42]
1 [104]
1 [135]
1 [95]
1
1

98.8
100.0
98.9
98.9
95.9
100.0
100.0

1

100.0

67
41
60
110
38
63
37
Undisclosed(Note 7)(Note 7)2

100.0

Undisclosed

Undisclosed(Note 7)(Note 7)1

100.0

Undisclosed

Undisclosed(Note 7)(Note 7)1

100.0

Undisclosed

Undisclosed(Note 7)(Note 7)

99.8

929

10.7

99.4

8,658

100.0

1 [64]
1 [40]
1 [101]
1 [130]
1 [97]
1
1

95.4
95.6
96.5
94.4
98.0
100.0
100.0

Tosu Logistics Center

1

100.0

66
37
60
112
39
63
43
Undisclosed(Note 7)(Note 7)

100.0

Undisclosed

Undisclosed(Note 7)(Note 7)

Undisclosed

2(Note 2)LOGICITY Hisayama

1

100.0

Undisclosed(Note 7)(Note 7)LOGICITY Wakamiya

1

100.0

Undisclosed

Undisclosed(Note 7)(Note 7)

99.2

939

10.7

12 [449]

100.0

113 [1,016]

Others subtotal:

12 [439]

Total

113 [1,010](Note 2)
(Note 2)(%) (Note 5)(Note 4)

97.9
98.1
99.9
100.0
98.7
100.0
100.0
100.0
100.0
100.0
100.0

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

LOGICITY Minato Kashii

6. Securities incorporated in the portfolio

Total leasing
Total leasing
Percentage ofPercentage of
Number ofOccupancy
Number ofOccupancy
businessbusiness
total leasing
total leasing
tenants at end rate at end oftenants at end rate at end ofrevenues
revenues
businessbusinessof period
periodof period
periodduring periods
during periods
revenues
revenues(Note 1)(%) (Note 3)(Note 1)(%) (Note 3)(mm of yen)
(mm of yen)
(Note 4)

Canal City Hakata
Canal City Hakata·B
Park Place Oita
SunLive City Kokura
Konoha Mall Hashimoto
Square Mall Kagoshima Usuki
Kumamoto Intercommunity SC
Hanahata SC
Kurume Higashi Kushiwara SC
K’s Denki Kagoshima
Marinoa City Fukuoka (Marina Side Building)

Status of FRC’s Assets under Management

99.5

8,762

(Note 2)
(Note 2)

(Note 1) “Number of tenants” is based on the total number of sections stipulated in the tenancy agreements for retail and office buildings among relevant properties. For the number of tenants in pass-throughmaster leasing properties, the number of sections stipulated in the tenancy agreements with end tenants is shown in square brackets. The Taihaku Street Business Center is an office building with aresidential tower. Its number of tenants comprises 13 for the office building and 57 for the residence in the 35th fiscal period (12 for the office building and 57 for the residence in the 34th fiscal period).
(Note 2) The total of all the tenants in other than pass-through master leasing properties and the total number of sections stipulated in the tenancy agreements with end tenants for pass-through master leasing
properties is shown in square brackets in the subtotal and total columns for “Number of tenants.”(Note 3) “Occupancy rate” refers to the percentage of leased floor space to leasable floor space and the figures are rounded off to one decimal place.
(Note 4) “Total leasing business revenues” indicates the total of real estate leasing revenues and other revenues from real estate rent in the current fiscal period.
(Note 5) “Percentage of total leasing business revenues” is rounded off to one decimal place, and the total of individual percentages in the above table may not equal 100%.
(Note 6) The number of tenants indicates the number of the lessee of the land with leasehold interest.
(Note 7) The figures are not disclosed as no consent to disclosure has been obtained from the tenants.

No relevant items.

7. List of specific transaction and forward exchange transaction contract
amount and status of fair value
The following table provides the contract amount of FRC’s specific transactions and the status of its fair value as of February 28,
2022.
Category
Off-market transaction

21,100(53)

22,70021,100(53)

9. Status of owned assets by country and region
As of the end of the 35th fiscal period, no overseas real estate properties in countries or regions other than Japan are incorporated into FRC’s portfolio.

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

Purpose(mm of yen)

Schedule
Total

Canal City Hakata

Hakata Ward,
Fukuoka City

Park Place Oita

Oita City, Oita

Konoha Mall Hashimoto

17

22,700

All real estate and real estate trust beneficiary interests owned by FRC have been entered under “3. Details of real estate properties in the portfolio” on page 16. There is no incorporation of other specified assets as of the end of the 35th fiscal period.

No relevant items.

FUKUOKA REIT CORPORATIONInterest rate swap transaction(Receivable floating; Payable fixed)
Total

Fair value(mm of yen) (Note 2)

8. Status of other assets

Konoha Mall Hashimoto

No relevant items.

(Note 1)

(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.

4. Details of renewable energy generation facilities in the portfolio
5. Details of the rights to operate public facilities, etc. in the portfolio

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

Type

Gofukumachi Business Center
Aqualia Chihaya

Nishi Ward,
Fukuoka City
Nishi Ward,
Fukuoka City
Hakata Ward,
Fukuoka City
Higashi Ward,
Fukuoka City

From August 2021 toApril 2022
From September 2021 toRenovation of common spaces
April 2022
From February 2022 to
Improvement of food court environment
April 2022
Switching to LED lighting throughout the From June 2022 tobuilding
August 2022
From December 2021 to
Replacement of air-conditioning units
March 2022
Replacement of disaster prevention
From June 2022 tofacilities and equipment
August 2022

Replacement of piping

FUKUOKA REIT CORPORATION

18

Construction
Amountcost
already paid

609

–

–

650

27

54

62

–

–

149

–

–

38

–

–

30

–

–

II. Semiannual Report

II. Semiannual Report

Capital Expenditures for Owned Real Estate

Expenses and Liabilities

2. Capital expenditures during the 35th fiscal period

2. Status of debt

Capital expenditures for the real estate properties owned by FRC totaled 600 million yen in the 35th period. Furthermore, FRC
incurred construction costs of 729 million yen in total in the period, including 121 million yen in repair and maintenance expenses classified as expenses on the Statement of Income and 7 million yen in expenses for restoration to former state. The following
table provides the overview of major construction work that was completed in the 35th fiscal period.

As of the end of the 35th fiscal period (February 28, 2022), FRC has the following debt from respective financial institutions.

Real estate property nameLocation

Purpose

PeriodCanal City Hakata

Hakata Ward, Fukuoka City

Water supply piping for guestrooms

Park Place Oita

Oita City, Oita

Renovation of external walls

SunLive City Kokura

Kokura Minami Ward,
Kitakyushu City

Renovation of common spaces

Konoha Mall Hashimoto

Nishi Ward, Fukuoka City

Formation of tenant sections

Square Mall Kagoshima Usuki

Kagoshima City, Kagoshima

Renovation of external walls

Construction cost
(mm of yen)

From June 2021 toOctober 2021
From January 2022 toFebruary 2022
From June 2021 toSeptember 2021
From May 2021 toSeptember 2021
From November 2021 to
February 2022

22
21

Category
LenderSumitomo Mitsui Banking
Current Corporation
maturities Development Bank of Japanof longterm debt The Bank of Fukuoka
Subtotal

Balance as of
September 1,
2021

Balance as ofFebruary 28,
2022

Averageinterest
rate(mm of yen)

(mm of yen)(%) (Note)

June 30, 2015

1,600

1,600

August 29, 2014

4,000

Drawdown
dateAugust 31, 2015

Repayment
date

Repayment
methodUse offunds

Description

0.790

June 30, 2022

Lump-sum uponmaturity

Refinance fundNo collateral/
No guarantee

4,000

1.010

August 31, 2022

0.407

August 31, 2022

400

400

6,000

6,000

Sumitomo Mitsui Trust Bank

July 31, 2015

1,500

1,500

0.564

July 31, 2023

Development Bank of Japan

August 31, 2015

4,000

4,000

0.880

August 31, 2023

The Nishi-Nippon City Bank

August 31, 2015

400

400

0.870

August 31, 2023

The Bank of Fukuoka

February 29, 2016

2,000

2,000

0.407

February 29, 2024

The Nishi-Nippon City Bank

February 29, 2016

2,000

2,000

0.440

February 29, 2024

3. Reserves for long-term repair and maintenance plans

Development Bank of Japan

February 29, 2016

2,000

2,000

0.620

February 28, 2025

FRC has deposited the following amounts from the cash flows generated during the 35th fiscal period in order to fund largescale repair and maintenance work in the medium- to long-term, based on long-term repairs and maintenance plans preparedfor respective properties.
(millions of yen)Mizuho Bank

February 29, 2016

500

500

0.440

February 29, 2024

Shinsei Bank

July 29, 2016

700

700

0.400

July 31, 2024

September 30, 2016

300

300

0.403

September 30, 2025

Development Bank of JapanThe Oita Bank
The Kagoshima Bank
The Kitakyushu BankThe Juhachi-Shinwa Bank
The Hiroshima Bank

December 30, 2016

1,500
100
100
100
200
100

1,500
100
100
100
200
100

0.718

December 30, 2025

The Bank of Fukuoka

December 30, 2016

1,500

1,500

0.409

December 30, 2026

MUFG Bank

March 31, 2017

800

800

0.481

March 31, 2025

March 31, 2017

600

600

0.658

March 31, 2027

Fiscal period
Balance of deposits at beginning of period
Deposits during the period
Amounts used from deposits during the period
Deposits carried forward to the next period

189
77
32

31st fiscal period

32nd fiscal period

33rd fiscal period

34th fiscal period

35th fiscal period(September 1, 2019 toFebruary 29, 2020)(March 1, 2020 toAugust 31, 2020)(September 1, 2020 toFebruary 28, 2021)(March 1, 2021 toAugust 31, 2021)(September 1, 2021 to
February 28, 2022)

1,000
–
–
1,000

1,000
–
–
1,000

1,000
–
–
1,000

1,000
–
–
1,000

1,000
–
–
1,000

Long-term Resona Bank
debt
The Higo Bank

Expenses and Liabilities
1. Details of expenses related to asset management
(thousands of yen)
Item(a) Asset management fees (Note)(b) Asset custody fees(c) Administrative service fees(d) Directors’ compensations(e) Other operating expenses
Total

Sumitomo Mitsui Trust Bank

34th fiscal period

35th fiscal period(March 1, 2021 to August 31, 2021)(September 1, 2021 to February 28, 2022)

531,986
7,544
58,8109,600
75,780683,722526,058
7,431
57,7699,600
61,771
662,630(Note) Aside from the amounts of the asset management fees shown above, 19,250 thousand yen for asset management, capitalized in the acquisition costs, related to the acquisition of Tenjin Nishi-DoriBusiness Center (Land with leasehold interest) and 38,500 thousand yen for asset management related to the disposition of Canal City Hakata·B Grand Building (88.28% co-ownership interest in Grand
Building) were paid in the 34th fiscal period.

FUKUOKA REIT CORPORATION

19

March 31, 2017

300

300

0.481

March 31, 2025

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

June 30, 2017

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

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

0.777

June 30, 2026

Development Bank of Japan

June 30, 2017

1,800

1,800

0.650

December 31, 2026

The Bank of Fukuoka

July 31, 2017

2,000

2,000

0.792

July 31, 2027

The Nishi-Nippon City Bank

July 31, 2017

2,000

2,000

0.892

July 31, 2027

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

August 31, 2017

500
500
100
100
200
100

500
500
100
100
200
100

0.850

August 31, 2027

Resona Bank

September 29, 2017

2,000

2,000

0.493

September 30, 2027

The Bank of Fukuoka

December 29, 2017

1,500

1,500

0.812

December 30, 2027

Development Bank of Japan

December 29, 2017

500

500

0.680

December 30, 2027

FUKUOKA REIT CORPORATION

20

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

Lump-sum uponmaturity

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

Lump-sum uponmaturity

Refinance fund
Refinance fund

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

Refinance fund

Refinance fund
Refinance fund
Refinance fund
Refinance fund

Refinance fundLump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity

Refinance fundLump-sum uponmaturity

Refinance fundLump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity

Refinance fund

Refinance fund

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

No collateral/
No guarantee

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

No collateral/
No guarantee

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

No collateral/
No guarantee

No collateral/
No guarantee
No collateral/
No guarantee
No collateral/
No guaranteeII. Semiannual Report

II. Semiannual Report

Expenses and Liabilities
Category
LenderDrawdown
date

Expenses and Liabilities

Balance as of
September 1,
2021

Balance as ofFebruary 28,
2022

Averageinterest
rate(mm of yen)

(mm of yen)(%) (Note)

Repayment
date

The Nishi-Nippon City Bank

February 28, 2018

1,900

1,900

0.750

February 29, 2028

Sumitomo Mitsui Trust Bank

February 28, 2018

1,100

1,100

0.600

February 26, 2027

MUFG Bank

February 28, 2018

1,500

1,500

0.500

February 27, 2026

Resona Bank

February 28, 2018

600

600

0.567

February 29, 2028

Development Bank of Japan

March 1, 2018

2,500

2,500

0.720

March 1, 2028

MUFG Bank

March 30, 2018

600

600

0.480

March 31, 2026

The Nishi-Nippon City Bank

March 30, 2018

600

600

0.802

March 31, 2028

The Bank of Fukuoka

March 30, 2018

500

500

0.802

March 31, 2028

Mizuho Bank

March 30, 2018

500

500

0.630

March 31, 2028

Sumitomo Mitsui Banking
Corporation

March 30, 2018

500

500

0.504

March 31, 2025

MUFG Bank

March 30, 2018

500

500

0.490

March 31, 2027

Sumitomo Mitsui Trust Bank

March 30, 2018

400

400

0.576

March 31, 2027

The Oita Bank

March 30, 2018

400

400

0.646

March 31, 2028

The Hiroshima Bank

March 30, 2018

400

400

0.646

March 31, 2028

Shinsei Bank

March 30, 2018

300

300

0.400

March 31, 2025

Sumitomo Mitsui Banking
Corporation

January 31, 2019

500

500

0.655

January 31, 2029

MUFG Bank

January 31, 2019

500

500

0.590

January 31, 2028

The Nishi-Nippon City Bank

January 31, 2019

400

400

0.409

January 31, 2029

Long-term The Bank of Fukuoka
debt
The Oita Bank

January 31, 2019

300

300

0.409

January 31, 2029

February 28, 2019

200

200

0.334

February 27, 2026

The Kagoshima Bank

February 28, 2019

200

200

0.334

February 27, 2026

The Higo Bank

February 28, 2019

200

200

0.334

February 27, 2026

Resona Bank

February 28, 2019

200

200

0.488

February 28, 2029

Mizuho Bank
The Bank of Saga
The Higo Bank

July 31, 2019

1,200
500
500

1,200
500
500

0.521

July 31, 2029

The Norinchukin Bank

July 31, 2019

1,500

1,500

0.303

January 29, 2027

MUFG Bank

September 25, 2019

500

500

0.480

September 29, 2028

The Nishi-Nippon City Bank

February 28, 2020

2,500

2,500

0.480

February 28, 2030

Mizuho Bank

February 28, 2020

1,700

1,700

0.420

February 28, 2030

Aozora Bank

June 30, 2020

1,000

1,000

0.569

June 28, 2030

Resona Bank

June 30, 2020

700

700

0.569

June 28, 2030

MUFG Bank

June 30, 2020

500

500

0.600

June 29, 2029

The Kagoshima Bank

June 30, 2020

500

500

0.465

June 30, 2028

Development Bank of Japan

July 31, 2020

1,500

1,500

0.530

July 31, 2030

Mizuho Bank

July 31, 2020

1,000

1,000

0.470

July 31, 2030

The Kitakyushu Bank

July 31, 2020

500

500

0.526

July 31, 2030

The Iyo Bank

July 31, 2020

200

200

0.526

July 31, 2030

The Juhachi-Shinwa Bank

March 31, 2021

1,000

1,000

0.590

March 31, 2031

FUKUOKA REIT CORPORATION

21

Repayment
methodUse offunds

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

Acquisition fundLump-sum uponmaturity

Refinance fundLump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity
Lump-sum uponmaturity

Refinance fund
Refinance fund
Refinance fund
Refinance fund

Refinance fund
Refinance fund
Refinance fund
Refinance fund

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

Refinance fund

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

Mizuho Bank
The Hiroshima Bank
Long-term The Kitakyushu Bank
debt
The Iyo Bank
The Higo Bank
Subtotal
Total

DrawdowndateJuly 30, 2021

Balance as of
September 1,
2021

Balance as ofFebruary 28,
2022

Averageinterest
rate(mm of yen)

(mm of yen)(%) (Note)

2,300
1,400
800
500
300
71,40077,400

2,300
1,400
800
500
300
71,40077,400

0.490

Repayment
date

Repayment
methodUse offunds

Description

July 31, 2031

Lump-sum uponmaturity

Refinance fundNo collateral/
No guarantee(Note) The average interest rate is a weighted-average figure during the fiscal period and is rounded to the third decimal place. Furthermore, the average interest rate of debt for which FRC conducted interest
rate swap transactions in order to hedge against interest rate fluctuation risks is the weighted-average figure during the fiscal period taking into consideration the effect of interest rate swaps.

3. Investment corporation bonds
As of the end of the 35th fiscal period (February 28, 2022), FRC has the following investment corporation bonds outstanding.
Issue

Issue date

Balance as of
September 1,
2021

Decreaseduring the
fiscal period

Balance as ofFebruary 28,2022(mm of yen)

(mm of yen)

(mm of yen)(%)

Maturitydate

Maturity
methodUse

Description

CouponFirst Series ofUnsecured Bonds

December 30, 2013

2,000

–

2,000

1.32

December 29, 2023

Lump-sum uponmaturity(Note 1)

Repayment ofdebt

No collateral/
No guarantee(Note 2)

Second Series ofUnsecured Bonds

July 31, 2017

2,000

–

2,000

1.00

July 30, 2032

Lump-sum uponmaturity(Note 1)

Repayment ofdebt

No collateral/
No guarantee(Note 2)

Third Series ofUnsecured Bonds

July 31, 2018

1,000

–

1,000

1.20

July 30, 2038

Lump-sum uponmaturity(Note 1)

Repayment ofdebt

No collateral/
No guarantee(Note 2)

5,000

–

5,000

Total

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

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

5. Subscription rights to shares
No relevant items.

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

FUKUOKA REIT CORPORATION

22

II. Semiannual Report

II. Semiannual Report

Acquisitions and Sales during the 35th Fiscal Period

Acquisitions and Sales during the 35th Fiscal Period

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

5. Transactions with the asset management company regarding
concurrent work conducted by the asset management company

No relevant items.

The asset management company (Fukuoka Realty Co., Ltd.) does not concurrently conduct any class 1 financial instruments
transaction business, class 2 financial instruments transaction business, land and building transaction business or real estatesyndication business, and has no such transactions with FRC.

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

Overview of Accounting

3. Survey on prices of specified assets, etc.
(1) Real estate, etc.
No relevant items.

1. Assets, liabilities, principal and profits/loss(2) Other

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

FRC carried out no transaction that was required to have the value, etc. reviewed pursuant to the provisions of Article 201 of theInvestment Trusts Act.

2. Changes in calculation method of depreciation

4. Transactions with interested parties, etc.

No relevant items.

(1) Transaction status
No relevant items.

3. Changes in valuation method of real estate and infrastructure assets,etc.

(2) Amount of fees paid, etc.

No relevant items.

FRC paid the following fees to the interested parties, etc. during the 35th fiscal period. Furthermore, interested parties, etc. referto the interested parties of the asset management company who have concluded an asset management agreement with FRC
and are designated in Article 123 of the Enforcement Order of the Investment Trusts Act. Of these interested parties, etc., thebelow table indicates the business partners to which FRC paid fees, etc. during the 35th fiscal period.
Category

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

Property leasing brokerage fees (Note 2)

15,001

Property management fees (Note 3)

332,648

Outsourcing fees (Note 2) (Note 4)

1,378,577

Other operating expenses (Note 2)

1,415,815

Breakdown of transactions with interested parties, etc.
Paid amount (B)Paid party(thousands of yen)

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

5,499
4,174
70,716
252,729
516,471
712,622
131,252
168,682
310,168
1,706

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

36.7
27.8
21.3
76.0
37.5
51.7
9.5
11.9
21.9
0.1

(Note 1) Aside from the paid fees shown above, FRC paid the following amounts for repairs, etc. that were ordered to interested parties, etc. during the 35th fiscal period. The amounts include construction work
fees paid to third parties through interested parties, etc.
Fukuoka Jisho Co., Ltd.
70,014 thousand yen
FJ. Entertainment Works Ltd. 318,297 thousand yen
Sunlife Co., Ltd.
215,103 thousand yen(Note 2) The property leasing brokerage fees, outsourcing fees and other operating expenses include property leasing brokerage fees, etc. paid to third parties through interested parties, etc.
(Note 3) The property management fees do not include the following construction supervision fees. In addition, of the fees below, the construction supervision fees paid upon acquiring real estate are includedin the acquisition cost of the relevant real estate.
Fukuoka Jisho Co., Ltd.
2,543 thousand yen
FJ. Entertainment Works Ltd.
17,113 thousand yen(Note 4) The outsourcing fees shown above are paid fees, etc. regarding building management outsourcing fees, and do not coincide with the outsourcing fees described in VIII. Notes to Financial Statements(Notes to statement of income) that include property management fees and others.

FUKUOKA REIT CORPORATION23

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

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

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

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

FUKUOKA REIT CORPORATION

24

III. Independent Auditor's Report

Independent Auditor’s Report
To the Board of Directors of Fukuoka REIT Corporation
OpinionWe have audited the financial statements of Fukuoka REIT Corporation (the Company), which
comprise the balance sheet as of February 28, 2022, and the statement of income, statement ofchanges in net assets, statement of cash distributions and cash flow statement for the six months
period then ended, notes to financial statements and supplementary schedules.
In our opinion, the accompanying financial statements present fairly, in all material respects, thefinancial position of the Company as of February 28, 2022, and its financial performance and its cash
flows for the six months period then ended in accordance with accounting principles generally
accepted in Japan.
Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan. Our
responsibilities under those standards are further described in the Auditor’s Responsibilities for the
Audit of the Financial Statements section of our report. We are independent of the Company inaccordance with the ethical requirements that are relevant to our audit of the financial statements inJapan, and we have fulfilled our other ethical responsibilities in accordance with these requirements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis forour opinion.
Responsibilities of Management and Those Charged with Governance for the Financial
Statements
Management is responsible for the preparation and fair presentation of the financial statements inaccordance with accounting principles generally accepted in Japan, and for such internal control as
management determines is necessary to enable the preparation of financial statements that are freefrom material misstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the Company’s ability
to continue as a going concern and disclosing, as applicable, matters related to going concern.
Those charged with governance are responsible for overseeing the Company’s financial reporting
process.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole
are free from material misstatement, whether due to fraud or error, and to issue an auditor’s reportthat includes our opinion. Reasonable assurance is a high level of assurance, but is not a guaranteethat an audit conducted in accordance with auditing standards generally accepted in Japan will always
detect a material misstatement when it exists. Misstatements can arise from fraud or error and areconsidered material if, individually or in the aggregate, they could reasonably be expected to influence
the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with auditing standards generally accepted in Japan, we exercise
professional judgment and maintain professional skepticism throughout the audit. We also: Identify and assess the risks of material misstatement of the financial statements, whether due tofraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of notdetecting a material misstatement resulting from fraud is higher than for one resulting from error,
as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the overrideof internal control.
 Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, while the purpose of the financial statement
audit is not to express an opinion on the effectiveness of the Company’s internal control.
 Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
 Conclude on the appropriateness of management’s use of the going concern basis of accounting and,based on the audit evidence obtained, whether a material uncertainty exists related to events orconditions that may cast significant doubt on the Company’s ability to continue as a going concern.
If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’sreport to the related disclosures in the financial statements or, if such disclosures are inadequate, tomodify our opinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor’s report. However, future events or conditions may cause the Company to cease to continue
as a going concern.
 Evaluate whether the presentation and disclosures of the financial statements are in accordancewith accounting principles generally accepted in Japan, the overall presentation, structure andcontent of the financial statements, including the disclosures, and whether the financial statements
represent the underlying transactions and events in a manner that achieves fair presentation.
We communicate with management regarding, among other matters, the planned scope and timing of
the audit and significant audit findings, including any significant deficiencies in internal control that
we identify during our audit.
We also provide management with a statement that we have complied with relevant ethicalrequirements regarding independence, and to communicate with them all relationships and othermatters that may reasonably be thought to bear on our independence, and where applicable, related
safeguards.
Interest required to be disclosed by the Certified Public Accountants Act of Japan
Our firm and its designated engagement partners do not have any interest in the Company which is
required to be disclosed pursuant to the provisions of the Certified Public Accountants Act of Japan.

Takeshi Yamaguchi
Designated Engagement Partner
Certified Public Accountant

Takashi Yabutani
Designated Engagement Partner
Certified Public Accountant

PricewaterhouseCoopers Aarata LLC
May 23, 2022

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

FUKUOKA REIT CORPORATION

25

2 of 2FUKUOKA REIT CORPORATION

26

IV. Balance Sheet

IV. Balance Sheet(thousands of yen)

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

(thousands of yen)

34th fiscal period

35th fiscal period

34th fiscal period

35th fiscal period(as of August 31, 2021)(as of February 28, 2022)(as of August 31, 2021)(as of February 28, 2022)

Liabilities
6,948,985
4,015,688
593,014272,674−
2,891
11,833,253*1*1

FUKUOKA REIT CORPORATION

1,167,104(24,360)
1,142,744
20,698(322)
20,376
1,571
(195)
1,375
989,124
101,200,889(35,296,331)
65,904,558
1,933,215(856,694)
1,076,521
1,459,851(668,138)
791,713
626
(594)
31
1,428,616(1,201,413)
227,203110,373,363
480,002
181,007,013

6,860,969
3,775,847
612,230
254,292
217,676
15,55011,736,566*1*1

1,171,821(39,043)
1,132,777
20,698(516)
20,182
1,571
(312)
1,258
989,124
101,745,620(36,671,427)
65,074,192
1,939,630(884,785)
1,054,845
1,461,684(707,143)
754,541
626
(594)
31
1,443,100(1,222,570)
220,530
110,373,363
500,610
180,121,458

5,545,883
15,584
5,561,467

5,545,883
11,234
5,557,117

13
10,000327,135
1,036,131
1,373,280
187,941,761

52
10,000327,135
964,988
1,302,176
186,980,752

29,93829,938
199,804,953

27,836
27,836
198,745,156

27

Current liabilities
Operating accounts payable
Current maturities of long-term debt

452,735

495,8116,000,000

6,000,000

Accounts payable-other

17,146

22,767

Accrued expenses

420,218

414,713

Income taxes payable

944

1,659

705,556−

Advances received

1,057,228

1,007,044

Deposits received

912,833

697,145

9,566,664

8,639,141

Investment corporation bonds

5,000,000

5,000,000

Long-term debt

71,400,000

71,400,000

450,811450,958

Accrued consumption taxes

Total current liabilities
Non-current liabilities

Tenant leasehold and security deposits
Tenant leasehold and security deposits received in trust*1

Total non-current liabilities

11,631,661*111,501,470

88,482,473

88,352,428

98,049,137

96,991,569

98,938,764

98,938,764

Unappropriated surplus

2,817,051

2,814,821

Total surplus

2,817,051

2,814,821

Total liabilities
Net assets
Unitholders’ equity
Unitholders’ capital
Surplus

Total unitholders’ equity
Total net assets

101,755,815*3

Total liabilities and net assets

101,755,815
199,804,953

FUKUOKA REIT CORPORATION

28

101,753,586*3101,753,586
198,745,156

V. Statement of Income

VI. Statement of Changes in Net Assets

(thousands of yen)

34th fiscal period (March 1, 2021 to August 31, 2021)

34th fiscal period

35th fiscal period(March 1, 2021 to August 31, 2021)(September 1, 2021 to February 28, 2022)

(thousands of yen)

Operating revenues
Leasing revenues – real estate*18,157,755*1

8,040,738

Other leasing revenues – real estate*1605,165*1

618,096

Gain on sales of real estate property*2104,254−8,867,174

8,658,835

Total operating revenues

Unitholders’ Equity
Unitholders’ capital
Balance as of March 1, 2021

Unappropriated surplus

Total unitholders’ equity

Total net assets

2,675,604

101,614,369

101,614,369

Dividend of surplus(2,675,356)(2,675,356)(2,675,356)

Profit2,816,802

2,816,802

2,816,802

Changes in the current fiscal period

Operating expenses
Expenses related to leasing business

98,938,764

Surplus*1 *3

4,978,758

Asset management fees

531,986*1 *3

4,810,362
526,058

Asset custody fees

7,544

7,431

Total of changes in the current fiscal period

Administrative service fees

58,81057,769Balance as of August 31, 2021

Director’s compensations

9,600

9,600

Other operating expenses

75,78061,771

Total operating expenses

5,662,481

5,472,993

3,204,693

3,185,841

Interest received

54

55

Others504

567

Total non-operating revenues

559

623

Interest expenses

257,612242,524

Interest expenses on investment corporation bonds

29,20029,200

Amortization of investment corporation bond issuance
expenses

2,102

2,102

Financing related expenses

98,49296,1573937387,447

370,022

Ordinary income

2,817,806

2,816,442

Profit before income taxes

2,817,806

2,816,442

952

1,667

Operating income
Non-operating revenues–

141,446

141,446

141,446

98,938,764

2,817,051

101,755,815

101,755,815

35th fiscal period (September 1, 2021 to February 28, 2022)


Non-operating expenses

OthersTotal non-operating expenses

Income taxes-current
Income taxes-deferred

50

(39)

Total income taxes

1,003

1,628

Profit2,816,802

2,814,814

Surplus brought forward

248

7

Unappropriated surplus

2,817,051

2,814,821

FUKUOKA REIT CORPORATION

29(thousands of yen)
Unitholders’ Equity
Unitholders’ capital
Balance as of September 1, 2021

98,938,764

Surplus
Unappropriated surplus

Total unitholders’ equity

Total net assets

2,817,051

101,755,815

101,755,815

Dividend of surplus(2,817,044)(2,817,044)(2,817,044)

Profit2,814,814

2,814,814

2,814,814

Changes in the current fiscal period

Total of changes in the current fiscal period
Balance as of February 28, 2022–

(2,229)(2,229)(2,229)98,938,764

2,814,821

101,753,586

101,753,586

FUKUOKA REIT CORPORATION

30

VII. Statement of Cash Distributions


VIII. Cash Flow Statement(thousands of yen)

Item



(thousands of yen)

34th fiscal period

35th fiscal period

34th fiscal period

35th fiscal period(March 1, 2021 to August 31, 2021)(September 1, 2021 to February 28, 2022)(March 1, 2021 to August 31, 2021)(September 1, 2021 to February 28, 2022)

I. Unappropriated surplus

2,817,051

2,814,821

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

2,817,044[3,539 yen]
7

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

Method for calculating dividends

The amount of dividends shall be decided in accordancewith the dividend policy stipulated in Article 38-1-2 of
FRC’s Articles of Incorporation and must exceed 90% of
FRC’s distributable profits as stipulated in Article 67-15-1of the Special Taxation Measures Act.
Following the above policy, FRC shall decide to distribute
2,817,044 thousand yen, which is almost the entire
amount of unappropriated surplus, as earnings dividends.
Moreover, dividend in excess of earnings as stipulated in
Article 38-2 of FRC’s Articles of Incorporation will not beprovided.

The amount of dividends shall be decided in accordancewith the dividend policy stipulated in Article 38-1-2 of
FRC’s Articles of Incorporation and must exceed 90% of
FRC’s distributable profits as stipulated in Article 67-15-1of the Special Taxation Measures Act.
Following the above policy, FRC shall decide to distribute
2,814,656 thousand yen, which is almost the entire
amount of unappropriated surplus, as earnings dividends.
Moreover, dividend in excess of earnings as stipulated in
Article 38-2 of FRC’s Articles of Incorporation will not beprovided.

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

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

2,817,806

2,816,442

Depreciation and amortization expenses

1,552,759

1,486,407

2,102

2,102

Amortization of investment corporation bond issuance expenses
Interest received

(54)

(55)

Interest expenses

286,812271,724

Gain on sales of real estate property(104,254)–

Decrease (increase) in operating accounts receivables(64,306)(19,216)–(217,676)

Increase (decrease) in accrued consumption taxes

388,975(705,556)

Increase (decrease) in operating accounts payable

19,627(29,962)

Increase (decrease) in accounts payable-other(6,134)

5,577

Decrease (increase) in consumption taxes refund receivable

Increase (decrease) in accrued expenses

3,749(3,258)

Increase (decrease) in advances received(31,695)(50,183)

Increase (decrease) in deposits expenses

118,880(215,687)

Decrease (increase) in prepaid expenses

14,511

18,381

Decrease (increase) in long-term prepaid expenses

6,812

71,142Others, net

6,897(9,271)

Subtotal

5,012,488

3,420,911

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

54

55(285,996)(273,972)(1,844)(952)

4,724,702

3,146,040

Net cash provided by (used in) investment activities
Purchase of property, plant and equipment(400)(5,092)

Proceeds from sales of property, plant and equipment in trust

7,608,310–

Purchase of property, plant and equipment in trust(8,771,773)(522,327)

Proceeds from tenant leasehold and security deposits

80

176

Repayments of tenant leasehold and security deposits

(60)

(30)

Proceeds from tenant leasehold and security deposits in trust

460,486

109,679

Repayments of tenant leasehold and security deposits in trust(721,189)(239,871)

3,283

4,978

Proceeds from restricted trust deposits
Payments for restricted trust deposits(4,575)(6,343)(1,425,837)(658,830)

Proceeds from long-term debt

6,300,000–

Repayments of long-term debt

(6,300,000)–

Dividends paid

(2,674,475)(2,816,432)(2,674,475)(2,816,432)

624,389(329,222)

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

Net cash provided by (used in) financial activities
Net increase (decrease) in cash and cash equivalents
Balance of cash and cash equivalents at beginning of period
Balance of cash and cash equivalents at end of period

FUKUOKA REIT CORPORATION

31

10,293,317
10,917,706*1

FUKUOKA REIT CORPORATION

32

10,917,706*1

10,588,484

IX. Notes to Financial Statements

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

(Significant accounting policies)
1. Depreciation method for non-current assets(1) Property, plant and equipment
Depreciation is calculated using the straight-line method.
The useful lives of major categories of property, plant and equipment including trust assets are as follows:		 Buildings:
10 – 65 years
		 Structures:
15 – 60 years
		 Machinery and equipment:
15 – 30 years
		 Vehicles and transport equipment:
7 years
		 Tools and fixtures:
5 – 20 years(2) Intangible assets
Intangible assets are amortized utilizing the straight-line method.
(3) Long-term prepaid expenses
Long-term prepaid expenses are amortized utilizing the straight-line method.

2. Accounting for deferred assets

Investment corporation bond issuance expenses
Investment corporation bond issuance expenses are amortized utilizing the straight-line method over theperiod through redemption.

3. Standards for recognition of revenues and expenses(1) Standards for revenue recognition
The details of main performance obligations concerning revenues generated from contracts between FRC
and its customers and the ordinary time to fulfil said performance obligations (ordinary time to recognize
revenues) are as follows.
➀ Sales of real estate property
		FRC recognizes revenues from sales of real estate property when the purchaser, who is a customer,
obtains control of the relevant real estate property as a result of FRC fulfilling its delivery obligations
stipulated in the transaction agreement of the real estate property.
➁	Utilities income
		FRC recognizes utilities income in accordance with the supply of electricity and water, etc. to the lessee, who is a customer, based on the lease agreement of real estate, etc. and details of agreements
incidental to it. Of the utilities income, in the case that FRC deems itself to be an agent, the net amountobtained by deducting the amount it pays to other parties from the amount it receives as charges forelectricity and gas, etc. supplied by the said other parties is recognized as revenue.
(2) Accounting treatment of property taxes, etc.
In connection with property taxes, city planning taxes and depreciated asset taxes, FRC uses the methodof charging the corresponding amounts of assessed taxes to the current fiscal period as expenses related
to leasing business.
The amount equivalent to property taxes, etc. for the initial fiscal year paid to the seller as settlementmoney upon acquisition of real estate or trust beneficiary interests in real estate as entrusted property is
not expensed but capitalized as part of the acquisition cost of the relevant property.
The amount equivalent to property taxes, etc. capitalized in the acquisition cost of real estate, etc. was20,322 thousand yen for the 34th fiscal period. No amount equivalent to property taxes, etc. was capitalized in the acquisition cost of real estate, etc. for the 35th fiscal period.

4. Method of hedge accounting

5. Scope of funds (cash and cash equivalents) in cash flow The funds (cash and cash equivalents) in the cash flow statement consist of cash on hand and cash in trust;statement
deposits that can be withdrawn at any time and deposits in trust; and short-term investments with amaturity 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 thefinancial 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 the entrusted properties are recorded in relevant accounts on the balance sheet and statement of income.
Furthermore, the following material accounts are separately stated on the balance sheet for entrusted
properties recorded in relevant accounts.
➀ Cash and deposits in trust➁	Buildings in trust, structures in trust, machinery and equipment in trust, vehicles and transport equipment in trust, tools and fixtures in trust, lands in trust and construction in progress in trust➂ Leasehold right in trust➃ Other intangible assets in trust➄ Lease and guarantee deposits in trust➅ Tenant leasehold and security deposits received in trust(2) Accounting for consumption taxes
National and local consumption taxes are accounted with the consumption taxes excluded.

(Changes in accounting policies)(1) Application of Accounting Standard for Revenue Recognition, etc.)
FRC has applied the “Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29, issued on March 31, 2020),
etc. from the beginning of the fiscal period ended February 2022, and decided to recognize revenues at the amount expected to be received in exchange for the promised goods or services when control of the goods or services is transferred to thecustomer. The impact of this change on the financial statements is immaterial.
Furthermore, in accordance with the transitional treatment stipulated in Paragraph 89-3 of the Accounting Standard for
Revenue Recognition, the note related to Revenue Recognition for the previous fiscal period is not indicated.
(2) Application of Accounting Standard for Fair Value Measurement, etc.)
FRC has applied the “Accounting Standard for Fair Value Measurement” (ASBJ Statement No. 30, issued on July 4, 2019),
etc. from the beginning of the fiscal period ended February 2022, and decided to adopt the new accounting policies set forthby said Accounting Standard, etc. going forward in accordance with the transitional treatment as stipulated in Paragraph 19of the Accounting Standard for Fair Value Measurement and Paragraph 44-2 of the “Accounting Standard for Financial Instruments” (ASBJ Statement No. 10, issued on July 4, 2019). The impact of this change on the financial statements is immaterial.
Furthermore, pursuant to the provision of Article 2-5 of the Supplementary Provision of the “Cabinet Office Ordinance Partially Revising Regulation for Terminology, Forms, and Preparation Methods of Financial Statements” (Cabinet Office Ordinance No. 61, September 24, 2021), the matters listed in Article 8-6-2, paragraph 1, item 3 of the revised Regulation on
Terminology, Forms, and Preparation Methods of Financial Statements are omitted.

(1) Method of hedge accounting
Deferred hedge accounting is applied for interest rate swap transactions. However, special accounting isapplied for interest rate swap transactions that satisfy the requirements for special accounting.
(2) Hedging instruments and hedged items
Hedging instrument: interest rate swap transactions
Hedged items: interest rates of borrowings(3) Hedging policy
FRC conducts derivative transactions to hedge interest rate fluctuation risks for floating-rate borrowings
based on FRC’s Articles of Incorporation.
(4) Method for assessing the effectiveness of hedging
Assessment of the effectiveness of hedging is omitted as requirements are satisfied for special accounting for interest rate swap transactions.

FUKUOKA REIT CORPORATION33FUKUOKA REIT CORPORATION

34

IX. Notes to Financial Statements

IX. Notes to Financial Statements(Notes to balance sheet)(Notes to statement of income)*1. Assets pledged as collateral and secured liabilities
Assets pledged as collateral are as follows:	*1. Breakdown of revenues and expenses related to real estate leasing business.
(thousands of yen)

Buildings in trust
Lands in trust

34th fiscal period

35th fiscal period

as of August 31, 2021

as of February 28, 2022

5,834,470
16,101,020
21,935,491

Total
Secured liabilities are as follows:	

5,694,873
16,101,020
21,795,894(thousands of yen)
34th fiscal period

35th fiscal period

as of August 31, 2021

as of February 28, 2022

Tenant leasehold and security deposits received in trust

911,385

821,462

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

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

34th fiscal period

35th fiscal period

as of August 31, 2021

as of February 28, 2022

6,000,000–
6,000,000

6,000,000–
6,000,000

A. Real estate leasing business revenues
Leasing revenues - real estate		Rents
		 Common charges
		 Parking revenues
Other leasing revenues - real estate		 Incidental income
		 Other miscellaneous income
Total real estate leasing business revenues
B. Expenses related to real estate leasing business
Expenses related to leasing business		 Outsourcing fees		 Repair and maintenance expenses
		 Taxes and other public charges
		 Insurance premiums and trust compensation
		 Utilities expenses
		 Depreciation and amortization expenses
		 Other expenses related to real estate leasing businessTotal expenses related to real estate leasing business
C. Revenues and expenses related to real estate leasing business (A - B)(thousands of yen)
34th fiscal period

35th fiscal period(March 1, 2021 to August 31, 2021)(September 1, 2021 to February 28, 2022)

6,755,878
1,007,813
394,063

8,157,755

581,258
23,906605,165
8,762,920

1,775,633
153,469
723,140
44,998477,384
1,552,759
251,371

4,978,758
4,978,758
3,784,162

6,677,000
944,582
419,155
571,819
46,277

1,711,225
121,025
711,798
41,708476,400
1,486,407
261,797

8,040,738

618,096
8,658,835

4,810,362
4,810,362
3,848,472*2. Breakdown of gain on sales of real estate property

34th fiscal period (March 1, 2021 to August 31, 2021)
Canal City Hakata·B Grand Building (88.28% co-ownership interest in Grand Building)[Committed line of credit agreement 2]
	(thousands of yen)

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

34th fiscal period

35th fiscal period

as of August 31, 2021

as of February 28, 2022

7,000,000–
7,000,000

7,000,000–
7,000,000(thousands of yen)
7,700,000
7,504,056
91,689104,254

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

35th fiscal period (September 1, 2021 to February 28, 2022)*3. Minimum net assets designated in Article 67- 4 in the Act on Investment Trusts and Investment Corporations.
	(thousands of yen)
34th fiscal period

35th fiscal period

as of August 31, 2021

as of February 28, 2022

50,000Not applicable.
*3. Transactions with affiliated companies.
	(thousands of yen)

50,00034th fiscal period

35th fiscal period(March 1, 2021 to August 31, 2021)(September 1, 2021 to February 28, 2022)

Expenses related to real estate leasing business

853,139775,891(Notes to statement of changes in net assets)
Total number of authorized investment units and total number ofinvestment units outstanding
Total number of authorized investment units
Total number of investment units outstanding

FUKUOKA REIT CORPORATION

35

34th fiscal period

35th fiscal period(March 1, 2021 to August 31, 2021)(September 1, 2021 to February 28, 2022)

10,000,000 units
796,000 units

10,000,000 units
796,000 units

FUKUOKA REIT CORPORATION

36

IX. Notes to Financial Statements

IX. Notes to Financial Statements(Notes to cash flow statement)*1. Relationship between the balance of cash and cash equivalents at end of period and the amounts of the corresponding accounts on the balance sheet.
	(thousands of yen)
34th fiscal period

35th fiscal period(March 1, 2021 to August 31, 2021)(September 1, 2021 to February 28, 2022)

Cash and deposits
Cash and deposits in trust
Restricted trust deposits (Note)
Cash and cash equivalents

6,948,985
4,015,688(46,966)
10,917,706

6,860,969
3,775,847(48,332)
10,588,484

2. Matters concerning fair value of financial instruments(Note) Restricted trust deposits are trust deposits reserved for refunding tenant leasehold and security deposits deposited by tenants and for other purposes.

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

Due within 1 year
Due after 1 year
Total

(thousands of yen)

34th fiscal period

35th fiscal period(as of August 31, 2021)(as of February 28, 2022)

5,884,692
11,467,779
17,352,471

5,690,287
10,188,449
15,878,736(Notes to financial instruments)
1. Matters concerning status of financial instruments(1) Policy on handling financial instruments
In order to secure stable earnings and steady growth of assets under management, FRC procures funds primarily throughborrowings from financial institutions, issuance of investment corporation bonds or issuance of investment units for property
acquisitions, repair and maintenance work, repayment of interest-bearing debt and other purposes.
In procuring interest-bearing debt, FRC borrows funds primarily in long-term, fixed interest debt based on the policy of
establishing a solid financial structure, and conducts conservative operations intended to secure financial stability and liquidity by dispersing debt payment dates and utilizing committed lines of credit and through other measures.
With regard to surplus funds, FRC manages them as various deposits and savings, etc. to support efficient management
while considering security.
FRC conducts derivative transactions only for the purpose of hedging the risk of future interest rate fluctuation, and not forthe purpose of speculation.
(2) Description of financial instruments and associated risks, and risk management structure
Debt and investment corporation bonds are funds procured primarily for acquiring real estate trust beneficiary interests andrefinancing of borrowings. Borrowings and investment corporation bonds are exposed to liquidity risks upon debt payment
dates, but FRC works to mitigate these risks by such measures as appropriately controlling the ratio of interest-bearing debt
to total assets and executing commitment line agreements with local financial institutions that are lenders to secure on-handliquidity.
In addition, borrowings with floating interest rates are exposed to interest rate fluctuation risks. However, FRC works to
reduce the risks by such measures as adjusting the ratio of the balance of borrowings with floating interest rates to totalborrowings in accordance with the financial environment and other factors. FRC conducts derivative transactions (specifically interest rate swap transactions) for part of its borrowings with floating interest rates in order to hedge the risk of futurefluctuations in the rates of interest payable. Furthermore, assessment of the effectiveness of these interest rate swaps isomitted as it has been determined that they have met the requirements for special accounting. FRC executes and manages
its derivative transactions in accordance with its financial derivative transaction management policies and, it does so only withfinancial institutions it determines to have a certain level of creditworthiness, by reference to their credit ratings, to reducecounterparty risks.
FRC manages surplus funds in large time deposits. Such deposits are subject to the risks of failure of the financial institutions holding the deposits as well as other credit risks. FRC mitigates the risks by limiting its deposits to financial institutions
with a certain level of creditworthiness, by reference to their credit ratings, as well as by setting short durations for these
deposits.
Tenant leasehold and security deposits and tenant leasehold and security deposits received in trust are deposits fromtenants and are exposed to liquidity risks if tenants move out before the contracts expire. FRC mitigates this risk by such
FUKUOKA REIT CORPORATION

37

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

The following table includes the book values for financial instruments as recorded on the balance sheet, the corresponding fairvalues and the difference between these amounts as of August 31, 2021. Furthermore, notes to Cash and deposits and Cashand deposits in trust are omitted as these are settled with cash and within a short period of time, and thus the fair value is approximately the same as the book value.
(thousands of yen)(1) Current maturities of long-term debt
(2) Investment corporation bonds(3) Long-term debt
(4) Tenant leasehold and security deposits(5) Tenant leasehold and security deposits received in trust
Total of liabilities(6) Derivative transactions
Total of derivative transactions

Book value recorded on thebalance sheet
6,000,000
5,000,000
71,400,000–
87,40882,487,408––

Fair value(Note 1)

6,027,728
5,235,538
71,938,633–
87,112
83,289,012––

Difference
27,728
235,538
538,633–(296)
801,603––

The following table includes the book values for financial instruments as recorded on the balance sheet, the corresponding fairvalues and the difference between these amounts as of February 28, 2022. Furthermore, notes to Cash and deposits and Cashand deposits in trust are omitted as these are settled with cash and within a short period of time, and thus the fair value is approximately the same as the book value.
(thousands of yen)(1) Current maturities of long-term debt
(2) Investment corporation bonds(3) Long-term debt
(4) Tenant leasehold and security deposits(5) Tenant leasehold and security deposits received in trust
Total of liabilities(6) Derivative transactions
Total of derivative transactions

Book value recorded on thebalance sheet
6,000,000
5,000,000
71,400,000
450,958
11,501,470
94,352,428––

Fair value(Note 1)

6,018,611
5,156,907
71,643,128
331,704
9,935,364
93,085,714––

Difference
18,611
156,907
243,128(119,253)(1,566,106)(1,266,713)––(Note 1) Calculation method for fair value of financial instruments(1) Current maturities of long-term debt, (2) investment corporation bonds and (3) Long-term debt
		The fair value of long-term debt with fixed interest rates (including debt with practical fixed interest rates through interest rate swaps) and investment corporation bonds (the “debt, etc.”) is calculatedby discounting the total amount of principal and interest by the rate assumed as being applicable in the event of a new drawdown of similar debt, etc.
		The fair value of long-term debt with floating interest rates is based on the book value, as the contract terms require the interest rates to be revised in a certain period of time (within six months) andthus is considered to be nearly equal to the book value.
(4) Tenant leasehold and security deposits and (5) Tenant leasehold and security deposits received in trust		The fair value of tenant leasehold and security deposits and tenant leasehold and security deposits received in trust is calculated by using the present value, which is obtained by discounting thefuture cash flows of such deposits by a rate that takes into account the term remaining until the reimbursement deadline and credit risks.
(6) Derivative transactions
		 Please refer to (Notes to derivative transactions).
(Note 2) Amount of repayment of long-term debt and investment corporation bonds scheduled to be due after closing of accounts (as of August 31, 2021)

FUKUOKA REIT CORPORATION38

IX. Notes to Financial Statements

IX. Notes to Financial Statements	(thousands of yen)
Long-term debt
Investment corporationbonds

Due in 1 year or less
6,000,000

1 to 2 years
5,900,000

2 to 3 years
5,200,000

3 to 4 years
3,900,000

4 to 5 years
11,100,000

Due after 5 years
45,300,000––

2,000,000––

3,000,000

2. Derivatives to which hedge accounting is applied
34th fiscal period (as of August 31, 2021)
The following is the contract amount or amount equivalent to the principal provided in the contract as of the closing of accounts
for each method of hedge accounting.
(thousands of yen)Amount of repayment of long-term debt and investment corporation bonds scheduled to be due after closing of accounts (as of February 28, 2022)

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

Due in 1 year or less
6,000,000

1 to 2 years
10,400,000

2 to 3 years
2,700,000

3 to 4 years
6,400,000

4 to 5 years
12,500,000

Due after 5 years
39,400,000–

2,000,000–––

3,000,000(Notes to investment securities)

Method of hedge accounting

Type of derivative transactions,etc.

Main hedged
item

Special accounting for interest rate swaps

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

Contract amount, etc.
Of which,exceeding 1 year
22,700,000

21,100,000

Fair
value

Calculation
method for thefair value(*)–(*) Transactions for which special accounting for interest rate swaps is applied are combined with long-term debt for accounting purposes. Accordingly, their fair value is included in the fair value of the relevant
long-term debt (refer to Notes to financial instruments, 2. Matters concerning fair value of financial instruments, (Note 1) (3)).

35th fiscal period (as of February 28, 2022)

34th fiscal period (as of August 31, 2021)

The following is the contract amount or amount equivalent to the principal provided in the contract as of the closing of accounts
for each method of hedge accounting.

Not applicable.



35th fiscal period (as of February 28, 2022)
Not applicable.

(Notes to derivative transactions)
1. Derivatives to which hedge accounting is not applied
34th fiscal period (as of August 31, 2021)(thousands of yen)
Method of hedge accounting

Type of derivative transactions,etc.

Main hedged
item

Special accounting for interest rate swaps

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

Contract amount, etc.
Of which,exceeding 1 year
22,700,000

21,100,000

Fair
value

Calculation
method for thefair value(*)–(*) Transactions for which special accounting for interest rate swaps is applied are combined with long-term debt for accounting purposes. Accordingly, their fair value is included in the fair value of the relevant
long-term debt (refer to Notes to financial instruments, 2. Matters concerning fair value of financial instruments, (Note 1) (3)).

(Notes to retirement benefits)

Not applicable.

34th fiscal period (as of August 31, 2021)
Not applicable as FRC does not have any retirement benefit system.

35th fiscal period (as of February 28, 2022)
Not applicable.

35th fiscal period (as of February 28, 2022)
Not applicable as FRC does not have any retirement benefit system.

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

34th fiscal period

35th fiscal period(as of August 31, 2021)(as of February 28, 2022)

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

13
13
13

52
52
52

2. Breakdown of significant causes of the difference between the effective statutory income tax rate and the effective income tax rate after application of tax effect accounting.
(%)
34th fiscal period

35th fiscal period(as of August 31, 2021)(as of February 28, 2022)

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

FUKUOKA REIT CORPORATION39FUKUOKA REIT CORPORATION

31.25(31.24)
0.03
0.04

40

31.25
(31.23)0.04
0.06

IX. Notes to Financial Statements

IX. Notes to Financial Statements(Notes to equity method income and earnings)
34th fiscal period (from March 1, 2021 to August 31, 2021)(3) Sister companies

Not applicable as FRC does not have any affiliated companies.

34th fiscal period (from March 1, 2021 to August 31, 2021)


35th fiscal period (from September 1, 2021 to February 28, 2022)
Not applicable as FRC does not have any affiliated companies.

Classification(Notes to transactions with related parties)

Subsidiaries
of otheraffiliates

FJ.
Entertainment Hakata Ward,
Works Ltd. Fukuoka City

Subsidiaries
of otheraffiliates

Fukuoka
Realty Co.,Ltd.

1. Transactions with related parties(1) Parent company and major corporate unitholders
34th fiscal period (from March 1, 2021 to August 31, 2021)
Classification

Other
affiliates

Name

Fukuoka
Jisho Co.,Ltd.

LocationHakata Ward,
Fukuoka City

Capital100,000(Note 3)Business
description

General realestatebusiness

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

Descriptionofrelationship

Descriptionoftransaction

Transaction
amountCategory

Balance at
end ofperiod7,700,000––

Operatingaccounts
payable63,489(Note 4)

853,139(Note 4)(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 Taihaku Street Business Center. The lease contract is a master lease type with passthrough rent, in which rents and other proceeds from end tenants are directly related to an increase or decrease of FRC’s revenues.
For the property covered by the said type of agreement, the above table shows figures that regard end tenants as direct lessees.
(Note 4) Consumption taxes are not included in the transaction amount but are included in the balance at end of period.

35th fiscal period (from September 1, 2021 to February 28, 2022)
Classification

Name

Other
affiliates

Fukuoka
Jisho Co.,Ltd.

LocationHakata Ward,
Fukuoka City

Capital100,000(Note 2)Business
description
General realestatebusiness[or ownership of suchin FRC]

Descriptionofrelationship

Location

CapitalBusiness
description

20,000Real estatebusiness

200,000

Asset
managementof FRC andotherbusinesses(Note 2)

Hakata Ward,
Fukuoka City

(thousands of yen)

Purchase ofreal estate,
Consignment
etc. (Note 1)
Ownership in FRC
of real estate
Direct [9.19%]
management, Consignment
Indirect [0.76%]
of real estateetc.
management,
etc. (Note 2)

FRC’s share of
voting rights, etc.

Name

Descriptionoftransaction

Consignment Consignment
Ownership in FRC
of real estate of real estate
Direct [9.19%]
management, management,
Indirect [0.76%]
etc.
etc. (Note 1)(thousands of yen)Transaction
amount775,891(Note 3)Category
Operatingaccounts
payableBalance at
end ofperiod53,373(Note 3)(Note 1) Transaction terms and conditions are determined in reference to market prices, etc. and by concluding business consignment agreements after negotiating on prices.
(Note 2) FRC has concluded a building lease and management consignment agreement with Fukuoka Jisho Co., Ltd. for Taihaku Street Business Center. The lease contract is a master lease type with passthrough rent, in which rents and other proceeds from end tenants are directly related to an increase or decrease of FRC’s revenues.
For the property covered by the said type of agreement, the above table shows figures that regard end tenants as direct lessees.
(Note 3) Consumption taxes are not included in the transaction amount but are included in the balance at end of period.

–

Asset
managementof FRC, etc.

(Note 4)35th fiscal period (from September 1, 2021 to February 28, 2022)
Classification

Name

Location

Subsidiaries
of otheraffiliates

FJ.
Entertainment Hakata Ward,
Works Ltd. Fukuoka City

Subsidiaries
of otheraffiliates

Fukuoka
Realty Co.,Ltd.

CapitalBusiness
description

Operatingaccounts
payable218,691

Accruedexpenses

308,536(Note 4)(Note 4)20,000Real estatebusiness

200,000

Asset
managementof FRC andotherbusinesses(Note 2)

Hakata Ward,
Fukuoka City

(thousands of yen)

FRC’s share of
voting rights, etc. Description of Description of Transaction[or ownership of relationship transaction
amountsuch in FRC]
Consignment Consignmentof real estate of real estate 1,357,216–(Note 5)management, management,
etc.
etc. (Note 1)

–

Asset
managementof FRC, etc.
(Note 3)

Payment of
asset
managementfees

526,058(Note 5)

Category

Balance at
end ofperiodOperatingaccounts
payable207,897

Accruedexpenses

306,190(Note 5)(Note 5)(Note 4)(Note 1) Transaction terms and conditions are determined in reference to market prices, etc. and by concluding business consignment agreements after negotiating on prices.
(Note 2) FRC has concluded with FJ. Entertainment Works Ltd. a building lease and management consignment agreement for Canal City Hakata, Canal City Hakata·B, Canal City Business Center Building andKonoha Mall Hashimoto, and a real estate lease and management consignment agreement for Park Place Oita. The relevant lease agreements are master lease type with pass-through rent, in which
rents and other proceeds from end tenants are directly related to an increase or decrease of FRC’s revenues. For the properties covered by the said type of the agreements, the above table shows figuresthat regard end tenants as direct lessees.
(Note 3) Although Etsuo Matsuyuki had been Executive Director of FRC as of the end of the 35th fiscal period, Zenji Koike was elected as Executive Director of FRC at its 10th General Meeting of Unitholders.
As of the date of this document, Zenji Koike concurrently serves as President and CEO of Fukuoka Realty Co., Ltd.
(Note 4) The amount of the asset management fees is decided based on the asset management consignment agreement following discussion between the concerned parties.
(Note 5) Consumption taxes are not included in the transaction amount but are included in the balance at end of period.

34th fiscal period (from March 1, 2021 to August 31, 2021)

34th fiscal period (from March 1, 2021 to August 31, 2021)

Not applicable.

Not applicable.

35th fiscal period (from September 2021 to February 28, 2022)
Not applicable.

Not applicable.

41

531,986

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

(2) Affiliated companies, etc.

FUKUOKA REIT CORPORATION

Payment of
asset
management
fees

Category(Note 3)

(4) Directors and major individual unitholders

35th fiscal period (from September 2021 to February 28, 2022)(thousands of yen)

FRC’s share of
voting rights, etc. Description of Description of Transaction[or ownership of relationship transaction
amountsuch in FRC]
Consignment Consignmentof real estate of real estate 1,358,342–(Note 4)
management, management,
etc.
etc. (Note 1)

FUKUOKA REIT CORPORATION

42

IX. Notes to Financial Statements

IX. Notes to Financial Statements

2. Parent company and major affiliated companies

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

34th fiscal period (from March 1, 2021 to August 31, 2021)(thousands of yen)
Use

Not applicable.

35th fiscal period (from September 2021 to February 28, 2022)

RetailNot applicable.

(Notes to asset retirement obligations)

Office buildings

34th fiscal period (from March 1, 2021 to August 31, 2021)
Not applicable.
Others35th fiscal period (from September 2021 to February 28, 2022)
Not applicable.
Total(Notes to properties for lease)
FRC owns retail, office buildings and other properties for lease in the Kyushu area centering on Fukuoka Prefecture. The following table provides the book value recorded on the balance sheet, amount of change during the period and fair value of theseproperties for lease.
(thousands of yen)
Use

RetailOffice buildings

OthersTotal

34th fiscal period

35th fiscal period(March 1, 2021 to August 31, 2021)(September 1, 2021 to February 28, 2022)

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

34th fiscal period

35th fiscal period(March 1, 2021 to August 31, 2021)(September 1, 2021 to February 28, 2022)

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

5,147,997
3,311,116
1,836,881

4,967,079
3,185,087
1,781,991

2,675,524
1,240,831
1,434,693

2,762,339
1,213,946
1,548,392

939,398
426,810
512,587

929,416
411,328
518,087

8,762,920
4,978,758
3,784,162

8,658,835
4,810,362
3,848,472(Note) Real estate leasing business revenues and expenses related to real estate leasing business are comprised of leasing business revenues and accompanying expenses (outsourcing fees, depreciation andamortization expenses, taxes and other public charges, etc.), and are recorded as Leasing revenues - real estate, Other leasing revenues - real estate and Expenses related to leasing business, respectively.

(Notesto revenue recognition)

35th fiscal period (from September 1, 2021 to February 28, 2022)
Breakdown of information on revenue from contracts with customers

111,423,388(8,093,210)
103,330,177
113,340,000

103,330,177(322,706)
103,007,471
112,810,000

47,997,375
7,864,406
55,861,781
80,460,000

55,861,781(363,826)
55,497,954
81,440,000

27,568,211(191,688)
27,376,522
33,050,000

27,376,522(203,372)
27,173,149
33,740,000

186,988,974(420,493)
186,568,481
226,850,000

186,568,481(889,905)
185,678,576
227,990,000(Note 1) Amount recorded on the balance sheet is the cost of acquisition less accumulated depreciation.
(Note 2) Of the amount of change during the 34th fiscal period, the amount of increase is primarily attributable to acquisition of Tenjin Nishi-Dori Business Center (Land with leasehold interest) (7,754 million yen)
and capital expenditures (445 million yen), and the amount of decrease is primarily attributable to disposition of Canal City Hakata·B Grand Building (88.28% co-ownership interest in Grand Building)(7,504 million yen) and depreciation and amortization expenses (1,552 million yen). Of the amount of change during the 35th fiscal period, the amount of increase is primarily attributable to capital
expenditures (600 million yen), and the amount of decrease is primarily attributable to depreciation and amortization expenses (1,486 million yen).
(Note 3) The fair value at end of period is the appraisal value provided by outside real estate appraisers.

(thousands of yen)
Revenues from contracts with customers(Note)

Proceeds from sales of real estate
Utilities income
OthersTotal–
427,51098,934526,445

Sales to external customers–
427,5108,231,324
8,658,835(Note) Leasing business revenues subject to the “Accounting Standard for Lease Transactions” (ASBJ Statement No.13) and transfers of real estate property subject to the “Practical Guidelines on Accounting by
Transferors for Securitization of Real Estate Using Special Purpose Companies” (Accounting System Committee Report No.15 of the Japanese Institute of Certified Public Accountants) are excluded from
“Revenues from contracts with customers” as such revenues are not covered by the Accounting Standard for Revenue Recognition. Revenues generated from contracts with customers mainly represent
proceeds from sales of real estate and utilities income.

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

[Related information]
34th fiscal period (from March 1, 2021 to August 31, 2021)(1) Information by product and service
Descriptions are omitted as FRC’s operating revenues under single product/service classification for outside customers exceed 90% of operating revenues recorded in the statement of income.

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

FUKUOKA REIT CORPORATION43FUKUOKA REIT CORPORATION

44

IX. Notes to Financial Statements

X. Supplementary Schedules(Schedule of securities)(b) Property, plant and equipment
Descriptions are omitted as the amount of FRC’s property, plant and equipment located in Japan exceeds 90% of property, plant and equipment recorded on the balance sheet.

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

Not applicable.

(Schedule of contract amount, etc. and fair value of derivative transactions
andforward exchange transactions)(thousands of yen)
Category

35th fiscal period (from September 2021 to February 28, 2022)

TypeInterest rate swap transaction
Receivable floating; Payable fixed

Off-market transaction(1) Information by product and service

Total

Descriptions are omitted as FRC’s operating revenues under single product/service classification for outside customers exceed 90% of operating revenues recorded in the statement of income.

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

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

(Notes to per unit information)
34th fiscal period

35th fiscal period(March 1, 2021 to August 31, 2021)(September 1, 2021 to February 28, 2022)

127,833
3,538

Net assets per unit (yen)Profit per unit (yen)127,8313,536(Note 1) Profit per unit was calculated by dividing the profit by the daily weighted average number of investment units. Diluted profit per unit is not stated as there are no dilutive investment units.
(Note 2) Profit per unit was calculated based on the following data:

34th fiscal period

35th fiscal period(March 1, 2021 to August 31, 2021)(September 1, 2021 to February 28, 2022)

2,816,802–
2,816,802
796,000

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

2,814,814–
2,814,814
796,000

Contract amount, etc.
Of which, exceeding 1 year

(Note 1)

21,100,000(53,177)

22,700,000

21,100,000(53,177)(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.

(Schedule of property, plant and equipment, and intangible assets)(thousands of yen)Type of asset
Buildings
Structures
Tools and fixtures
Land
Buildings in trust
Structures in trust
Total
property, Machinery and equipment
plant and in trust
equipment Vehicles and transport
equipment in trust
Tools and fixtures in trust
Land in trust
Construction in progressin trust
Subtotal
Leasehold right in trust
Total
Other intangible assets inintangible
trust
assetsSubtotal
Total

Balance as of
September 1,
2021
1,167,104
20,6981,571
989,124
101,200,889
1,933,215

Increase

Decrease

Balance as ofAccumulated Depreciation
February 28,
depreciation for the period2022
1,171,821
39,043
14,683
20,698
516
193
1,571
312
117
989,124––
101,745,620
36,671,427
1,377,483
1,939,630
884,785
28,328

–
–
–
–
6,019
483

1,459,851

1,833

–

1,461,684

707,143

39,005754,541

626

–

–

626

594

–

31

1,428,616
110,373,363

15,651–

1,167–

1,443,100
110,373,363

1,222,570–

22,246–

220,530
110,373,363

480,00225,445

4,837

500,610––500,610

219,055,064
5,545,883

605,295–

12,507–

219,647,851
5,545,883

39,526,393–

1,482,057–

180,121,458
5,545,883

71,136––

71,13659,901

4,349

11,234

5,617,019
224,672,083–
605,295–
12,507

5,617,019
225,264,870

59,901
39,586,294

4,349
1,486,407

5,557,117
185,678,576(Note) The main increase in the 35h fiscal period is due to construction work at properties.

Not applicable.

45

Net property
andRemarks
equipment(Note)
1,132,777
20,182
1,258
989,124(Note)
65,074,192(Note)
1,054,845

4,716
–
–
–
550,750
6,898

No relevant items.

FUKUOKA REIT CORPORATION(Note 2)

22,700,000(Schedule of other specified assets)(Notes to significant subsequent events)

Fair value

FUKUOKA REIT CORPORATION

46(Note)(Note)

X. Supplementary Schedules

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

Issue date

Balance as of
September 1,
2021

Decreaseduring the
fiscal period

Balance as ofFebruary 28,
2022(thousands of yen)(thousands of yen)(thousands of yen)First Series ofUnsecured Bonds

December 30,
2013

2,000,000

Second Series ofUnsecured Bonds

July 31, 2017

2,000,000

Third Series ofUnsecured Bonds

July 31, 2018

Total

1,000,000
5,000,000––––

Coupon(%)

2,000,000
2,000,000
1,000,000(Scheduleof debt)Maturity date

December 29,
1.32
2023
1.00
1.20

2 to 3 years–––

400,000–

6,000,000

Sumitomo Mitsui Trust Bank

Refinance fund–

400,000

0.407

August 31, 2022

Refinance fund––6,000,000

1,500,000––

1,500,000

0.564

July 31, 2023

Refinance fundDevelopment Bank of Japan

4,000,000––

4,000,000

0.880

August 31, 2023

Refinance fund

The Nishi-Nippon City Bank

400,000––

400,000

0.870

August 31, 2023

Refinance fund

The Bank of Fukuoka

2,000,000––

2,000,000

0.407

February 29, 2024

Refinance fund(thousands of yen)

The Nishi-Nippon City Bank

2,000,000––

2,000,000

0.440

February 29, 2024

Refinance fund

4 to 5 years–

Development Bank of Japan

2,000,000––

2,000,000

0.620

February 28, 2025

Refinance fundMizuho Bank

500,000––

500,000

0.440

February 29, 2024

Refinance fund

Shinsei Bank

700,000––

700,000

0.400

July 31, 2024

Refinance fund

Sumitomo Mitsui Trust Bank

300,000––

300,000

0.403

September 30, 2025

Refinance fundDevelopment Bank of Japan

1,500,000––

1,500,000

The Oita Bank

100,000––

100,000

The Kagoshima Bank

100,000––

100,000

The Kitakyushu Bank

100,000––

100,000

0.718

December 30, 2025

Refinance fund

The Juhachi-Shinwa Bank

200,000––

200,000

The Hiroshima Bank

100,000––

100,000

The Bank of Fukuoka

1,500,000––

1,500,000

0.409

December 30, 2026

Refinance fund

800,000––

800,000

0.481

March 31, 2025

Refinance fund

600,000––

600,000

0.658

March 31, 2027

Refinance fund

300,000––

300,000

0.481

March 31, 2025

Refinance fund

The Bank of Fukuoka

1,300,000––

1,300,000

The Nishi-Nippon City Bank

1,000,000––

1,000,000

The Oita Bank

700,000––

700,000

The Kitakyushu Bank

700,000––

700,000

0.777

June 30, 2026

Refinance fundRepayment ofdebt

No collateral/
No guarantee(Note 2)

(Note 2)5,000,000

1 to 2 years
2,000,000

4,000,000

August 31, 2022

No collateral/
No guaranteeDue in 1 year or less–

1,600,000

1.010(Note 2)

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

Category
Investment corporation bonds–

4,000,000

Repayment of
debt(Note 1)–

Refinance fundNo collateral/
No guarantee

July 30,2038

1,600,000

June 30, 2022

Repayment of
debt(Note 1)3 to 4 years–

LenderSumitomo Mitsui Banking
Corporation
Current
maturities Development Bank of Japanof longterm debt The Bank of Fukuoka
Subtotal

MUFG Bank
Long-term Resona Bank
debt
The Higo Bank

The Miyazaki Bank

No collateral/
No guarantee
No collateral/
No guarantee

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

No collateral/
No guarantee

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

No collateral/
No guarantee

700,000––

700,000––

1,100,000

500,000––

500,000

Development Bank of Japan

1,800,000––

1,800,000

0.650

December 31, 2026

Refinance fund

The Bank of Fukuoka

2,000,000––

2,000,000

0.792

July 31, 2027

Refinance fund

The Nishi-Nippon City Bank

2,000,000––

2,000,000

0.892

July 31, 2027

Refinance fund

The Nishi-Nippon City Bank

500,000––

500,000

The Bank of Fukuoka

500,000––

500,000

The Oita Bank

100,000––

100,000

The Kitakyushu Bank

100,000––

100,000

0.850

August 31, 2027

Refinance fundNo collateral/
No guarantee

The Juhachi-Shinwa Bank

200,000––

200,000

The Hiroshima Bank

100,000––

100,000

2,000,000––

2,000,000

0.493

September 30, 2027

Refinance fundNo collateral/
No guarantee

The Iyo Bank

Resona Bank

47

No collateral/
No guarantee

1,100,000

The Juhachi-Shinwa BankFUKUOKA REIT CORPORATION

Balance as of Average
February 28, interest rate(%) (Note 1)
2022
0.790

Lump-sumupon maturity

Lump-sumupon maturity

Decrease

Use of funds Description

Description

Lump-sumupon maturity

Increase

Repayment
date

Use

July 30,
2032

Balance as of
September 1,
2021

Category

Maturity
method(Note 1)(thousands of yen)

FUKUOKA REIT CORPORATION48

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

X. Supplementary Schedules

X. Supplementary Schedules

LenderBalance as of
September 1,
2021

Increase

Decrease

The Bank of Fukuoka

1,500,000––

1,500,000

0.812

December 30, 2027

Refinance fundDevelopment Bank of Japan

500,000––

500,000

0.680

December 30, 2027

Refinance fund

The Nishi-Nippon City Bank

1,900,000––

1,900,000

0.750

February 29, 2028

Refinance fund

Sumitomo Mitsui Trust Bank

1,100,000––

1,100,000

0.600

February 26, 2027

Refinance fund

MUFG Bank

1,500,000––

1,500,000

0.500

February 27, 2026

Refinance fundResona Bank

600,000––

600,000

0.567

February 29, 2028

Refinance fund

2,500,000––

2,500,000

0.720

March 1, 2028

Acquisition fundCategory

Development Bank of Japan

Balance as of Average
February 28, interest rate(%) (Note 1)
2022

Repayment
date

Use of funds Description

MUFG Bank

600,000––

600,000

0.480

March 31, 2026

Refinance fund

The Nishi-Nippon City Bank

600,000––

600,000

0.802

March 31, 2028

Refinance fund

The Bank of Fukuoka

500,000––

500,000

0.802

March 31, 2028

Refinance fundMizuho Bank

500,000––

500,000

0.630

March 31, 2028

Refinance fund

Sumitomo Mitsui Banking
Corporation

500,000––

500,000

0.504

March 31, 2025

Refinance fund

MUFG Bank

500,000––

500,000

0.490

March 31, 2027

Refinance fund

Sumitomo Mitsui Trust Bank

400,000––

400,000

0.576

March 31, 2027

Refinance fund

The Oita Bank

400,000––

400,000

0.646

March 31, 2028

Refinance fund

The Hiroshima Bank

400,000––

400,000

0.646

March 31, 2028

Refinance fund

Shinsei Bank

300,000––

300,000

0.400

March 31, 2025

Refinance fund

Sumitomo Mitsui Banking
Corporation

500,000––

500,000

0.655

January 31, 2029

Refinance fund

500,000––

500,000

0.590

January 31, 2028

Refinance fund

400,000––

400,000

0.409

January 31, 2029

Refinance fund

The Bank of Fukuoka

300,000––

300,000

0.409

January 31, 2029

Refinance fund

The Oita Bank

200,000––

200,000

0.334

February 27, 2026

Refinance fund

The Kagoshima Bank

200,000––

200,000

0.334

February 27, 2026

Refinance fund

The Higo Bank

200,000––

200,000

0.334

February 27, 2026

Refinance fundResona Bank

200,000––

200,000

0.488

February 28, 2029

Refinance fundMizuho Bank

1,200,000––

1,200,000

The Bank of Saga

500,000––

500,000

0.521

July 31, 2029

Refinance fund

The Higo Bank

500,000––

500,000

1,500,000––

1,500,000

0.303

January 29, 2027

Refinance fund

500,000––

500,000

0.480

September 29, 2028

Refinance fund

The Nishi-Nippon City Bank

2,500,000––

2,500,000

0.480

February 28, 2030

Refinance fundMizuho Bank

1,700,000––

1,700,000

0.420

February 28, 2030

Refinance fundAozora Bank

1,000,000––

1,000,000

0.569

June 28, 2030

Refinance fundResona Bank

700,000––

700,000

0.569

June 28, 2030

Acquisition fund

MUFG Bank

500,000––

500,000

0.600

June 29, 2029

Acquisition fund

The Kagoshima Bank

500,000––

500,000

0.465

June 30, 2028

Acquisition fundDevelopment Bank of Japan

1,500,000––

1,500,000

0.530

July 31, 2030

Refinance fundMizuho Bank

1,000,000––

1,000,000

0.470

July 31, 2030

Refinance fundLong-term MUFG Bank
debt
The Nishi-Nippon City Bank

The Norinchukin BankMUFG BankFUKUOKA REIT CORPORATION49

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

LenderBalance as of
September 1,
2021

Increase

Decrease

The Kitakyushu Bank

500,000––

500,000

The Iyo Bank

200,000––

1,000,000–

2,300,000

Category

Balance as of Average
February 28, interest rate(%) (Note 1)
2022

Repayment
date

Use of funds Description

0.526

July 31, 2030

Refinance fund

200,000

0.526

July 31, 2030

Refinance fund–

1,000,000

0.590

March 31, 2031

Refinance fund––2,300,000

1,400,000––

1,400,000

800,000––

800,000

0.490

July 31, 2031

Refinance fund

The Iyo Bank

500,000––

500,000

The Higo Bank

300,000––

300,000

71,400,000––

71,400,000

77,400,000––

77,400,000

The Juhachi-Shinwa Bank
Mizuho Bank
Long-term
The Hiroshima Bank
debt
The Kitakyushu Bank

Subtotal
Total

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

No collateral/
No guarantee(Note 1) The average interest rate is a weighted-average figure during the fiscal period and is rounded to the third decimal place. Furthermore, the average interest rate of debt for which FRC conducted interest
rate swap transactions is the weighted-average figure during the fiscal period taking into consideration the effect of interest rate swaps.
(Note 2) Amount of repayment of long-term debt scheduled to be due within 5 years after period end.

(thousands of yen)

Category
Long-term debt

1 to 2 years
10,400,000

2 to 3 years
2,700,000

3 to 4 years
6,400,000

4 to 5 years
12,500,000

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

FUKUOKA REIT CORPORATION

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