Provisional translation only
October 15, 2021

EARNINGS BRIEFING FOR THE PERIOD ENDED AUGUST 2021
Name of issuer:
Code number:
URL:
Stock listings:

Fukuoka REIT Corporation (FRC)8968
https://www.fukuoka-reit.jp/en/
Tokyo Stock Exchange, and Fukuoka Stock Exchange

Representative:

Etsuo Matsuyuki Executive Director

Asset manager:
Representative:
Contact:

Fukuoka Realty Co., Ltd.
Zenji Koike
President & CEO
Keishi Tamura
General Manager of Planning Dept.
Phone: +81-92-272-3900

Expected date for submitting securities report:
November 29, 2021
Expected commencement date of dividend payments: November 18, 2021
Supplementary documents for earnings briefing
Yes
Analyst meeting (for institutional investors and analysts) Yes(Figures rounded down to nearest mm yen)

1. Performance and situation of assets for the period ended August 2021
(March 1, 2021 to August 31, 2021)(1) Performance
Operating revenues
mm of yen

Period ended

August 2021
Period ended

February 2021

%

2,816

5.3

8,904

4.5

3,061

3.2

2,677

3.5

2,675

3.4

Return on net assets

Ratio of ordinary income Ratio of ordinary income
to total assets
to operating revenues

3,538 yen

2.8%

1.4%

31.8%

3,361 yen

2.6%

1.3%

30.1%

Total
dividend(excl. dividendin excess ofearnings)

Dividendin excess ofearnings
per unit

Total
dividendin excess ofearnings

Dividend
per unit(incl. dividendin excess ofearnings)

Total
dividend(incl. dividendin excess ofearnings)

3,539 yen 2,817 mm yen 100.0%

2.8%

3,361 yen 2,675 mm yen— yen — mm yen

3,361 yen 2,675 mm yen 100.0%

2.6%

August 2021
Period ended

February 2021

Ratio of net assets tototal assets

Net assets per unit

101,755 mm yen

50.9%

127,833 yen

101,614 mm yen

50.9%

127,656 yen

Total assets

Net assets

199,804 mm yen
199,559 mm yen(4) Cash flows condition
Cash flows fromoperating activities

Period ended

February 2021

assets— yen — mm yen

Period ended

August 2021

Ratio of

Payout dividend
to netratio

3,539 yen 2,817 mm yen(3) Financial condition

Period ended%

5.2(excl. dividendin excess ofearnings)

February 2021

mm of yen

2,817

February 2021

Period ended

Profit%4.7

Period ended

August 2021

Ordinary income

mm of yen

3,204

August 2021

Period ended

%

(0.4)

Period ended

Dividend
per unit

mm of yen(% shows percentage change from previous period)

8,867

Profit per unit

(2) Dividends

Operating income

Cash flows frominvesting activities

Cash flows fromfinancing activities

Balance of cash andcash equivalents at
end of period

4,724 mm yen(1,425) mm yen(2,674) mm yen

10,917 mm yen

5,374 mm yen(842) mm yen(2,586) mm yen

10,293 mm yen

Fukuoka REIT Corporation (8968); Earnings Briefing for the Period ended August 2021

2. Forecast of performance for the period ending February 2022 (September 1, 2021 to February 28,2022) and the period ending August 2022 (March 1, 2022 to August 31, 2022)(% shows percentage change from previous period)

Operating revenues Operating income

Period ending

February 2022
Period ending

August 2022

Ordinary income

ProfitDividend
per unit

Dividendin excess ofearnings
per unit

mm of yen%

mm of yen%

mm of yen%

mm of yen(excl. dividend% in excess ofearnings)

8,621

(2.8)

3,156

(1.5)

2,787

(1.1)

2,786

(1.1) 3,500 yen

— yen

8,834

2.5

3,169

0.4

2,787

0.0

2,786

0.0 3,500 yen— yen(Reference) Forecast profit per unit: Period ending February 2022
Forecast profit per unit: Period ending August 2022

3,500 yen
3,500 yen

3. Other(1) Changes in accounting policies, changes in accounting estimates and restatement of accounting errors(i) Changes in accounting policies accompanying amendments to accounting standards, etc.: No(ii) Changes in accounting policies other than above (i):No
(iii) Changes in accounting estimates:No(iv) Restatement of accounting errors:No(2) Number of investment units outstanding(i) Number of investment units outstanding at end of period (including treasury investment units):
As of August 2021
796,000 units
As of February 2021
796,000 units(ii) Treasury investment units at end of period:
As of August 2021
0 unitAs of February 2021
0 unitNote: Regarding the number of investment units, a basis for calculating profit per unit, please refer to “Per unit information,” on page11.

* Statement on Implementation Status of Audit Procedure
This Earnings Briefing (“Kessan Tanshin” in Japanese) report is not subject to audit procedures by public
accountants or audit corporations.
* On the adequate use of performance forecasts and other items warranting special mention
Forecast figures are calculated based on information available on the date of release of the forecast and contain
uncertain factors to a large extent. Actual operating revenues, operating income, ordinary income, profit, anddividend per unit may differ due to changes in the business environment. The forecast should not be construed
as a guarantee of actual dividend. Concerning details of the preconditions for the above forecast figures pleaserefer to “1. Management Situation, (2) Forecast for the next fiscal period – Preconditions for the performance
forecast for the period ending February 2022 (September 1, 2021 to February 28, 2022) and the period ending
August 2022 (March 1, 2022 to August 31, 2022)” on page 3.

Fukuoka REIT Corporation (8968); Earnings Briefing for the Period ended August 2021

1. Management Situation(1) Summary of the current fiscal period(a) Brief history of the investment corporation
Fukuoka REIT Corporation (hereinafter “FRC”) was established on July 2, 2004 based on the “Act on Investment
Trusts and Investment Corporations” (Act No. 198 in 1951 including later revisions) and listed on the Tokyo Stock
Exchange Inc. and the Fukuoka Stock Exchange on June 21, 2005 as the nation’s first real estate investment
trust specializing in regional properties (code number: 8968). FRC invests in real estate throughout all of Kyushu(including Okinawa Prefecture) with a central focus on Fukuoka City and Yamaguchi Prefecture (hereinafter the“Fukuoka/Kyushu area) by turning regional characteristics in the real estate industry into strengths.
FRC started asset management activities on November 9, 2004 after acquisition of four properties comprisingretail properties and an office building, and manages a total of 32 properties comprising 11 Retail, 10 Officebuildings (including land with leasehold interest for an office building) and 11 Others as of the end of the 34th
fiscal period (August 31, 2021).
(b) Investment environment and portfolio performance
During the fiscal period under review (the 34th fiscal period), the Japanese economy continued to show a pickup
trend amid a severe situation still persisting under the impact of the novel coronavirus (COVID-19) infection. As
for the outlook, with measures taken to prevent the spread of infection and vaccination promoted, the economy isexpected to keep picking up due in part to the effects of various political measures and improvements in overseas
economies. Attention should be paid, however, to the impact the infection trend will pose on the economy both inand outside Japan and the influence of changes in the financial and capital markets, etc.
In the Fukuoka and Kyushu area, the core investment target area for FRC, the economy is picking up, centering
around exports and production, although staying in a severe situation. While public spending remains at a highlevel, the pickup trend in consumer spending has come to a temporary pause, and supply-and-demand conditions
for labor and compensation of employees are both on a weak note. As we foresee, we must be wary of the impactof the trend of COVID-19 on corporate and household sentiments, among other factors.
As for land price trends, the national average price in combined average for residential and commercial land
dropped for the second consecutive year, although at a decelerating rate of decrease, according to the 2021 Land
Price Survey. By land type, residential land price dropped at a lower pace and commercial land price showed ahigher rate of decrease. Meanwhile, in Fukuoka City, the central area of FRC’s investment targets, land prices
continued rising for 9 consecutive years, up 7.7% year-on-year for commercial land and up 4.4% year-on-year forresidential land.
Under such circumstances, FRC’s portfolio achieved solid performance in the asset types of office buildings,
logistic facilities, and residential properties. On the other hand, the impact of the spread of COVID-19 was notcontained at Canal City Hakata and other major retail properties, while hotels failed to recover as tourism demand,
etc. did not return strongly.
In the 34th fiscal period, FRC disposed Canal City Hakata· B Grand Building (88.28% co-ownership interest inGrand Building) and acquired Tenjin Nishi-Dori Business Center (Land with leasehold interest) on June 1, 2021,
and concluded on August 30, 2021 an agreement regarding acquisition of Hakata Chikushi-Dori Center Building(scheduled for acquisition on March 1, 2022).
When analyzing FRC’s portfolio (on an acquisition price basis) as of the end of the 34th 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 AssetManager) has established the Sustainability Policy and Regulations Concerning Sustainability Management topromote sustainability through environmental, 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
the targets 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), the Principles for Responsible Investment (PRI) and the Principles for
Financial Action for the 21st Century (PFA21) and other initiatives.
(c) Summary of fundraising
In the 34th fiscal period, FRC conducted long-term borrowings totaling 6,300 mm yen to fund the repayment ofexisting debt that matured in the period. As a result, the balance of FRC's interest-bearing debt outstanding(including investment corporation bonds) at the end of the 34th fiscal period totaled 82,400 mm yen, with the loanto-value ratio (ratio of interest-bearing debt (including investment corporation bonds) to total assets) at 41.2% andthe 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 thecommitment line agreement (credit limit: 6,000 mm yen) with The Bank of Fukuoka, Ltd. serving as the agent,
1

Fukuoka REIT Corporation (8968); Earnings Briefing for the Period ended August 2021

FRC extended the commitment period by a year, lengthening the remaining term of commitment to three years.
Going forward, 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 through other measures.
Moreover, the credit ratings assigned to FRC as of the end of the current 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(d) Summary of performance and dividend
As a result of these management efforts, operating revenues totaled 8,867 mm yen and operating income after
excluding operating expenses such as expenses related to leasing business and asset management fees totaled
3,204 mm yen. Ordinary income was 2,817 mm yen and profit amounted to 2,816 mm yen. Management decided
to make a dividend of 3,539 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.
(2) Forecast for the next fiscal period(a) Portfolio management policy
FRC will further reinforce management and leasing capabilities by cooperating with property managementcompanies including sponsor companies, and secure and maintain the stable operation of the properties bymaking 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 “highgrowth potential markets.” By geographic location, of Fukuoka and Kyushu areas, FRC will invest 60% to 90%
of its assets in the Fukuoka urban area since the Fukuoka urban area is expected to have a high population
growth rate in the future. In addition to the Fukuoka urban area, management has decided to actively acquire
properties in major cities if there are regions or properties where FRC 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 withthe 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 a solid financial structure.
(b)

Significant events that have occurred after the end of the current fiscal period:
No relevant items.

(c)Performance forecast for the next fiscal period
FRC aims to achieve the following performance goals for the period ending February 2022 (September 1, 2021
to February 28, 2022) and the period ending August 2022 (March 1, 2022 to August 31, 2022). Concerning
preconditions for the forecast, please refer to “Preconditions for the performance forecast for the period ending
February 2022 (September 1, 2021 to February 28, 2022) and the period ending August 2022 (March 1, 2022 toAugust 31, 2022)” on page 3.
Period ending February 2022
Period ending August 2022
Operating revenues
8,621 mm yen
8,834 mm yen
Operating income
3,156 mm yen
3,169 mm yen
Ordinary income
2,787 mm yen
2,787 mm yen
Profit2,786 mm yen
2,786 mm yen
Dividend per unit
3,500 yen
3,500 yen
Dividend in excess of earnings per
— yen
— yen
unit
Note:

The above forecast figures are calculated based on certain preconditions. The forecast should not be construed as aguarantee of actual performance since actual operating revenues, operating income, ordinary income, profit, dividend
per unit and dividend in excess of earnings per unit may differ due to changes in the business environment.

2

Fukuoka REIT Corporation (8968); Earnings Briefing for the Period ended August 2021

Preconditions for the performance forecast for the period ending February 2022 (September 1, 2021 to February 28,2022) and the period ending August 2022 (March 1, 2022 to August 31, 2022)
Item
Preconditions
35th fiscal period: September 1, 2021 to February 28, 2022 (181 days)
Calculation period
36th fiscal period: March 1, 2022 to August 31, 2022 (184 days)• It is assumed that there will be 33 properties comprising the 32 properties FRC owns as of August
Assets under31, 2021 plus Hakata Chikushi-Dori Center Building, which FRC plans to acquire on March 1, 2022.
management• In practice, the number may fluctuate due to changes in assets under management.
Total number ofinvestment units• It is assumed that there will be no issuance of new investment units until August 31, 2022.
outstanding• The balance of interest-bearing debt outstanding at the end of the 35th fiscal period (February 28,2022) is expected to total 82,400 mm yen. The loan-to-value ratio (interest-bearing debt / total assets
× 100) is expected to stand at around 41.2% (as of August 31, 2021, the loan-to-value ratio stands
Interest-bearing debt
at 41.2%).
and refinancing• The balance of interest-bearing debt outstanding at the end of the 36th fiscal period (August 31,2022) is expected to total 83,900 mm yen. The loan-to-value ratio (interest-bearing debt / total assets
× 100) is expected to stand at around 41.7%.
• Of leasing revenues – real estate, revenues from properties FRC has already acquired are calculated
based on tenancy agreements that are valid as of October 15, 2021 by taking into account thecompetitiveness of the properties and the market environment, etc.
Of leasing revenues– real estate, revenues from lease contracts with variable rent such as
percentage-of-sales rent and percentage-of-GOP rent are calculated based on past results by taking
into account such fluctuation factors as sales and GOP of the relevant tenants.
• For leasing revenues – real estate, tenant vacancies are taken into account to a certain extent. It is
Operating revenues
assumed that there will be no rent arrears or non-payments by tenants.
• With the impact of the spread of COVID-19 in Japan and abroad prolonging, the situation requires
FRC to anticipate that a certain degree of impact will continue in the 35th and 36th fiscal periods on
its retail properties and hotels for which percentage-of-sales rents, etc. are established. In estimating
the sales, etc. of such properties, FRC assumes that, while domestic tourism will recover gradually,
inbound tourism will not recover until the 36th fiscal period. However, actual sales may fluctuate
depending on when the COVID-19 pandemic is contained.
• When acquiring properties, the property taxes and city planning taxes for the assets will be
proportionally calculated according to the holding period and adjusted with the former owner.
However, the adjusted amount of the property taxes and city planning taxes to be borne by FRC for
the initial year will not be written off since they will be included in the acquisition cost.
• FRC writes off estimated repair costs expected to be required for buildings for the calculation periods(the 35th and 36th fiscal periods). Actual repair costs may differ significantly from the estimatedamounts since there is the possibility that repair costs are incurred urgently due to damages tobuildings caused by unforeseeable factors, repair costs generally differ largely from period to period,
Operating expenses
and repair costs are not regularly incurred.
• Concerning outsourcing expenses, FRC anticipates 1,720 mm yen for the 35th fiscal period and1,764 mm yen for the 36th fiscal period.
• Concerning taxes and other public charges, FRC anticipates 711 mm yen for the 35th fiscal period
and 729 mm yen for the 36th fiscal period.
• Concerning depreciation and amortization expenses, FRC anticipates 1,489 mm yen for the 35th
fiscal period and 1,527 mm yen for the 36th fiscal period.
• Concerning interest expenses (including interest expenses on investment corporation bonds) andNon-operating
expenses related to financing, FRC anticipates 368 mm yen for the 35th fiscal period and 379 mm
expenses
yen for the 36th fiscal period.
• Dividend (dividend per unit) is calculated based on the dividend policy stipulated in FRC’s Articles ofIncorporation.
• Dividend per unit may fluctuate due to fluctuations in leasing revenues caused by changes in assets
Dividend per unit
under management and tenants or various factors including unexpected occurrences of repair.
• Dividend per unit may fluctuate depending on when the spread of COVID-19 will actually becontained.
Dividend in excess• Dividend in excess of earnings (dividend in excess of earnings per unit) is not planned at the moment.
of earnings per unit
• It is assumed that there will be no significant revisions to laws and regulations, the tax system, andaccounting standards that may influence the forecast figures.
Other• It is also assumed that there will be no significant unexpected changes in general economic
conditions and the real estate market.

3

Fukuoka REIT Corporation (8968); Earnings Briefing for the Period ended August 2021

2. Financial Statements(1) Balance sheet
Account
AssetsCurrent assets
Cash and deposits
Cash and deposits in trust
Operating accounts receivable
Prepaid expenses
OthersTotal current assets
Non-current assets
Property, plant and equipment
Buildings
Accumulated depreciation
Structures
Accumulated depreciation
Tools and fixtures
Accumulated depreciation
Lands
Buildings in trust
Accumulated depreciation
Structures in trust
Accumulated depreciation
Machinery and equipment in trust
Accumulated depreciation
Vehicles and transport equipment in trust

Accumulated depreciation
Tools and fixtures in trust
Accumulated depreciation
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(thousands of yen)

33rd fiscal period

34th fiscal period(as of February 28, 2021)(as of August 31, 2021)

6,596,412
3,742,580
528,707287,185
3,007
11,157,893

1,166,235(9,712)
20,698
(129)
1,571
(78)
104,526,979(34,998,550)
2,049,545(848,800)
1,509,292(639,038)
747(709)
1,393,755(1,210,954)

1,156,522
20,5691,492
989,124
69,528,428
1,200,744
870,25437
182,801
107,452,281
16,791
181,419,047
5,545,883
24,044
5,569,927

Investment and other assets
Deferred tax assets
Lease and guarantee deposits
Lease and guarantee deposits in trust

6,948,985
4,015,688
593,014272,674
2,891
11,833,253

1,167,104(24,360)
20,698
(322)
1,571
(195)
101,200,889(35,296,331)
1,933,215(856,694)
1,459,851(668,138)
626(594)
1,428,616(1,201,413)

1,142,744
20,376
1,375
989,124
65,904,558
1,076,521
791,71331
227,203110,373,363
480,002
181,007,013
5,545,883
15,584
5,561,467

63

13

10,00010,000327,135

327,135

Long-term prepaid expenses

1,042,944

1,036,131

Total investment and other assets

1,380,143

1,373,280

188,369,118

187,941,761

32,04029,93832,04029,938

199,559,052

199,804,953

Total non-current assets
Deferred assets
Investment corporation bond issuance
expenses
Total deferred assets
Total assets

4

Fukuoka REIT Corporation (8968); Earnings Briefing for the Period ended August 2021
(thousands of yen)Account

33rd fiscal period(as of February 28, 2021)

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

Liabilities
Current liabilities
Operating accounts payable

561,673452,735

6,300,000

6,000,000

Accounts payable-other

22,905

17,146

Accrued expenses

415,653

420,218

1,835

944

316,581705,556

Advances received

1,088,923

1,057,228

Deposits received

793,952

912,833

9,501,526

9,566,664

Investment corporation bonds

5,000,000

5,000,000

Long-term debt

71,100,000

71,400,000

450,791

450,811

11,892,365

11,631,661

88,443,156

88,482,473

97,944,683

98,049,137

98,938,764

98,938,764

Unappropriated surplus

2,675,604

2,817,051

Total surplus

2,675,604

2,817,051

101,614,369

101,755,815

101,614,369

101,755,815

199,559,052

199,804,953

Current maturities of long-term debt

Income taxes payable
Accrued consumption taxes

Total current liabilities
Non-current liabilities

Tenant leasehold and security deposits
Tenant leasehold and security deposits
received in trust
Total non-current liabilities
Total liabilities
Net assets
Unitholders’ equity
Unitholders’ capital
Surplus

Total unitholders’ equity
Total net assets
Total liabilities and net assets

5

Fukuoka REIT Corporation (8968); Earnings Briefing for the Period ended August 2021

(2) Statement of income(thousands of yen)

33rd fiscal period

Account

34th fiscal period(September 1, 2020 toFebruary 28, 2021)(March 1, 2021 toAugust 31, 2021)

Operating revenues
Leasing revenues – real estate
Other leasing revenues – real estate*1*18,306,678*1

597,438

Gain on sales of real estate—

8,904,117

8,157,755*1

605,165*2

104,2548,867,174

Operating expenses
Expenses related to leasing business
Asset management fees

*1, *3

5,180,315*1, *3

4,978,758

524,777

531,986

Asset custody fees

7,401

7,544

Administrative service fees

58,66558,810

Director’s compensations

9,600

9,600

Other operating expenses

61,374

Operating income

5,842,134

75,7803,061,982

5,662,481
3,204,693

Non-operating revenues
Interest received

47

Others

1,357

54
1,404

504

559

Non-operating expenses
Interest expenses
Interest expenses on investment
corporation bonds
Amortization of investment
corporation bond issuance expenses
Amortization of investment unit
issuance expenses
Financing related expenses

253,182

257,612

29,20029,200

2,102

2,102

3,835

—

97,66398,492Others37386,02139

387,447

Ordinary income

2,677,366

2,817,806

Profit before income taxes

2,677,366

2,817,806

Income taxes-current

1,842

Income taxes-deferred(49)

Profit

952
1,793

50

1,003

2,675,572

2,816,802Surplus brought forward

31

248

Unappropriated surplus

2,675,604

2,817,051

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Fukuoka REIT Corporation (8968); Earnings Briefing for the Period ended August 2021

(3) Statement of changes in net assets
33rd fiscal period (September 1, 2020 to February 28, 2021)

Item
Balance as of
September 1, 2020
Changes in thecurrent fiscal period

Unitholders’ Equity
Surplus
Unitholders’ capital

Unappropriated surplus

Totalunitholders’ equity

Total
net assets

2,587,031

101,525,796

101,525,796

Dividend of surplus(2,587,000)(2,587,000)(2,587,000)

Profit2,675,572

2,675,572

2,675,572—

88,572

88,572

88,572

98,938,764

2,675,604

101,614,369

101,614,369

Total of changes in thecurrent fiscal period
Balance as ofFebruary 28, 2021

98,938,764(thousands of yen)

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

Item
Balance as ofMarch 1, 2021
Changes in thecurrent fiscal period

Unitholders’ Equity
Surplus
Unitholders’ capital

Unappropriated surplus

Totalunitholders’ 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—

141,446

141,446

141,446

98,938,764

2,817,051

101,755,815

101,755,815

Total of changes in thecurrent fiscal period
Balance as ofAugust 31, 2021

98,938,764(thousands of yen)

7

Fukuoka REIT Corporation (8968); Earnings Briefing for the Period ended August 2021

(4) Dividend statement
Account

33rd fiscal period(September 1, 2020 toFebruary 28, 2021)

34th fiscal period(March 1, 2021 toAugust 31, 2021)

I.

Unappropriated surplus

2,675,604 thousand yen

2,817,051 thousand yen

II.

Total

2,675,356 thousand yen

2,817,044 thousand yen[Dividend per investment
unit][3,361 yen]

[3,539 yen]

III. Surplus brought forward

248 thousand yen

7 thousand yen

Method for calculating dividends

The amount of dividends shall be decided in The amount of dividends shall be decided inaccordance with the dividend policy accordance with the dividend policy
stipulated in Article 38-1-2 of FRC’s Articles stipulated in Article 38-1-2 of FRC’s Articles
of Incorporation and must exceed 90% of of Incorporation and must exceed 90% of
FRC’s distributable profits as stipulated in FRC’s distributable profits as stipulated in
Article 67-15-1 of the Special Taxation Article 67-15-1 of the Special Taxation
Measures Act. Following the above policy, Measures Act. Following the above policy,
FRC shall decide to distribute 2,675,356 FRC shall decide to distribute 2,817,044
thousand yen, which is almost the entire thousand yen, which is almost the entire
amount of unappropriated surplus, as amount of unappropriated surplus, asearnings dividends. Moreover, dividend in earnings dividends. Moreover, dividend inexcess of earnings as stipulated in Article excess of earnings as stipulated in Article38-2 of FRC’s Articles of Incorporation will 38-2 of FRC’s Articles of Incorporation will
not be provided.
not be provided.

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

8

Fukuoka REIT Corporation (8968); Earnings Briefing for the Period ended August 2021

(5) Cash flows statement(thousands of yen)

33rd fiscal period

Account(September 1, 2020 toFebruary 28, 2021)

Net cash provided by (used in) operating activities
Profit before income taxes
Depreciation and amortization expenses
Amortization of investment corporation bond issuance
expenses
Amortization of investment unit issuance expenses
Interest received
Interest expenses
Gain on sales of real estate
Decrease (increase) in operating accounts receivables
Decrease (increase) in consumption taxes refund receivable
Increase (decrease) in accrued consumption taxes
Increase (decrease) in operating accounts payable
Increase (decrease) in accounts payable-other
Increase (decrease) in accrued expenses
Increase (decrease) in advances received
Increase (decrease) in deposits expenses
Decrease (increase) in prepaid expenses
Decrease (increase) in long-term prepaid expenses
Others, net
SubtotalInterest income received
Interest expenses paid
Income taxes paid
Net cash provided by (used in) operating activities
Net cash provided by (used in) investment activities
Purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment in trust
Purchase of property, plant and equipment in trust
Proceeds from tenant leasehold and security deposits
Repayments of tenant leasehold and security deposits
Proceeds from tenant leasehold and security deposits in trust
Repayments of tenant leasehold and security deposits in trust
Proceeds from restricted trust deposits
Payments for restricted trust deposits
Net cash provided by (used in) investment activities
Net cash provided by (used in) financial activities
Proceeds from long-term debt
Repayments of long-term debt
Dividends paid
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

934th fiscal period(March 1, 2021 toAugust 31, 2021)

2,677,366
1,623,716

2,817,806
1,552,759

2,102

2,102

3,835
(47)
282,382—
515,217
177,613
316,581
25,185
10,28760,503(34,635)(100,119)(4,468)95,407
6,766
5,657,694
47(282,607)(974)
5,374,159—(54)
286,812(104,254)(64,306)—
388,975
19,627(6,134)
3,749(31,695)
118,880
14,511
6,812
6,897
5,012,488
54(285,996)(1,844)
4,724,702(355,262)—(479,144)
84,136—
122,888(214,907)
2,016(2,470)(842,743)(400)
7,608,310(8,771,773)
80(60)
460,486(721,189)
3,283(4,575)(1,425,837)——(2,586,536)(2,586,536)
1,944,879
8,348,438
10,293,317

6,300,000(6,300,000)(2,674,475)(2,674,475)
624,389
10,293,317
10,917,706

Fukuoka REIT Corporation (8968); Earnings Briefing for the Period ended August 2021

(6) Notes on the going concern assumption
No relevant items.
(7) Significant accounting policies
The disclosure is omitted, since there are no significant changes from contents disclosed by the latest securities report(submitted on May 31, 2021).
(8) Notes to financial statements
FRC omits the disclosure of notes to balance sheet, statement of changes in net assets, and cash flows statement,
as well as notes on lease transactions, financial instruments, securities, derivative transactions, related-party
transactions, tax-effect accounting, retirement benefits, asset retirement obligations, rental properties, segment
information and equity method income, etc. since it does not find substantial need for disclosure in the earnings briefing.
(Notes to statement of income)*1. Breakdown of revenues and expenses related to real estate leasing business(thousands of yen)

33rd fiscal period(September 1, 2020 toFebruary 28, 2021)

34th fiscal period(March 1, 2021 toAugust 31, 2021)

A. Real estate leasing business revenues
Leasing revenues – real estate
Rents

6,830,181

6,755,878

Common charges

1,075,140

1,007,813

Parking revenues

401,356

8,306,678

394,063

8,157,755

Other leasing revenues – real estate
Incidental income

552,811

Other miscellaneous income

44,627

Total real estate leasing business revenues

581,258
597,438

23,906

8,904,117

605,165
8,762,920

B. Expenses related to real estate leasing business
Expenses related to leasing businessOutsourcing fees

1,870,563

1,775,633

Repair and maintenance expenses

211,326

153,469

Taxes and other public charges

743,094

723,140

Insurance premiums and trust compensation

45,88044,998

Utilities expenses

452,048477,384

1,623,716

1,552,759

Depreciation and amortization expenses
Other expenses related to real estate leasing
business
Total expenses related to real estateleasing business
C. Revenues and expenses related to real estateleasing business (A - B)

233,685

5,180,315

4,978,758

3,723,801

3,784,162

33rd fiscal period (September 1, 2020 to February 28, 2021)
Not applicable.
34th fiscal period (March 1, 2021 to August 31, 2021)
Canal City Hakata· B Grand Building (88.28% co-ownership interest in Grand Building)(thousands of yen)

7,700,000
7,504,056
91,689104,25410

4,978,758

5,180,315*2. Breakdown of gain on sales of real estate

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

251,371

Fukuoka REIT Corporation (8968); Earnings Briefing for the Period ended August 2021

*3. Transactions with affiliated companies(thousands of yen)
(September 1, 2020 toFebruary 28, 2021)

Expenses related to real estate leasing business(March 1, 2021 toAugust 31, 2021)

966,563(Per unit information)
33rd fiscal period

853,139

34th fiscal period(September 1, 2020 to February 28, 2021)

Net assets per investment unit:
Profit per investment unit:

34th fiscal period

33rd fiscal period

Item(March 1, 2021 to August 31, 2021)

127,656 yen
3,361 yen

Net assets per investment unit:
Profit per investment unit:

127,833 yen
3,538 yen

Note 1: Profit per investment unit is calculated by dividing profit by the day-weighted average number of investment units
outstanding during the fiscal period. Diluted profit per investment unit is not shown since there are no potential
investment units.
Note 2: Calculation of profit per investment unit is based on the following.

34th fiscal period

33rd fiscal period

Account(September 1, 2020 toFebruary 28, 2021)

Profit (thousands of yen)Amount not attributable to common unitholders(thousands of yen)
Profit attributable to common investment units(thousands of yen)
Average number of investment units during the fiscal
period (units)(Significant subsequent events)
No relevant items.
(9) Change in the number of investment units outstanding
No relevant items.

11(March 1, 2021 toAugust 31, 2021)

2,675,572

2,816,802——

2,675,572

2,816,802

796,000

796,000

Fukuoka REIT Corporation (8968); Earnings Briefing for the Period ended August 2021

3. Reference Information(1) Information on the prices, etc. of investment assets
1) Investment situation
Type ofasset

Office buildings

Real estate

OthersTotal value of
properties owned

Location

Use

Retail(as of August 31, 2021)(Note 1)(mm of yen) (Note 2)

Office buildings

Real estatein trust

Others(%) (Note 3)

Fukuoka urban area——

Other Kyushu areas——

Fukuoka urban area——

Other Kyushu areas——

Fukuoka urban area——

Other Kyushu areas

2,153

1.1

2,153

1.1

Fukuoka urban area

66,68033.4

Other Kyushu areas

36,612

18.3

Fukuoka urban area

55,418

27.7

Other Kyushu areas——

Fukuoka urban area

19,898

10.0

Other Kyushu areas

5,324

2.7

183,934

92.1

13,716

6.9

199,804

100.0[186,568][93.4]

Subtotal
RetailPercentage of
total assets

Subtotal
Deposits and other assets
Total amount of assets (Note 4)

Note 1: “Fukuoka urban area” refers to cities, towns and villages where 10% or more of the population commute to Fukuoka City
for school and work, according to the 2015 census, which states “the number of workers and students aged 15 years orolder (students including those aged 14 years or younger: particular reference) including commuting between their homes
and places of work or school” conducted by Fukuoka City and the Statistics Bureau of the Ministry of Internal Affairs andCommunications. “Other Kyushu areas” refers to all other parts of Kyushu (excluding the Fukuoka urban area).
Note 2: “Total value of properties owned” is based on the value on the balance sheet (the value of real estate and real estate intrust 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 parentheses for “Total amount of assets” refer to the value and percentage of real estate owned in effect tothe total amount of assets.
(as of August 31, 2021)

Value on balance sheet(mm of yen)

Percentage of total amount of assets(%)

Total liabilities

98,04949.1

Total net assets

101,755

50.9

12

Fukuoka REIT Corporation (8968); Earnings Briefing for the Period ended August 2021

2) Investment assets(A) Values and investment ratios at end of period are as follows.
Real estate property nameAcquisitionvalue(mm of yen)
(Note 1)

Value onbalance sheet(mm of yen)

Period-end
appraisal value(mm of yen)
(Note 2)

Canal City Hakata

32,00029,47630,600Canal City Hakata･B (Note 4)

21,06020,997

21,400Park Place Oita

19,61020,112

21,200SunLive City Kokura

6,633

5,393

8,440

Konoha Mall Hashimoto

10,0009,848

10,500

Square Mall Kagoshima Usuki

5,300

4,258

4,960

Kumamoto Intercommunity SC

2,400

1,943

2,740

Hanahata SC

1,130

961

1,200

Kurume Higashi Kushiwara SC

2,500

1,995

2,740

K’s Denki Kagoshima

3,550

2,907

3,660

Marinoa City Fukuoka (Marina
Side Building)Retail subtotal:
Canal City Business Center
Building

5,250

5,395

5,900

109,433

103,293

113,340

14,60012,846

17,400Gofukumachi Business Center

11,2008,767

15,600Sanix Hakata Building

4,400

3,744

6,510

Taihaku Street Business Center

7,000

5,632

9,190

Higashi Hie Business Center

5,900

4,364

8,270

Tenjin Nishi-Dori Center Building

2,600

2,653

3,140

Tenjin North Front Building

2,800

2,414

4,490

Higashi Hie Business Center II

4,230

3,982

4,690

Higashi Hie Business Center III

3,290

3,256

3,380

Tenjin Nishi-Dori Business Center(Land with leasehold interest)
Office buildings subtotal:

7,700

7,754

7,790

63,72055,41880,460Amex Akasakamon Tower

2,060

1,635

1,880

City House Keyaki Dori

1,111

882

1,040

Aqualia Chihaya

1,280

1,146

1,950

D-Wing Tower

2,800

2,635

3,660

Granfore Yakuin Minami

1,100

1,079

1,330

Hotel FORZA Oita

1,530

1,360

1,890

Tissage Hotel Naha

2,835

2,810

2,880

Tosu Logistics Center

1,250

1,153

1,360

LOGICITY Minato Kashii

8,150

7,755

9,210

LOGICITY Hisayama

5,050

4,762

5,450

LOGICITY Wakamiya

1,700

2,153

2,400

Others subtotal:
Total

28,866
202,019

27,376
186,088

33,050226,850

Note 1:
Note 2:

Investment
ratio
(%)
(Note 3)(as of August 31, 2021)

Real estateappraiser

Tanizawa Sogo
15.8 Appraisal Co., Ltd.
Tanizawa Sogo
10.4 Appraisal Co., Ltd.
Japan Real Estate
9.7 InstituteJapan Real Estate
3.3 InstituteTanizawa Sogo
5.0 Appraisal Co., Ltd.
Japan Real Estate
2.6 InstituteJapan Real Estate
1.2 InstituteTanizawa Sogo
0.6 Appraisal Co., Ltd.
Tanizawa Sogo
1.2 Appraisal Co., Ltd.
Tanizawa Sogo
1.8 Appraisal Co., Ltd.

Tanizawa Sogo
2.6 Appraisal Co., Ltd.

54.2

Tanizawa Sogo
7.2 Appraisal Co., Ltd.
Tanizawa Sogo
5.5 Appraisal Co., Ltd.
Japan Real Estate
2.2 InstituteJapan Real Estate
3.5 InstituteTanizawa Sogo
2.9 Appraisal Co., Ltd.
Japan Real Estate
1.3 InstituteJapan Real Estate
1.4 InstituteTanizawa Sogo
2.1 Appraisal Co., Ltd.
Tanizawa Sogo
1.6 Appraisal Co., Ltd.
Japan Real Estate
3.8 Institute

31.5

Daiwa Real Estate
1.0 Appraisal Co., Ltd.
Daiwa Real Estate
0.5 Appraisal Co., Ltd.
Japan Real Estate
0.6 InstituteTanizawa Sogo
1.4 Appraisal Co., Ltd.
Tanizawa Sogo
0.5 Appraisal Co., Ltd.
Japan Real Estate
0.8 InstituteTanizawa Sogo
1.4 Appraisal Co., Ltd.
Japan Real Estate
0.6 InstituteTanizawa Sogo
4.0 Appraisal Co., Ltd.
Tanizawa Sogo
2.5 Appraisal Co., Ltd.
Tanizawa Sogo
0.8 Appraisal Co., Ltd.

14.3
100.0

“Acquisition value” refers to the amount (purchasing prices shown on the purchasing contracts) not including expenses forthe acquisition of relevant properties (agency fees and taxes and other public charges).
“Period-end appraisal value” refers to the evaluation value based on appraisals by a real estate appraiser in conformity with13

Fukuoka REIT Corporation (8968); Earnings Briefing for the Period ended August 2021

Note 3:Note 4:the method and standards for asset evaluation stipulated in FRC’s Articles of Incorporation and rules stipulated by theInvestment Trusts Association, Japan.
“Investment ratio” is obtained by dividing each property’s acquisition value by the total acquisition value. The total ofindividual percentages in the above table may not equal 100%, since the figures are rounded off to one decimal place.
The amounts after the disposition of Canal City Hakata·B Grand Building (88.28% co-ownership interest in Grand Building)are indicated. As for the acquisition value, the appraisal value at the time of disposition is subtracted from the initialacquisition value.

(B) Summary of the real estate leasing business(as of August 31, 2021)

45,589.93

Total
leasingrevenues(mm of yen)
(Note 4)996

Percentage
of totalleasingrevenues(%) (Note 5)
11.4

31,139.07

30,538.60

1,166

13.3

121,212.26

121,131.26

1,183

13.5

61,450.22

61,450.22

262

3.0

Number oftenants(Note 1)

Occupancy
rate(%)(Note 3)Total
leasable floor
space
(m2)

Total
leased floor
space
(m2)

1 [46]

97.9

46,585.57

Canal City Hakata･B (Note 6)

1 [45]

98.1

Park Place Oita

1 [104]

99.9

1

100.0

Real estate property name
Canal City Hakata

SunLive City Kokura
Konoha Mall Hashimoto

1 [124]

98.7

22,121.05

21,838.30

778

8.9

Square Mall Kagoshima Usuki

13

100.0

14,602.88

14,602.88

253

2.9

Kumamoto Intercommunity SC

2

100.0

6,968.66

6,968.66

89

1.0

Hanahata SC

2

100.0

2,801.15

2,801.15

40

0.5

Kurume Higashi Kushiwara SC

1

100.0

6,467.80

6,467.80

88

1.0

K’s Denki Kagoshima
Marinoa City Fukuoka (Marina
Side Building)

1

100.0

7,296.17

7,296.17

111

1.3

Retail subtotal:
Canal City Business Center
Building
Gofukumachi Business Center
Sanix Hakata Building

1

100.0

33,069.82

33,069.82

177

2.0

25 [340](Note 2)

99.4

353,714.65

351,754.79

5,147

58.7

1 [62]

100.0

23,030.30

23,030.30

650

7.4

36

100.0

19,905.34

19,905.34

571

6.5

16

100.0

6,293.75

6,293.75

205

2.3

Taihaku Street Business Center1 [69]

99.2

14,677.30

14,566.29

322

3.7

Higashi Hie Business Center1 [27]

100.0

13,614.59

13,614.59

353

4.0

Tenjin Nishi-Dori Center Building

1

100.0

3,339.32

3,339.32

86

1.0

Tenjin North Front Building

11

100.0

5,252.41

5,252.41

146

1.7

Higashi Hie Business Center II

2

100.0

6,214.77

6,214.77

164

1.9

Higashi Hie Business Center III
Tenjin Nishi-Dori Business Center(Land with leasehold interest)(Note 7)6

100.0

2,981.14

2,981.14

95

1.1

1

100.0

1,343.51

1,343.51

79

0.9

99.9

96,652.43

96,541.42

2,675

30.5

Amex Akasakamon Tower

76 [231](Note 2)
1 [64]

95.4

4,821.25

4,597.83

66

0.8City House Keyaki Dori

1 [40]

95.6

2,710.86

2,591.32

37

0.4

Aqualia Chihaya

1 [101]

96.5

5,619.69

5,420.29

60

0.7

D-Wing Tower

1 [130]94.4

7,187.59

6,782.40

112

1.3

Granfore Yakuin Minami

Office buildings subtotal:

1 [97]

98.0

2,496.06

2,446.14

39

0.4

Hotel FORZA Oita

1

100.0

5,785.44

5,785.44

63

0.7

Tissage Hotel Naha

1

100.0

3,758.76

3,758.76

Tosu Logistics Center

1

100.0

4,173.29

4,173.29

LOGICITY Minato Kashii

2

100.0

43,233.72

43,233.72

LOGICITY Hisayama

1

100.0

24,505.65

24,505.65

LOGICITY Wakamiya

1

100.0

17,556.32

17,556.32

43
Undisclosed(Note 8)
Undisclosed(Note 8)
Undisclosed(Note 8)
Undisclosed(Note 8)0.5
Undisclosed(Note 8)
Undisclosed(Note 8)
Undisclosed(Note 8)
Undisclosed(Note 8)99.2

121,848.63

120,851.16

939

10.7

99.5

572,215.71

569,147.37

8,762

100.0

Others subtotal:
Total
Note 1:

12 [439](Note 2)
113 [1,010](Note 2)

“Number of tenants” is based on the total number of sections stipulated in the tenancy agreements for retail and office14

Fukuoka REIT Corporation (8968); Earnings Briefing for the Period ended August 2021

Note 2:
Note 3:Note 4:Note 5:Note 6:Note 7:Note 8:buildings among relevant properties. For the number of tenants in pass-through master leasing properties, the number ofsections stipulated in the tenancy agreements with end tenants is shown in parentheses. The Taihaku Street BusinessCenter is an office building with a residential tower. Its number of end tenants comprises 12 offices and 57 residences.
The subtotal and total of all the tenants in other than pass-through master leasing properties and the number of sections
stipulated in the tenancy agreements with end tenants for pass-through master leasing properties is shown in parentheses
in the totals column for “Number of tenants.”“Occupancy rate” refers to the percentage of total leased floor space to total leasable floor space and the figures are rounded
off to one decimal place.
“Total leasing revenues” is the total of real estate leasing revenues and other revenues from real estate rent in the current
fiscal period.
“Percentage of total leasing revenues” is obtained by dividing each property’s total leasing revenues by the total amount of
total leasing revenues. The total of individual percentages in the above table may not equal 100%, since the figures arerounded off to one decimal place.
FRC disposed Canal City Hakata·B Grand Building (88.28% co-ownership interest in Grand Building) on June 1, 2021.
The number of tenants indicates the number of the lessee of the land with leasehold interest. The total leasable floor spaceindicates the land area recorded in the real estate registry.
The figures are not disclosed as no consent to disclosure has been obtained from the tenants.

(2) Status of capital expenditures
1) Capital expenditures after the end of the 34th fiscal period and planned capital expenditures
The following table provides amounts of major items of capital expenditures associated with renovations, etc.
conducted after the end of the 34th fiscal period and of capital expenditures associated with renovations, etc.
planned as of October 15, 2021 for real estate properties owned by FRC. The planned construction costs indicatedbelow may be partly classified as expenses. In addition, FRC will implement renewal construction work in order tomaintain and improve the competitiveness of properties in the market as well as tenant satisfaction, on top of theconstruction, facilities and replacement work for which expenditures will be made regularly.
Real estate
property nameLocation

PurposePlanned construction cost
(mm of yen)
ConstAmountTotal
ruction cost already paid

Schedule

Canal City
HakataHakata Ward,
Fukuoka City

Replacement of
pipingFrom August 2021 toApril 2022

597

—

—

Park Place Oita

Oita City, Oita

Renovation ofcommon spaces

From September
2021 to April 2022

650

25

27

Park Place Oita

Oita City, Oita

Replacement of airconditioning units

From March 2022 toApril 2022

126

—

—

SunLive City
KokuraKokura Minami
Ward, Kitakyushu
City

Renovation ofcommon spaces

From June 2021 toSeptember 2021

189

4

4

2) Capital expenditures during the 34th fiscal period
Capital expenditures for the real estate properties owned by FRC totaled 445 mm yen in the 34th period.
Furthermore, FRC incurred construction costs of 611 mm yen in total in the period, including 153 mm yen in repair
and maintenance expenses classified as expenses on the statement of income and 12 mm yen in expenses forrestoration to former state. The following table provides the overview of major construction work that was completed
in the 34th fiscal period.
Real estate
property nameLocation

Canal City Hakata

Hakata Ward,
Fukuoka City

Water supply piping for
guestrooms

From October 2020 toApril 2021

22

Canal City Hakata

Hakata Ward,
Fukuoka City

Repair of facilities

From July 2017 to July
2021

57

Gofukumachi
Business Center

Hakata Ward,
Fukuoka City

Replacement of airconditioning units

From July 2021 toAugust 2021

35

Sanix Hakata
Building

Hakata Ward,
Fukuoka City

Replacement of airconditioning units

From March 2021 to April
2021

16

Hotel FORZA Oita

Oita City, Oita

Replacement of airconditioning units

April 2021

18

Purpose15

PeriodConstruction cost
(mm of yen)