March 18, 2021

Provisional translation only

Fukuoka REIT Corporation
1-2-25 Sumiyoshi, Hakata Ward, Fukuoka City
Etsuo Matsuyuki
Executive Director(Securities Code: 8968)
Asset Management Company:
Fukuoka Realty Co., Ltd.
1-2-25 Sumiyoshi, Hakata Ward, Fukuoka City
Etsuo Matsuyuki
CEO & Representative Director
Inquiries:
Keishi Tamura
General Manager of Finance Department
TEL: +81-(0)92-272-3900
Fukuoka REIT Corporation Concludes Agreement to Purchase and Lease a New Property
Fukuoka REIT Corporation (FRC) announces that Fukuoka Realty Co., Ltd., an asset management company towhich the company entrusts the management of its assets, decided to acquire and lease the following domestic
real estate today.
1. Summary of Acquisition
Property name

Use

Location

Acquisition
Price (planned)

Acquisition Date(scheduled)

Tenjin Nishi-Dori BusinessCenter (Land withleasehold interest)

Office2-Chome, Tenjin,
Chuo Ward, Fukuoka City

7,700 mm yen

June 1, 2021

2. Reason for Acquisition
FRC invests primarily in retail facilities with excellent design and entertainment qualities and Class A officebuildings, focusing on the Fukuoka and Kyushu region. Other than retail facilities and office buildings, FRC
also works to acquire properties which, by capitalizing on its community-based strengths to establish
appropriate management structures for each property and through other measures, will allow it to securestable earnings over medium- to long-term periods. By incorporating such properties into its portfolio, FRC
intends to pursue risk diversification within the region.
Tenjin Nishi-Dori Business Center (land with leasehold interest) (the “Property”), to be acquired this time, islocated a 1-minute walk from Tenjin Station on the Fukuoka City Subway Kuko Line. In addition, it islocated in the Tenjin 2-chome south block (along Meiji-dori Avenue) which is within the Tenjin Big Bang
(Note) area that has been promoted by Fukuoka City, and going forward, redevelopment using the incentivesof the Tenjin Big Bang Bonus is expected.
The property is land with leasehold interest. Based on the type of agreement employed for the land leaseagreement, stable rental income can be obtained from our sponsor, Fukuoka Jisho Co., Ltd., the lessee, during
the redevelopment of the existing building on the property and for the period until either the end of February
or the end of August, whichever comes first after nine months elapse following the completion of theredevelopment (the date certification of inspection is obtained). Once that period has elapsed, rental income
in line with market fluctuations will be obtained.
Tenants to lease the Property are judged to comply with tenant selection criteria described in the “Report on- 1 -the Management Structure and System of the Issuer of Real Estate Investment Trust Units and Related
Parties” submitted on November 30, 2020.
This acquisition utilizes a pipeline with the sponsor, Fukuoka Jisho Co., Ltd., and FRC anticipates that theacquisition of the Property will contribute to further enhancing its portfolio and securing stable earnings into
the future.
(Note) Tenjin Big Bang is a project that aims to significantly improve urban functions and increase floor space in the Tenjin
area of Fukuoka City by taking advantage of "special approval to relax height restrictions under the Civil Aeronautics Act,"
which was obtained following its designation as a "National Strategic Special Zone for Global Startups & Job Creation," aswell as "relaxation of floor area ratio," a measure unique to Fukuoka City that aims to promote urban development.
Launched in February 2015, the project targets an area of approximately 80 hectares that is within a radius of approximately
500 meters starting from "Tenjin Intersection" and has induced rebuilding of 30 privately owned buildings over 10 years.
Furthermore, in order to promote installment of functions combatting infectious diseases, the completion deadline of subject
buildings has been extended for another two years from the end of 2024 to the end of 2026, and for those scheduled to becompleted by the end of December 2026, a system to relax the floor area ratio by 50% at maximum (Tenjin Big Bang Bonus)
has been established.

3. Detail of Property for Acquisition(1) Overview of Acquisition
1) Property to be acquired:
2) Property name:Real estate trust beneficiary interest (Trustee: Undecide) (Note1)
Tenjin Nishi-Dori Business Center（Land with leaseholdinterest）
3) Acquisition price (planned) (Note2): 7,700 million yen
4) Appraisal value:
7,790 million yen (as of February 1, 2021)
5) Acquisition cap rate (Note3):
3.5%6) Acquisition date (scheduled):
June 1, 2021
7) Seller:
Fukuoka Jisho Co., Ltd.
8) Funding (Note4):
Proceeds from a sale of an asset and cash on hand
9) Payment method:
Lump-sum payment upon delivery10) Others:
The transaction agreement for the property (the “Transaction
Agreement”) falls under the category of forward commitment,
etc. (a postdated transaction agreement where the settlementand delivery are to take place one month or more after theconclusion of agreement as well as other similar agreements;
the same hereinafter). For details concerning penalties, etc.,
please see 3. (3) Overview of the Property to be acquired"Special notations" column below.
(Note1) The trustee is yet to be determined at this point in time and will be announced once determined.
(Note2) The acquisition price (planned) does not include acquisition expenses, amounts equivalent to the settlementof property taxes and city planning taxes, consumption taxes on the building and other expenses.
(Note3) The acquisition CAP is calculated by the direct capitalization method: NCF/ The acquisition price (planned)
x 100 (%) of the appraisal assessment.
(Note4) For details, please refer to “Fukuoka REIT Corporation Concludes Agreement to Dispose Asset andTerminate Lease Agreement” announced today.

(2) Points Valued in Deciding on the Property
The Property is located in the Tenjin area boasting the largest urban concentration in Kyushu and exhibits
an extremely high level of competitiveness in terms of location, as it is located along Meiji-dori Avenue
where the highest level of maturity among office districts in the area is seen, and near Tenjin Nishi-dori- 2 -Avenue where retail facilities concentrate. Meiji-dori Avenue runs east-west through the Tenjin area, andthere are many financial institutions located along the street including headquarters of local financial
institutions, branches of major banks, branches of securities firms and the Fukuoka Stock Exchange, as
well as retail facilities. “Tenjin Business Center, which is being developed by Fukuoka Jisho Co., Ltd., isalso located along Meiji-dori Avenue. There are also many retail facilities in the Tenjin Nishi-dori Avenue
area, with department stores and specialty stores concentrated on the east side, and offices occupied by
venture firms as well as professional schools on the west side. In addition, the Property is highly valued
for its excellent visibility and high pedestrian traffic because it is located at the intersection of Meiji-doriAvenue and Tenjin Nishi-dori Avenue.
In the Tenjin 2-chome south block (along Meiji-dori Avenue) inside the Tenjin Big Bang area where theProperty is located, the maximum floor space ratio is 1,300%, which is obtained by adding a maximumof 400% attributable to urban development initiatives to the baseline of 900%. According to the district
plan decided by Fukuoka City, a barrier-free, underground pedestrian walkway from Tenjin subway
station to Tenjin Nishi-dori is to be constructed, a plaza connected to the Tenjin subway station and theunderground pedestrian walkway, as well as entrances and exits from the underground area to the aboveground area are to be secured, and a pedestrian walkway connecting Meiji-dori Avenue and City Road
Tenjin 23 is to be constructed in order to improve pedestrian mobility and strengthen north-south
connectivity with Meiji-dori Avenue. In addition to the redevelopment of this area, the Former Daimyo
Elementary School Site Redevelopment Project is underway in the neighborhood, and the completion ofthis project is expected to further raise the appeal of the Tenjin area.
(3) Overview of the Property to be acquired
Property name
Tenjin Nishi-Dori Business Center（Land with leasehold interest）
Type of the specified asset
Real estate trust beneficiary interest
Acquisition price (planned) 7,700 million yen
Trustee
Undecide
Location (Lot number)
2-149, Tenjin, Chuo Ward, Fukuoka City and 4 lots
Area
1,343.51 ㎡
ZoningCommercial areaLand
Floor area ratio
700% (1,300% at maximum based on the
district plan)
Building coverage
80%
Type of ownership
Ownership
Soil Contamination Risk
Tokio Marine & Nichido Risk Consulting Co., Ltd.
Assessment Organization
Appraisal value
7,790 million yen (as of February 1, 2021)
Appraiser
Japan Real Estate InstituteCollateral after acquisition
None
・The Transaction Agreement for the property falls under the categoryof forward commitment, etc. The Transaction Agreement stipulates
that if it becomes impossible to achieve the purpose of the agreement
due to a cause not attributable to FRC, the Transaction Agreement may
Special notations
be terminated without penalty. In the Transaction Agreement FRC will
not pay a deposit.
・The boundary between the adjacent land and part of the land of theProperty has not been confirmed in the presence of both parties or inwriting. However, there has been no dispute, etc. with the owner of the- 3 -Status of leasing (planned)

adjacent land as of the date of this press release and it has been agreed
with the seller to conclude a boundary confirmation document by theend of May, 2021 at the seller's responsibility and burden.
・It has been agreed between the trustee and Fukuoka Jisho Co. Ltd.,the lessee, that (a) when the trustee wishes to transfer the property, it
shall grant preferential negotiation rights to Fukuoka Jisho Co. Ltd.;and (b) if Fukuoka Jisho Co. Ltd., declares its intention to purchase theproperty for a price that is equal to or more than the sales priceplanned for the third party when the trustee tries to transfer theproperty, the company has the preferential right to purchase theproperty.
・FRC has entered into a three-party agreement with the seller and theowner of the adjacent land regarding the real estate trust beneficiaryinterest, etc. in the property, and when transferring the land or the trust
beneficiary interest in the land or when transferring all or part of therights and obligations based on the three-party agreement to a third
party, the consent of the owner of the adjacent land is required for acertain period of time.
Total number of tenants 1
Tenant’s name
Fukuoka Jisho Co., Ltd.
Type of contract
Ordinary lease
Leasing period
60 years
Start of Lease
June 1, 2021
1. Initial Rent (Fixed Rent)
The period until either the end of February
or the end of August, whichever comes firstafter nine months elapse following thecompletion of the redevelopment (the datecertification of inspection is obtained), upon
the redevelopment of the existing buildingon the Property
318 million yen (Note1)
2. Post-Change Rent (Variable Rent,
Calculated Annually)
Contract rents (annual
The period starting March 1 or September
rent)
1, whichever comes first after nine months
elapse following the completion of theredevelopment (the date certification of
inspection is obtained), upon theredevelopment of the existing building of
the Property
Post-change rent = initial rent x latest actual
rental income of the building after
redevelopment (Note2) / standard rental
income of the building after redevelopment(Note3)

Security deposits- 4 -318 million yen (Note4)

Leasable floor space
Total leased floor space
Occupancy rate

1,343.51 ㎡(Note5)
1,343.51 ㎡(Note5)100.0% (Note6) (as of June 1, 2021, planned)*All figures for lot number, space, etc. are based on the indications on the registry.
(Note1) The figures are rounded down to the nearest million yen.
(Note2) Refers to the total amount of actual rent and common expenses (excluding parking fees, bicycle parking fees,
vending machines, utilities expenses, etc.) paid into Fukuoka Jisho Co. Ltd.; 's bank account for receiving rent fromthe lessee of the building after the redevelopment, for the period from January 1 of the previous year to December 31 of
the previous year in the case the initial date of reckoning rent application is March 1, and for the period from July 1 ofthe previous year to June 30 of the current year in the case the initial date of reckoning rent application is September 1.
(Note3) Refers to the standard amount of annual rental income for the building on the property after the redevelopmentthat is agreed in the lease agreement.
(Note4) The figures are rounded down to the nearest million yen.
(Note5) The leasable area indicates the area that can be leased to the end tenants. The total leased area indicates the sumof the areas designated in the lease agreements that concluded with the end tenants as at June 1, 2021.
(Note6) The figure indicates the ratio of the total leased area to the leasable area, and has been rounded to the firstdecimal place.

(4) Profile of Previous Owners
Name
Location

Fukuoka Jisho Co., Ltd.
2-25, 1-chome, Sumiyoshi, Hakata Ward, Fukuoka City
Real estate development, leasing, brokerage and property
Nature of business
management
Representative title and nameIchiro Enomoto, President and C.E.O
Specified capital
100 million yen
Established
July 19, 1961
Total assets
198,299 million yen (as of May 31, 2020)
Total net assets
61,455 million yen (as of May 31, 2020)
Relationship with FRC and the asset management company
The seller is a shareholder of FRC’s asset management company,
Fukuoka Realty Co., Ltd., with equity of 50% (Note). The company
Capital relationshipalso owns 73,136 investment units of FRC (As of February 28,2021).
The seller has dispatched two part-time directors to the asset
Personnel relationshipmanagement company.
The seller has such transactions with FRC and the asset managementcompany as property management services, brokerage of real estatetransactions and lease of properties owned by FRC. There is no
Business relationshiprelationship to note between the affiliates or affiliated companies ofthe seller and the affiliates or affiliated companies of FRC and theasset management company.
The seller falls within the scope of related parties of FRC. The seller
falls within the scope of parent company, etc., designated in the
Related parties or not
Financial Instruments and Exchange Act, of the asset managementcompany.

(Note) The investment ratio of Fukuoka Jisho, Co., Ltd. will increase to 55% as of March 19, 2021 as stated in “NoticeConcerning Change of Shareholders of the Asset Management Company” announced today.

- 5 -(5) Profile of Previous Owners
Property name
Status of previous
ownersTenjin Nishi-Dori Business Center（Land with leasehold interest）
Owner

Previous owner

Fukuoka Jisho Co., Ltd.

Those other than a party that has
special interests

A shareholder of the asset
management company(with equity of 50%) (Note)－

For the purpose of development－

Acquisition
price

Descriptions omitted because theproperty has been owned by theowner for more than a year－

Acquisition
timingDecember 2014－

Company name
Relationshipwith special
interested
parties
Background andreason ofacquisition, etc.

(Note) The investment ratio of Fukuoka Jisho, Co., Ltd. will increase to 55% as of March 19, 2021 as stated in “NoticeConcerning Change of Shareholders of the Asset Management Company” announced today.

(6) Sales Agent Profile
None(7) Form of Payment
FRC is scheduled to pay the acquisition fee in full on the scheduled acquisition date of the property(June 1, 2021) through the proceeds from the sale of the asset and cash on hand.
(8) Transaction with Interested Parties
Fukuoka Jisho Co., Ltd., the seller of the property, falls within the scope of interested parties of the asset
management company. Accordingly, the asset management company has conducted discussions at andobtained approvals of its Investment Management Committee, Compliance Assessment Committee and
Board of Directors concerning the acquisition price and other terms of the property, pursuant to theregulations and other rules of the asset management company.
(9) Acquisition on Schedule
March 18, 2021
Decision of acquisition
March 18, 2021
Conclusion of agreement
June 1, 2021
Payment (scheduled)
June 1, 2021
Delivery of the property (scheduled)
4. Outlook
Since the scheduled acquisition date of the Property and the scheduled transfer date of an asset (Note)
is June 1, 2021, the acquisition of the Property and transfer of an asset (Note) had no impact on the forecastof performance for the fiscal period ended February 2021 (September 1, 2020 – February 28, 2021),
announced in “Earnings Briefing for the Period Ended August 2020” dated October 16, 2020. As theimpact on the forecast of performance for the fiscal period ending August 2021 (March 1, 2021 – August- 6 -31, 2021) will be minimal, revisions will not be made.
(Note) For an overview of the disposition of an asset, please refer to “Fukuoka REIT Corporation Concludes Agreement
to Dispose Asset and Terminate Lease Agreement” announced today.

- 7 -5. Overview of Appraisal Report
Property Name

Tenjin Nishi-Dori Business Center（Land with leasehold interest）

Appraisal value

7,790,000 thousand yen

Appraiser

Japan Real Estate InstitutePricing dateFebruary 1, 2021
Category

Income Capitalization Approach Value
Value Calculated Using the Direct Capitalization Method
Gross Operating Revenue
Maximum Gross Operating Revenue

Figures
7,790,000 thousand yen
7,790,000 thousand yen
318,153 thousand yen

318,153 thousand yen Based on the lease agreement
0 yen

Shortfall Attributed to Vacancies
Operating Expenses

48,653 thousand yen
0 yen

PM Fees

Taxes and Fees

Reasons, etc.

Based on the related materials of taxes
48,653 thousand yen and public dues, burden adjustment
measures and the estimate, etc.

Damage Insurances

0 yen

Other Expenses

0 yen

Net Operating Income

269,500 thousand yen

Profit through Mangement of Temporary Deposits, etc. 3,182 thousand yen
Net Cash Flow

272,682 thousand yen
Evaluated considering the location, etc.
3.5% of the property, future uncertainties,
comparable cases, etc.

Capitalization Rate
Value through DCF mothod

7,780,000 thousand yen

Discount Rate

3.0%

Termial Cap Rate

3.7%

Value through cost method-

Percentage of Leased Land-

Percentage of Building-

Other matters noted by the appraiser in inconducting appraisal Not listed*Fukuoka REIT Corporation’s website is https://www.fukuoka-reit.jp/en/index.html- 8 -(Attachments)
Reference 1: Outlook of the Property
Reference 2: Location of the Property
Reference 3: Map of FRC’s Portfolio
Reference 4: List of FRC’s Portfolio- 9 -Reference 1: Outlook of the Property
Tenjin Nishi-Dori Business Center (Land with leasehold interest)

Aerial photography of Tenjin Area

- 10 -

Reference 2: Location of the Property- 11 -

Reference 3: Map of FRC’s Portfolio- 12 -

Reference 4: List of FRC’s Portfolio
Use

Property Name

Acquisition Date(scheduled)

RetailOffice buildings
OthersCanal 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)
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（Landwith leasehold interest）
Amex Akasakamon Tower
City House Keyaki Dori
Aqualia Chihaya
D-Wing Tower
Granfore Yakuin Minami
Hotel FORZA Oita
Tissage Hotel Naha
Tosu Logistics Center
LOGICITY Minato Kashii
LOGICITY Hisayama
LOGICITY Wakamiya
Total of all properties

Acquisition Price(planned) (mm yen)

Investment
Ratio(Note1)(Note2)

Nov. 9, 2004
Mar. 2, 2011
Nov. 9, 2004
Jul. 1, 2005
Mar. 1, 2018
Sep. 28, 2006
Nov. 30, 2006
Sep. 3, 2007
Feb. 1, 2008
Mar. 27, 2008
May 1, 2015
Nov. 9, 2004
Nov. 9, 2004
Sep. 30, 2005
Mar. 16, 2006
Mar. 13, 2009
Feb. 1, 2013
Mar. 28, 2013
Mar. 1, 2018
May 29, 2020

32,00021,080(Note3)
19,610
6,633
10,000
5,300
2,400
1,130
2,500
3,550
5,250
14,600
11,200
4,400
7,000
5,900
2,600
2,800
4,230
3,290

15.8%
10.4%
9.7%
3.3%
5.0%
2.6%
1.2%
0.6%
1.2%
1.8%
2.6%
7.2%
5.5%
2.2%
3.5%
2.9%
1.3%
1.4%
2.1%
1.6%

June 1, 2021

7,700

3.8%

Sep. 1, 2006
Dec. 20, 2007
Mar. 1, 2012
Mar. 1, 2013
Nov. 4, 2014
Mar. 1, 2013
Dec. 7, 2018
Mar. 28, 2014
Mar. 27, 2015
Jun. 1, 2017
Jun. 30, 2020

2,060
1,111
1,280
2,800
1,100
1,530
2,835
1,250
8,150
5,050
1,700
202,019

1.0%
0.6%
0.6%
1.4%
0.5%
0.8%
1.4%
0.6%
4.0%
2.5%
0.8%
100.0%－(Note1) All figures in the Acquisition Price (planned) column indicate the acquisition price written in the sales agreement between
FRC and the seller, and exclude charges, taxes and other expenses.
(Note2) The ratio are rounded off to one decimal places.
(Note3) The amount indicates that after the disposition described in "Fukuoka REIT Corporation Concludes Agreement to Dispose
Asset and Terminate Lease Agreement" announced today has been conducted. Furthermore, the indicated amount is calculated bysubtracting the planned disposition price from the initial planned acquisition price.

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