October 19, 2022
Provisional translation only

Fukuoka REIT Corporation
1-2-25 Sumiyoshi, Hakata Ward, Fukuoka City
Zenji Koike
Executive Director(Securities Code: 8968)
Asset Management Company:
Fukuoka Realty Co., Ltd.
1-2-25 Sumiyoshi, Hakata Ward, Fukuoka City
Zenji Koike
President and CEO
Inquiries:
Hiroyuki Ayabe
Executive Officer and General Manager
Finance Department
TEL: +81-(0)92-272-3900

Notice on Disposition of Property (Domestic real estate)
Fukuoka REIT Corporation (FRC) announces that Fukuoka Realty Co., Ltd. (FR), the asset management company
to which FRC entrusts the management of its assets, decided today to dispose the following domestic real estate(the “Disposition”).
1. Summary of Disposition
Property Name
Disposition Property

Disposition Price (planned) (Note1)

Book Value (Note2)
Appraisal Value
Difference between the disposition price and thebook value (Note3)
Buyer
Scheduled date of execution of disposition agreement
Disposition Date (scheduled)

Kurume Higashi Kushiwara SC
Real estate trust beneficiary interest
Total 2,740 million yen(each co-ownership interest(15% co-ownership interest,
55% co-ownership interest, 30% co-ownership interest)
planned to be disposed divided by three times. Eachdisposition price (estimated) is the following.
1st / 411 mm yen (15% co-ownership interest)
2nd / 1,507 mm yen (55% co-ownership interest)
3rd / 822 mm yen (30% co-ownership interest)
1,966 million yen
2,740 million yen
773 million yen
Non-disclosure (Note4)
October 26, 2022
1st (15% co-ownership interest) / February 28, 2023
2nd (55% co-ownership interest) / August 31, 2023
3rd (30% co-ownership interest) / November 30, 2023

(Note1) Disposition price does not include disposition expenses, amounts equivalent to the settlement of the property taxes and city
planning taxes, consumption taxes on the building and other expenses.
(Note2) Figures of the book value are indicated as of the end of August 2022.
(Note3) The figures calculated as the difference between the estimated disposition price and the book value (as of the end of August2022), and is different from the gain or loss on sale.
(Note4) Not stated because the consent of the buyer cannot be obtained.

-1-2. Reason for Disposition
Kurume Higashi-Kushiwara SC (the "Property") has contributed to the continuation of stable dividends by FRC
since its acquisition in February 2008 as a roadside community shopping center located close to the center ofKurume City, Fukuoka Prefecture, and with excellent transportation access and competitiveness.
Although FRC believes that the Property will continue to be competitive, it has decided to dispose it for thefollowing reasons under the recognition that that it will contribute to the best interests of unitholders in the medium
to long term.
(1) Based on the investment guidelines of FRC revised in March 2019, diversify risks by diversifying
investment types (lowering the ratio of investment in retail facilities).
(2) The disposition price greatly exceeds the Property’s book value, and in order to continue stabledividends, FRC consulted with the buyer and obtained an agreement on disposition in stages over threeterms.
(3) FRC will dispose it and use the obtained funds obtained for capital investment in internal growth. The
proceeds from the sale will be used to fund renewal of existing properties while maintaining stabledividends.
3. Detail of the Property for Disposition
Property Name

Kurume Higashi Kushiwara SC

Types of Assets
Disposition Price (planned)
Trust Trustee
Trust Agreement Period Expiration Date

Real Estate Trust Beneficiary Interest
2,740 million yen (total)
Sumitomo Mitsui Trust Bank, Limited
January 31, 2028
370-3 Higashi-Kushihara-cho, Kurume City Fukuoka
Prefecture
7,182.44 ㎡
Semi-industrial area
Ownership

Location (address)
Area
Land
Areas of use
Form of Ownership
Structure/Number ofFloors
Date of construction
Building
Total floor area
Form of OwnershipAppraisal value

Steel-framed flat roof, three floors
December 3, 2007
6,467.82 ㎡
Ownership
2,740 million yen (as of August 31, 2022)

Appraiser

The Tanizawa Sogo Appraisal Co., Ltd.

Collateral

None- The Disposition falls under the category of a forward
commitment, etc. (meaning a sales contract dated earlier andfor which settlement and delivery of the Property are to bemade after one month or more has elapsed from the conclusionof the contract and other similar agreements).

Special notations- Under this contract, FRC and the buyer may terminate thisagreement by paying to the other party an amount equivalentto 20% of the total purchase price for the purchase and salethat has not been completed at the time of such approval withthe consent of the other party after the consultation.
- Under this contract, in the event either FRC or the buyer
breaches its obligations under this agreement, the other party-2-may terminate this agreement in whole or in part if such breachis not resolved within thirty days, in principle, from the date ofreceipt of notice from the other party. In this case, thecounterparty shall be paid the amount equivalent to 20% of thetotal purchase price pertaining to the sales and purchase thathave not been completed at the time of such termination as apenalty.
- Notwithstanding the provisions regarding the above
termination, this agreement may not be terminated in respectof the beneficial interest in respect of which such transfer
became effective in any event after disposition of eachbeneficial interest became effective.
- FRC intends to enter into an agreement between the sub-coowner of trust beneficial interest with the buyer, FR and theTrustee and agree on the following matters.
1) Exercise of the right to order as a beneficiary, acceptance tothe Trustee, consent to the Trustee, and other decision-making
relating to the matters concerning the management of theProperty shall be made at the buyer, irrespective of the shareownership, except for certain matters.
2) Certain matters, such as the conclusion, change orcancellation of the lease contract for the Property, the sale ofthe premises and other dispositions, shall not be undertaken
without the consent of all quasi-co-owners.
3) Each sub-co-owner may not transfer, pledge or otherwise
dispose of his/her beneficial interest without the prior consent
of the other sub-co-owners, unless FRC assigns the beneficial
interest to the buyer pursuant to this agreement.
4) Each quasi-co-owner agrees not to request a division of thetrust beneficial interest in the Property for a period of five
years from the effective date of this agreement. In addition, inthe event that any of the quasi-co-owners does not manifest
his/her intention to refuse to renew the Special Clause on nonpartition by the expiration date of the term one year prior to thedate of the expiration date of the term, the term shall berenewed for five years counting from the date of expiration of
the term only if it is not contrary to laws and regulations, andthe same shall apply thereafter.

Status of leasing

Tenants1

Total rent income (annually)

176 million yen (Note1)

Security deposit

146 million yen (Note2)

Total leasable area

6,467.80 ㎡ (Note3)

Total leased area

6,467.80 ㎡ (Note3)

Trends in occupancy rates
over the past five years (Note5)

Aug.2018

Aug.2019

Aug.2020 Aug.2021

Aug. 2022

100.0%

100.0%

100.0%

100.0%

100.0%*All figures for area, use, structure, etc. are based on the indications on the registry.
(Note1) Total rent income for the one-year period from September 1, 2021, to August 31, 2022 (total of rent and-3-

common service expenses). The figure has been rounded down to the nearest million yen.
(Note2) Figures are indicated as of the end of August 2022. The figure has been rounded off to the nearest million yen.
(Note3) The leasable area is the total floor area of the building, and the total lease area is the contract area indicated in
the lease agreement concluded as of the end of August 2022.
(Note4) The figure indicates the ratio of the total eased area to the leasable area, and has been rounded to the first decimalplace.

4. Overview of Buyer
The buyer is a domestic business company, but the name is not disclosed because the consent of the buyer cannot
be obtained. The buyer does not fall under the category of interested party stipulated in the Act on Investment
Trusts and FRC or related party stipulated in the Regulations for Interested-Party Transactions of FR as of today.
In addition, there is no notable capital relationship, personal relationship or business relationship between thebuyer, FRC and FR. The buyer does not fall under the category of related party of FRC or FR.
5. Sales Agent ProfileNone
6. Form of payment
The estimated disposition price will be settled on each scheduled disposition date by receiving an amountcalculated.
7. Transactions with interested parties
The Disposition is not a transaction with any person who has a special interest with FRC or FR.
8. Date of disposition
Date of assignment decision
Date of execution of transfer agreement
Payment date

Delivery date of the Property

October 19, 2022
October 26, 2022
1st (15% co-ownership interest) February 28, 2023
2nd (55% co-ownership interest) August 31, 2023
3rd (30% co-ownership interest) November 30, 2023
1st (15% co-ownership interest) February 28, 2023
2nd (55% co-ownership interest) August 31, 2023
3rd (30% co-ownership interest) November 30, 2023

9. Outlook
For the impact of the Disposition on the financial results for the fiscal periods ending February 28, 2023
(September 1, 2022 – February 28, 2023), and August 31, 2023 (March 1, 2023 – August 31, 2023), please refer
to “Forecast for the Fiscal Period Ending February 28, 2023, and the Fiscal Period Ending August 31, 2023” in“Earnings Briefing for the Period Ended August 2022” announced today.

-4-10. Outline of appraisal report
Property Name

Kurume Higashi Kushiwara SC

Appraisal value

2,740,000 thousand yen

Appraiser

The Tanizawa Sogo Appraisal Co., Ltd.

Pricing dateAugust 31, 2022
Category

Income Capitalization Approach Value
Value Calculated Using the Direct Capitalization M ethod

Gross Operating Revenue
Maximum Gross Operating Revenue

FiguresReasons, etc.

2,740,000 thousand yen
2,790,000 thousand yen
176,085 thousand yen
176,085 thousand yen
0 thousand yen

Shortfall Attributed to Vacancies

Operating Expenses

18,394 thousand yen

PM Fees

5,282 thousand yen

Repair and Maintenance Expenses

2,175 thousand yen

Taxes and Fees

10,362 thousand yen

Damage Insurances

398 thousand yen

Other Expenses

176 thousand yen

Net Operating Income
Profit through Mangement of Temporary Deposits, etc.

Net Cash Flow

157,691 thousand yen
1,467 thousand yen
153,504 thousand yen
5.5%

Capitalization Rate
Value through DCF mothod

Discount Rate2,720,000 thousand yen
Years 1-5 5.3％
Years 6- 5.5％

Termial Cap Rate

5.7%

Value through cost method

2,690,000 thousand yen

Percentage of Leased Land

73.4%

Percentage of Building

26.6%

Other matters noted by the appraiser ininconducting appraisal

Not listed*FRC’s website is https://www.fukuoka-reit.jp/en/index.html-5-

(Attachments)
Reference 1: Outlook of the Property
Reference 2: Location of the Property
Reference 3: Map of FRC’s Portfolio after the disposition
Reference 4: List of FRC’s Portfolio after the disposition-6-Reference 1: Outlook of the Property-7-Reference 2: Location of the Property-8-Reference 3: Map of FRC’s Portfolio after the disposition-9-Reference 4: List of FRC’s Portfolio after the disposition
UseAcquisition
Date

Property Name

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
K’s Denki Kagoshima
Marinoa City Fukuoka (Marina Side Building)
Canal City Business Center Building
Gofukumachi Business Center
Sanix Hakata Building
Taihaku Street Business CenterHigashi 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)
Hakata Chikushi-Dori Center Building
Tosu Logistics Center
LOGICITY Minato Kashii
Logistics
LOGICITY Hisayama
LOGICITY Wakamiya
Amex Akasakamon Tower
City House Keyaki DoriResidence
Aqualia Chihaya
D-Wing Tower
Granfore Yakuin Minami
Hotel FORZA Oita
OthersTissage Hotel Naha
Total of all properties

Acquisition
Price

Investment
Ratio(mm yen)(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
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

32,00021,06019,610
6,633
10,000
5,300
2,400
1,130
3,550
5,250
14,600
11,200
4,400
7,000
5,900
2,600
2,800
4,230
3,290

15.7%

Jun.1, 2021

7,700

3.8%

Mar. 1, 2022
Mar. 28, 2014
Mar. 27, 2015
Jun. 1, 2017
Jun. 30, 2020
Sep. 1, 2006
Dec. 20, 2007
Mar. 1, 2012
Mar. 1, 2013
Nov. 4, 2014
Mar. 1, 2013
Dec. 7, 2018
－

4,320
1,250
8,150
5,050
1,700
2,060
1,111
1,280
2,800
1,100
1,530
2,835
203,839

2.1%

10.3%
9.6%
3.3%
4.9%
2.6%
1.2%
0.6%
1.7%
2.6%
7.2%
5.5%
2.2%
3.4%
2.9%
1.3%
1.4%
2.1%
1.6%

0.6%
4.0%
2.5%
0.8%
1.0%
0.5%
0.6%
1.4%
0.5%
0.8%
1.4%
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 is rounded off to one decimal places.

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