February 28, 2024
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 Trust Beneficiary Interest)
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 the book value (Note3)
Buyer
Sales agent
Scheduled date of execution ofdisposition agreement
Scheduled date of disposition

Marinoa City Fukuoka (Marina Side Building) (Building)Real estate trust beneficiary interest
783 million yen
771million yen as of August 31, 2024 (estimated)
817million yen as of August 31, 2023
754 million yen
11 million yen(difference from the estimated book value as of August 31, 2024)(34) million yen(difference from the book value as of August 31, 2023)
Fukuoka Jisho Co., Ltd. and not disclosed company (hereinafter,
the “joint company”) (Note4)
None
February 29, 2024
September 2, 2024

(Note1) Disposition price (planned) 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) The figure has been rounded off to the nearest million yen.
(Note3) The figures calculated as the difference between the disposition price (planned) and each book value (as of the end ofAugust 2023 and 2024, however the book value as of August 2024 is estimated.), and is different from the gain or loss on sale.
(Note4) Not stated because the consent of the buyer cannot be obtained.
(Note5) Upon the disposition, the trust beneficiary interest in the property will first be divided into beneficial interests in the land-1-

and building, of which only the trust beneficiary interest in the building will be transferred to the buyer, and then the trust
beneficiary interest shall be terminated, and at the same time, the buyer own the building, the trustee and the buyer, Fukuoka
Jisho Co., Ltd. will conclude a land lease agreement with the content described in "3. Detail of the property for disposition (2)Overview of land lease agreement " below. FRC plans to continue to hold the trust beneficiary interest in the property's land withleasehold interest.

2. Reason for disposition
Marinoa City Fukuoka (Marina Side Building) (hereinafter, the “property”) is a part of Marinoa City Fukuoka,
a large-scale retail facility centered on Kyushu's first outlet mall, based on the concept of an "Urban Resort
Entertainment SC”. The property has contributed to the continuation of stable dividends by FRC since its
acquisition in May 2015.
Having considered various factors in relation to FRC, disposition of the building portion of the property wasdecided based on the judgment that such will serve in the best interests of unitholders in the medium to longterm for the following reasons:(1) While there is a risk of a decline in profitability and property value in the future due to deterioration, etc.,
the property can be sold at an amount exceeding the book value by transferring it to Fukuoka Jisho Co.,
Ltd., etc., which is considering rebuilding Marinoa City Fukuoka.
(2) If the reconstruction of Marinoa City Fukuoka is implemented, it is expected that the competitiveness ofthe facility as a retail facility will be improved and that significant value will be created in the future forthe leasehold land that the FRC hold.
(3) By continuing to hold leasehold land, it is possible to receive fixed rents that are not affected byfluctuations in sales and occupancy rates of end tenants, and to secure a more stable cash flow over thelong term.
3. Detail of the property for disposition(1) Detail of the property

Appraiser

Marinoa City Fukuoka (Marina Side Building)(Building)Real estate trust beneficiary interest
783 million yen
Mitsubishi UFJ Trust and Banking Corporation
April 30, 2035
12-30, 2-chome, Odo, Nishi Ward, Fukuoka City
26,917.74 ㎡
Quasi-industrial district
Ownership
1) Steel-framed with alloy galvanized steel roof, 3 floors2) Steel-framed with alloy galvanized steel roof, 2 floors3) Steel-framed with flat roof, 4 floors
October 19, 2000
33,069.82 ㎡
Ownership
754 million yen (as of February 1, 2024)
The Tanizawa Sogo Appraisal Co., Ltd.

Collateral

NoneSpecial notations

・The beneficiary interest transfer agreement for thedisposition (the “Transfer Agreement”) falls under theProperty nameTypes of assets
Disposition price (planned)
Trust trustee
Trust agreement period expiration date
Location (address)
AreaLandZoning(nottransferable) Type of ownership
Structure/number of floors
Building

Date of construction
Total floor space
Type of ownershipAppraisal value (Building)-2-Tenants

category of forward commitment, etc. (a postdated
transaction agreement where the settlement and delivery
are to take place one month or more after the conclusionof agreement as well as other similar agreements).
・Under the Transfer Agreement, in the event that either
FRC or the buyer breaches its obligations under theTransfer Agreement, the other party may cancel theTransfer Agreement in whole or in part if the party
breaching its obligations under the Transfer Agreement
is given notice in writing specifically indicating thebreach and such breach is not resolved within 30 days ofreceiving the notice.
・Notwithstanding the provisions on cancellation
above, the Transfer Agreement may not be cancelled inany event after the transfer of the beneficiary interest
becomes effective.
1

Status of leasing

Total rent income(annually)

354 million yen (Note1)

Security deposit

261 million yen (Note2)

Total leasable floor space

33,069.82 ㎡ (Note3)

Total leased floor space

33,069.82 ㎡ (Note3)

Trends in occupancy
rates over the past fiveyears (Note4)

Aug.
2019
100.0%

Aug.
2020
100.0%

Aug.
2021
100.0%

Aug.
2022
100.0%

Aug.
2023
100.0%*All figures for land area and building floor space are based on the indications on the registry.
(Note1) Total rent income for the one-year period from September 1, 2022, to August 31, 2023 (total of rent and common service
expenses). The figure has been rounded off to the nearest million yen.
(Note2) Figures are indicated as of the end of August 2023. The figure has been rounded off to the nearest million yen.
(Note3) The leasable floor space is the total floor space of the building, and the total lease space is the contract area indicated in
the lease agreement concluded as of the end of August 2023.
(Note4) The figure indicates the ratio of the total leased floor space to the leasable floor space, and has been rounded to the firstdecimal place.
(Note5) The Transfer Agreement is subject to a condition precedent that each transferee has concluded, or to be concluded, anagreement to hold a right to use such as a leasehold right with respect to the surrounding land of the property.

(2) Overview of land lease agreement
In conjunction with the disposition, FRC plans to conclude a land lease agreement at the same time as the building
disposition agreement based on an agreement reached with Fukuoka Jisho Co., Ltd. to conclude a land leaseagreement with that company as the lessee for the land that FRC will continue to own.
The following is an overview of the land lease agreement:

Status of leasing(Scheduled)

Location
Total number of tenants
Name of tenantsContract typeLeasing term
Leasing start date2704-2 2-Chome Odo, Nishi Ward, Fukuoka City1
Fukuoka Jisho Co., Ltd. (Note1)
Ordinary lease
32 years 7 months
September 2, 2024-3-195 million yen (Fixed rent)
However, 65 million yen (Fixed rent) until theday on which 26 months have elapsed from thedate of start of leasing (Note2)(Note3)
97 million (Note2)
26,846.74 ㎡ (Note4)(Note5)
26,846.74 ㎡ (Note4) (Note5)100.0% (Note6) (September 2, 2024 (scheduled))
・The trustee and the lessee, Fukuoka Jisho Co.,
Ltd. have agreed in the event that Fukuoka JishoCo., Ltd. and the joint company decide not tocommence reconstruction, etc. of the building,
after Fukuoka Jisho Co., Ltd. and the jointcompany notify the trustee, the trustee will grant
Fukuoka Jisho Co., Ltd. the preferential
negotiating rights to sell the property to Fukuoka
Jisho Co., Ltd. at a price to be determined bymutual agreement between the two parties, basedon a fair appraisal value by a third party realestate appraiser. In addition, with respect to thetransfer of the trust beneficiary interest in theland, it has been agreed between FRC, thebeneficiary, and Fukuoka Jisho Co., Ltd. thatFRC will grant the same preferential negotiatingrights to Fukuoka Jisho Co., Ltd.
・It is agreed between the trustee and Fukuoka
Jisho Co., Ltd., in the event that the trustee
intends to transfer the land, the trustee will grant
preferential negotiating rights to Fukuoka JishoCo., Ltd. and in the event that the trustee
transfers the land and Fukuoka Jisho Co., Ltd.
expresses its intention to purchase the land at orabove the estimated sales price to a third party,Fukuoka Jisho Co., Ltd. may purchase the land ina preferential manner.

Total rent income (annually)
Security deposits
Total leasable floor space
Total leased floor space
Occupancy rate

Other(Note1) In conjunction with the conclusion of the above land lease agreement with FRC, Fukuoka Jisho Co., Ltd. will conclude
a fixed-term sublease agreement for business use to quasi co-own sublease rights for this land with a business company that will
sublease to itself and jointly purchase the property with itself.
(Note2) The figure has been rounded off to the nearest million yen.
(Note3) If no date of start of operation of a new facility has come by the day following the day on which 26 months have elapsed
from the date of start of leasing, the rent until the day preceding the date of start of operation can be set at 65 million yen a year
but only until the day on which 30 months have elapsed from the date of start of leasing. Fukuoka Jisho Co., Ltd. shall endeavor
to have the new facility open for business by the day following 26 months from the date of commencement of the lease.
(Note4) Total leasable floor space is the area that can be leased to tenants including 2704-17 and 2704-19. Total leased floor
space is the sum of the contracted area, 2704-2 indicated in the lease agreements with tenants planned to be concluded as ofFebruary 29, 2024.
(Note5) 2704-17 and 2704-19 2-chome, Odo, Nishi Ward, Fukuoka City (total land area 71 ㎡) become subject to the leasing if
the superficies with the Fukuoka City Government as the holder of the superficies are cancelled. When the said superficies are-4-

terminated, it will be added to the subject of lease based on the above-mentioned land lease agreement. The leasable floor spaceand leased floor space after such addition will both be 26,917.74 ㎡. However, rent and other lease terms do not change even in
the event of such.
(Note6) The figure indicates the ratio of the total leased floor space to the leasable floor space, and has been rounded to the firstdecimal place.

4. Overview of buyer(1) Overview of Fukuoka Jisho Co., Ltd.
Company nameLocation

Fukuoka Jisho Co., Ltd1-2-25 Sumiyoshi, Hakata Ward, Fukuoka City
Real estate development, leasing, brokerage andNature of business
management
Representative title and nameIchiro Enomoto, President and C.E.O
Specified capital
100 mm yen (As of May 31, 2023)
Established
July 19, 1961
Total assets
239,554 million yen (As of May 31, 2023)
Total net assets
88,923 million yen (As of May 31, 2023)
Relationship with FRC and the asset management company
The seller is a shareholder of FRC’s asset management company,
Capital relationshipFukuoka Realty Co., Ltd., with equity of 55%. The company also
owns 73,136 investment units of FRC (As of August 31, 2023).
Personnel relationship

Business Relationship

Related parties or not

Personnel relationship: The buyer has dispatched two part-time
directors and 3 employees to the asset management company.

The seller has such transactions with FRC and the asset
management company as property management services, brokerageof real estate transactions and lease of properties owned by FRC.
There is no relationship to note between the affiliates or affiliatedcompanies of the seller and the affiliates or affiliated companies ofFRC and the asset management company.
The seller falls within the scope of related parties of FRC. The
seller falls within the scope of parent company, etc., designatedin the Financial Instruments and Exchange Act, of the asset
management company(2) The other buyer is not disclosed because the consent of the buyer cannot be obtained. The buyer is adomestic business company, but there is no notable capital relationship, personal relationship or business
relationship between the buyer, FRC, FR, and related party of FRC or FR. The buyer does not fall under thecategory of related party of FRC or FR.
5.

Sales agent profile
None

6.

Form of payment etc.
The payment is scheduled to be settled in the form of receiving the disposition price on the date of delivery(September 2, 2024) of the property.

7.

Transaction with interested parties-5-

Fukuoka Jisho Co., Ltd., one of the buyers of the property and the lessee of the land, falls under the category of
an interested party of the asset management company. Accordingly, the disposition price of the property, andrent for the land and other conditions, etc., were discussed and approved with concerning terms of the property,
pursuant to the regulations and other rules of the asset management company at Investment Management
Committee, Compliance Assessment Committee and Board of Directors.
8. Date of disposition

Date of assignment decision
Date of execution of transfer agreement (scheduled)Payment date
Delivery date of the property

February 28, 2024
February 29, 2024
September 2, 2024 (scheduled)
September 2, 2024 (scheduled)

9. Outlook

Since the property’s scheduled disposition date is September 2, 2024, there is no impact on the forecast ofperformance for the fiscal period ending February 2024 (September 1, 2023 to February 29, 2024) and forthe fiscal period ending August 2024 (March 1, 2024 to August 31, 2024) announced in “Earnings Briefing
for the Period Ended August 2023” dated October 18, 2023. The forecast of performance for the fiscal period
ending February 2025 (September 1, 2024 to February 28, 2025) is scheduled to be announced on April 16,2024.

-6-10. Outline of appraisal report
Property nameMarinoa City Fukuoka (Marina Side Building) (Building)Appraisal value

754,000 thousand yen

Appraiser

The Tanizawa Sogo Appraisal Co., Ltd.

Pricing dateFebruary 1, 2024
Category

Income capitalization approach value

Value calculated using the direct capitalization method

Figures

Reasons, etc.

754,000 thousand yen
The direct capitalization method is not applied because it is deemed
reasonable to demolish the building in the near future. As a result, thefigures shown below are the seven-month period for which the pre-existingbuildings remain, calculated by DCF method.

Value through DCF mothod

754,000 thousand yen

Gross operating revenue

206,500 thousand yen

Maximum gross operating revenue

206,500 thousand yen

Shortfall attributed to vacancies

0 thousand yen

Operating expenses

55,633 thousand yen

PM fees

2,100 thousand yen

Repair and maintenance expenses
Taxes and fees

0 thousand yen
14,684 thousand yen

Damage Insurances

643 thousand yen

Rent for leased land

37,998 thousand yen

Other expenses

206 thousand yen

Net operating income

150,866 thousand yen
953 thousand yen

Profit through mangement of temporary deposits, etc.

0 thousand yen

Capital expenditure
Net cash flow

151,819 thousand yen

Discount rate

4.6%

Termial cap rate5.0%

Value through cost method

873,000 thousand yen

Percentage of leased land

95.2%

Percentage of building

4.8%

Other matters noted by the appraiser ininconducting appraisal

Not listed*FRC’s website is https://www.fukuoka-reit.jp/en/index.html-7-

(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-8-

Reference 1: Outlook of the Property-9-Reference 2: Location of the Property- 10 -

Reference 3: Map of FRC’s Portfolio after the disposition- 11 -

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)(Land with leasehold interest) (Note3)
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)
Hakata Chikushi-Dori Center Building
Kumamoto East Front Building
Hakata FD Business Center
Amex Akasakamon Tower
City House Keyaki Dori
Aqualia Chihaya
D-Wing Tower
Granfore Yakuin Minami
Axion Befu-Eximae Premium
Hotel FORZA Oita
Tissage Hotel Naha
Tosu Logistics Center
LOGICITY Minato Kashii
LOGICITY Hisayama
LOGICITY Wakamiya
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

32,00021,06019,610
6,633
10,000
5,300
2,400
1,130
3,550

14.5%
9.6%
8.9%
3.0%
4.5%
2.4%
1.1%
0.5%
1.6%

May 1, 2015

4,457

2.0%

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

14,600
11,200
4,400
7,000
5,900
2,600
2,800
4,230
3,290

6.6%
5.1%
2.0%
3.2%
2.7%
1.2%
1.3%1.9%
1.5%

Jun.1, 2021

7,700

3.5%

Mar. 1, 2022
Mar. 28, 2023
Sep. 1, 2023
Sep. 1, 2006
Dec. 20, 2007
Mar. 1, 2012
Mar. 1, 2013
Nov. 4, 2014
Apr. 27, 2023
Mar. 1, 2013
Dec. 7, 2018
Mar. 28, 2014
Mar. 27, 2015
Jun. 1, 2017
Jun. 30, 2020
－4,3201,450
14,100
2,060
1,111
1,280
2,800
1,100
1,525
1,530
2,835
1,250
8,150
5,050
1,700
220,121

2.0%
0.7%
6.4%
0.9%
0.5%
0.6%
1.3%
0.5%
0.7%
0.7%
1.3%
0.6%
3.7%
2.3%
0.8%
100.0%(Note1) All figures in the acquisition price column indicate the acquisition price written in the sales agreement between FRC andthe seller, and exclude charges, taxes and other expenses.
(Note2) The ratio is rounded off to one decimal places.
(Note3) For Marinoa City Fukuoka (Marina Side Building) (Land with leasehold interest), the land acquisition price at the time of- 12 -

acquisition (May 1, 2015), which is the amount of the property’s acquisition price after the building acquisition price of 792
million yen is subtracted, is shown as the acquisition price.

- 13 -