EARNINGS BRIEFING FOR THE PERIOD ENDED AUGUST 2018 Name of issuer: Code number: URL: Stock listings: Representative: Asset manager: Representative: Contact: Fukuoka REIT Corporation (FRC) 8968 https://www.fukuoka-reit.jp/eng/ Tokyo Stock Exchange, and Fukuoka Stock Exchange Etsuo Matsuyuki   CEO & Representative Director Fukuoka Realty Co., Ltd. Etsuo Matsuyuki CEO & Representative Director Akira Eguchi Executive Managing Director and General Manager of Planning Dept. Phone: +81-92-272-3900 Expected date for submitting securities report: Expected commencement date of dividend payments: Supplementary documents for earnings briefing Yes Analyst meeting (for institutional investors and analysts)  Yes November 29, 2018 November 16, 2018 (Figures rounded down to nearest mm yen) Performance and situation of assets for the period ended August 2018 1. (March 1, 2018 to August 31, 2018)
Forecast of performance for the period ending February 2019 (September 1, 2018 to February 28, 2019) and the period ending August 2019 (March 1, 2019 to August 31, 2019) Forecast profit per unit:    Period ending August 2019 3,550 yen
3. Other
(1) Changes in accounting policies, changes in accounting estimates and restatement of accounting errors Changes in accounting policies accompanying amendments to accounting standards, etc.:  No No (ii)   Changes in accounting policies other than above (i): (iii) Changes in accounting estimates: No (iv) Restatement of accounting errors: No (2) Number of investment units outstanding (i) As of August 2018 796,000 units As of February 2018 747,000 units (ii) Treasury investment units at end of period: As of August 2018 0 unit As of February 2018 0 unit Number of investment units outstanding at end of period (including treasury investment units): Note:  Regarding the number of investment units, a basis for calculating profit per unit, please refer to "Per unit information," on page 11. * Statement on Implementation Status of Audit Procedure This Earnings Briefing ("Kessan Tanshin" in Japanese) report is outside the scope of the auditing procedure under the Financial Instruments and Exchange Act. As of the publication of this report, no auditing procedure under the Financial Instruments and Exchange Act has been completed for the financial statements. * 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, and dividend 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 please refer to "2. Portfolio Management Policy and Management Situation, (2) Management situation – Preconditions for the performance forecast for the period ending February 2019 (September 1, 2018 to February 28, 2019) and the period ending August 2019 (March 1, 2019 to August 31, 2019)" on page 4. 2. Concerning the contents hereinafter, items that FRC judges "can be omitted from the disclosure from the standpoint of importance" are not shown in conformity with the "Format and Guidance for Preparation of Earnings Briefing for REITs" (February 2018).
1. Investment Corporation-Related Organizations
The disclosure is omitted, since there are no significant changes from the "Structure of the investment corporation" disclosed by the latest securities report (submitted on May 29, 2018).
2. Portfolio Management Policy and Management Situation
(1) Portfolio management policy The disclosure is omitted, since there are no significant changes from "Investment policy," "Investment target" and "Dividend policy" disclosed by the latest securities report (submitted on May 29, 2018). (2)  Management situation (i)    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 Group 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 such as Retail in Canal City Hakata (excluding some areas of specialty shops, hotels, theaters, offices and common space), a commercial complex where specialty shops, cinema complex, theaters, amusement facilities, hotels and offices are integrally developed (hereinafter "Canal City Hakata"). As of the end of the current fiscal period (August 31, 2018), FRC manages a total of 28 properties comprising 11 Retail, 8 Office buildings and 9 Others. (b)  Investment environment and portfolio performance During the fiscal period under review (the 28th fiscal period), the Japanese economy showed a modest recovery. Looking ahead, with the employment and income environment continuing to improve, the economy is expected to continue recovering moderately due to various political measures proving effective, among other factors. In the Fukuoka and Kyushu area, the core investment target area for FRC, the economy is expanding moderately at a solid pace. With regard to the outlook, a virtuous cycle is expected to continue, bolstered by demand in and outside Japan. As for land price trends, the national average price in combined average for residential and commercial land took an upward turn for the first time in 27 years, according to the 2018 Land Market Value Publication. By land type, residential land price continued to show a decelerating pace of decrease and commercial land price rose for the second consecutive year, reinforcing its upward trend. In Fukuoka City, the central area of FRC's investment targets, land prices continued rising for six consecutive years, up 11.1% year-on-year for commercial land and up 4.4% year-on-year for residential land, marking higher rates of increase than the last year. Under such circumstances, FRC acquired Konoha Mall Hashimoto and Higashi Hie Business Center II on March 1, 2018 as well as Park Place Oita Daiichi Parking on July 6, 2018. Park Place Oita Daiichi Parking is part of the parking lots for customers at Park Place Oita, a property already owned by FRC, and is located nearest to the center of Park Place Oita among the parking lots outside the property's premises. As for existing properties, FRC continued its efforts to reinforce competitive advantages and customer drawing ability at Canal City Hakata and other major retail properties, and focused on maintaining and increasing the occupancy rate of its owned properties. As a result of these endeavors, the average occupancy rate of all properties FRC owns was 99.6% at the end of the 28th fiscal period. When analyzing FRC's portfolio (on an acquisition price basis) as of the end of the 28th fiscal period by investment target area, the investment ratio in the Fukuoka urban area accounted for 78.4%; when analyzing by property type, Retail, Office buildings, and Others accounted for 60.1%, 27.3% and 12.6%, respectively. (c)  Summary of fundraising In the 28th fiscal period, FRC issued new investment units (49,000 units) on March 1, 2018 to raise 7,795 mm yen. FRC also borrowed funds to acquire the above-mentioned properties, among other purposes, and conducted refinancing. As a result, the balance of its interest-bearing debt outstanding (including investment corporation bonds) at the end of the period totaled 75,500 mm yen, with the loan-to-value ratio (ratio of l interest-bearing debt (including investment corporation bonds) to total assets) at 39.1% and the ratio of fixed-interest rate debt (ratio of interest-bearing debt with fixed interest rates (including investment corporation bonds) to total interest-bearing debt) at 90.9% as of the same date. In the fiscal period under review, FRC issued its third series of investment corporation bonds with debt maturity of 20 years, in pursuit of dispersion of debt repayment dates and extension of the average remaining years to maturity. In like manner, FRC will continue its endeavors going forward 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.
Furthermore, as announced in the "Notification Concerning the Withdrawal of Credit Rating" dated August 31, 2018, FRC requested S&P Global Ratings Japan Inc. (S&P) to withdraw the long-term issuer rating and short-term issuer rating granted to FRC by the agency. (d)  Summary of performance and dividend As a result of these management efforts, operating revenues totaled 9,178 mm yen and operating income after excluding operating expenses such as expenses related to leasing business and asset management fees totaled 3,238 mm yen. Ordinary income was 2,861 mm yen and profit amounted to 2,860 mm yen. Management decided to make a dividend of 3,593 yen per investment 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 law, an investment corporation is allowed to deduct the maximum amount of dividends paid to investors from its taxable income.
(ii)   Forecast for the next fiscal period
(a)  Portfolio management policy
FRC will further reinforce management and leasing capabilities by cooperating with property management companies including sponsor companies, and secure and maintain the stable operation of the properties by making the most use of their advantages. FRC will make investments based on the basic policy stipulated in its Articles of Incorporation and its basic philosophy: focusing on "specialized areas in which FRC can demonstrate its competitive edge" that are in "high growth potential markets." 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 with the local business community 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 2019 (September 1, 2018 to February 28, 2019) and the period ending August 2019 (March 1, 2019 to August 31, 2019). Concerning preconditions for the forecast, please refer to "Preconditions for the performance forecast for the period ending February 2019 (September 1, 2018 to February 28, 2019) and the period ending August 31, 2019 (March 1, 2019 to August 31, 2019)" on page 4.
Note:   The above forecast figures are calculated based on certain preconditions. The forecast should not be construed as a guarantee 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.

(3)  Investment risks
The disclosure is omitted, since there are no significant changes from the "Investment risks" disclosed in the latest securities report (submitted on May 29, 2018).
3. Financial Statements

Fukuoka REIT Corporation (8968); Earnings Briefing for the Period ended August 2018
Fukuoka REIT Corporation (8968); Earnings Briefing for the Period ended August 2018

(3) Statement of changes in net assets

28th fiscal period (March 1, 2018 to August 31, 2018)

(4) Dividend statement

(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 29, 2018). (8) Notes to financial statements FRC omits the disclosure of notes to balance sheet, statement of income, 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.
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.
(Significant subsequent events) No relevant items. (9) Change in the number of investment units outstanding
(Note 2) New investment units were issued through private offering at the issue price of 500,000 yen per unit for the purpose of procuring funds for acquiring new properties, etc. (Note 3) New investment units were issued through public offering at the issue price of 880,000 yen per unit (paid-in amount of 849,200 yen) for the purpose of procuring funds for acquiring new properties, etc. (Note 4) New investment units were issued through third-party allotment at the paid-in amount of 849,200 yen per unit. (Note 5) New investment units were issued through public offering at the issue price of 766,360 yen per unit (paid-in amount of 739,772 yen) for the purpose of procuring funds for acquiring new properties, etc. (Note 6) New investment units were issued through public offering at the issue price of 576,083 yen per unit (paid-in amount of 557,078 yen) for the purpose of procuring funds for acquiring new properties. (Note 7) New investment units were issued through public offering at the issue price of 710,580 yen per unit (paid-in amount of 686,529 yen) for the purpose of procuring funds for acquiring new properties, etc. (Note 8) FRC implemented a 5-for-1 split of its investment units. (Note 9) New investment units were issued through public offering at the issue price of 212,257 yen per unit (paid-in amount of 205,290 yen) for the purpose of procuring funds for acquiring new properties, etc. (Note 10) New investment units were issued through public offering at the issue price of 164,414 yen per unit (paid-in amount of 159,102 yen) for the purpose of procuring funds for acquiring new properties, etc. 4. Change in Directors (1) Change in directors in FRC No relevant items. (2) Change in directors at Fukuoka Realty Co., Ltd. Tomoyuki Aramaki retired from the post of Director (as of June 22, 2018). Yoshiro Watanabe was newly appointed as Director (as of June 22, 2018).

5. Reference Information

for school and work, according to the 2015 census, which states "the number of workers and students aged 15 years or older (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 and Communications. "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 in trust 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 to the total amount of assets.
(2) Investment assets (i) Primary issues of investment securities No relevant items. (ii) Real estate investment portfolio No relevant items.
Note 3: the method and standards for asset evaluation stipulated in FRC's Articles of Incorporation and rules stipulated by the Investment Trusts Association, Japan. "Investment ratio" is obtained by dividing each property's acquisition value by the total acquisition value. The total of individual percentages in the above table may not equal 100%, since the figures are rounded off to one decimal place. Park Place Oita Daiichi Parking, which FRC acquired on July 6, 2018, is included. The same shall apply hereafter. Note 4:
Note 2: Note 3: Note 4: Note 5: Note 6: sections stipulated in the tenancy agreements with end tenants is shown in parentheses. The Taihaku Street Business Center is an office building with a residential tower. Its number of end tenants comprises 12 offices and 55 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 are rounded off to one decimal place. The figures are not disclosed as no consent to disclosure has been obtained from the tenants.
(3)  Investment target
The disclosure is omitted, since there are no significant changes from the “Investment target” disclosed by the latest securities report (submitted on May 29, 2018).