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Fukuoka REIT Corporation
Introduction of Our REIT （8968）
http://www.fukuoka-reit.jp
Investment Highlights
Opportunity to invest
in a select retail/office
portfolio in the region.
Growing Fukuoka area
backed by strong
inflow of
younger population.
Sophisticated
AM/PM team
with strong
local business support.
2
Right timing to
invest in Fukuoka.
Profile
Company Profile
• Company
• Asset Management Company
• Sponsors
• Listed date
Fukuoka REIT Corporation
Fukuoka Realty
Fukuoka Jisho, Kyushu Electric Power, Royal Holdings, The Bank of Fukuoka,
The Nishi-Nippon City Bank, Nishi-Nippon Railroad, Saibu Gas, Kyudenko,
Kyushu Railway Company
6/21/2005 (Tokyo Stock Exchange, Fukuoka Stock Exchange)
Financial Highlights
• Equity Market Cap
• Total Debt
• Debt Ratings
JPY 94,593 million (as of 2/28/2006)
JPY 33,700 million (as of 2/28/2006)
A- (S&P)
Dividend Information
•
•
•
•
Previous Fiscal Period End
Cash Dividend (actual)
Yield (actual)
Yield Gap (actual)
2/28/2006 (semi-annually, every February and August)
JPY 18,438 per share
4.19% (as of 4/17/2006)
2.24% (Comparison with 10-year JGB as of 4/17/2006)
Current Pricing
•
•
•
•
Stock Price
Outstanding Units
52 Week High
52 Week Low
JPY 887,000 (as of 4/17/2006)
92,050
JPY 910,000 (6/21/2005)
JPY 763,000 (9/15/2005)
Portfolio Summary
•
•
•
•
•
3
Asset Types
Asset Areas
Properties
Total Leasable Area
Occupancy
Retail 64.6%, Office 35.4% (as of 2/28/2006)
Kyushu, Japan (mainly Fukuoka metropolitan area)
7 (as of 2/28/2006) Two more properties newly acquired on march 2006
260,470.9 m2 (as of 2/28/2006)
99.0% (as of 2/28/2006)
Summary
“Act Local,
Think Global”
“A Leader in Population
Growth”
o Japan’s first region-specific REIT
o The Fukuoka metropolitan area boasts the top population
growth rate of the four largest metropolitan areas in Japan
o Vibrant, new and large properties represented by
“Vibrant,
New and Large”
Canal City Hakata
o Pipeline support by the Fukuoka Jisho Group, Kyushu’s largest
“Proactive Sponsorship
by Kyushu’s
Business Leaders”
4
integrated developer
o Proactive participation by leaders of Kyushu’s business world
including Kyushu Electric Power
Concept
: : :
A c t
L o c a l ,
T h i n k
G l o b a l
: : :
Concept
Hometown
Portfolio
Strategy
Appendix
Concept: Characteristics of Fukuoka REIT
1
Act Local, Think Global
2
Differentiated Risks and Standout Returns
Fukuoka REIT is primarily focused on retail properties in Fukuoka and Kyushu, giving it
differentiated risk and standout return characteristics that differ from REITs investing in the Tokyo
metropolitan office market
6
Hometown
: : :
A
L e a d e r
i n
P o p u l a t i o n
G r o w t h
: : :
Concept
Hometown
Portfolio
Strategy
Appendix
Hometown: Where is Fukuoka/Kyushu
Tokyo
Osaka
8
Kyushu Region
Fukuoka Pref.
■ 7 prefectures
■ “#16” GDP in the world
■ 14mm Population
■ Industry
－Semiconductor
－Automotive
－Processed food
products
■ 1.5h flight from Tokyo, Seoul,
Shanghai
■ Population: 2.47mm
(Metropolitan Area), 5mm
(Pref.)
■ Strong history of commerce with
Korea and China of more than
1,000 years
Kyushu, Westernmost Island of the 4 Main Japanese Islands, is the Closest to Asia
Concept
Hometown
Portfolio
Strategy
Appendix
Hometown: Size of the Fukuoka Metropolitan Area
Populations of Major Japanese Metropolitan Areas
Fukuoka Metropolitan Area
Fukuoka City and municipalities from which 10% or more of the population
commutes to school or work in Fukuoka City
Fukuoka City population: 1.34 million
Fukuoka metropolitan area population: 2.37 million
Tokyo
Metropolitan Area
30.28 million people
osaka
Metropolitan Area
12.20 million people
Fukuoka
Metropolitan Area
2.47 million people
Nagoya
Metropolitan Area
5.46 million people
Source：Tabulated by the Japan Economic Research Institute based on
the 2000 National Census conducted by the Ministry of Internal Affairs
and Communications
9
Fukuoka is the Fourth Largest Metropolitan Area in Japan following Tokyo, Osaka and Nagoya
Concept
Hometown
Portfolio
Strategy
Appendix
Hometown: Estimated Future Population Changes
Projected Future Values
Actual Values
150
Actual values from
national census
140
Medium estimates of the
National Institute of
Population and Social Security
Research
Tokyo Metropolian Area
Nagoya Metropolitan Area
Osaka Metropolitan Area
130
Fukuoka Metropolitan Area
Nation Wide
120
110
100
90
1985
1990
1995
2000
2005
2010
2015
2020
2025
2030
Source:
Fukuoka Shintoshin Kaihatsu Co., Ltd. prepared based on the established national census figures of the Ministry of Internal Affairs and
Communications (MIC) for 1985-2000, unverified figures for the 2005 national census by MIC, Estimated Future Japanese Population
(medium estimates) of the National Institute of Population and Social Security Research compiled in January 2002 and December 2003
figures for the “Estimated Future Population of Japanese Municipalities” issued by the same body.
Note) Graph formed after establishing the national and municipal populations in 1985 as 100
10
Fukuoka Metropolitan Area’s Population will Continue to Grow
Concept
Hometown
Portfolio
Strategy
Hometown: Size of the Kyushu Economy
Country Comparison of Kyushu’s GDP
Source： Global Statistics 2005: National Economic Figures issued by the Statistics
Bureau of the Ministry of Internal Affairs and Communications and the
2002 Prefectural Citizens Economic Figures issued by the Cabinet Office’s
Economic and Social Research Institute
International Comparison of Kyushu Economy with Countries
Note:
11
Kyushu’s land area is based on investigations by Japan’s Geographic Survey Institute. Figures of foreign countries are those of 2000.
Kyushu’s population is based on the Citizen Registers of 2004. Those of foreign countries are estimates of 2003.
Export and import values are for 2002 for both Kyushu and foreign countries, calculated at 1US$ = 122 yen.
Kyushu’s GDP is Near Australia’s in Size
Appendix
Concept
Hometown
Portfolio
Strategy
Appendix
Hometown: Kyushu’s Industries ～Automotives / IT
Distribution of Primary Automobile and IT
Companies in Kyushu
DENSO Kitakyushu Plant
(Kitakyushu City)
Toyota Motors Kyushu
(Wakamiya City, Fukuoka Prefecture)
Nissan Motor, Kyushu Plant
(Kanda-machi,Fukuoka Prefecture)
Toyota Motors Kyushu, Kanda Plant
(Kanda-machi, Fukuoka Prefecture)
Concentration of the Automobile Industry
(Trends of Toyota Parts Companies)
Recent Trends in Kyushu of Toyota Parts Companies
DENSO
Building a new diesel vehicle fuel injection
device plant at an investment of about 20
billion yen (Kitakyushu City)
AISIN SEIKI
Expanded the line of its subsidiary to
increase the car part production capacity
by 50% (Jonan Town, Kumamoto
Prefecture)
TOYOTA BOSHOKU
Built a new plant for interior materials of
doors, etc. and began operating it in
summer 2005. The investment was about
4 billion yen (Miyawaka City, Fukuoka
Prefecture)
TOYODA GOSEI
Opened a new plant that produces air bag
modules, etc. in September 2005
(Kitakyushu City)
KOITO
MANUFACTURING
Building a new plant for lighting equipment
to open in October 2006 (plan) (Saga City)
FUTABA
INDUSTRIAL
To open a new press component plant by
the end of this year (Nogata City, Fukuoka
Prefecture)
SHIROKI
Expanded plant for producing window
regulators (Kitakyushu City)
TOYOTA IRON
WORKS
Opened new press welded parts, etc. plant
in September 2005 (Miyawaka City,
Fukuoka Prefecture)
ROHM Fukuoka
(Yukuhashi City, Fukuoka Prefecture)
Power Device Division,
Mitsubishi Electronic
(Fukuoka City)
Daihatsu Auto Body
(Nakatsu City, Oita Prefecture)
Oita Canon
(Kunisaki City, Oita Prefecture)
Tokyo Electron Kyushu
(Tosu City, Saga Prefecture)
Toshiba, Oita Plant
(Oita Prefecture)
Nagasaki Technology Center,
Sony Semiconductor Kyushu
(Isahaya City, Nagasaki Prefecture)
Aishin Kyushu
(Jonan Town,
Kumamoto Prefecture)
NEC Kyushu
(Kumamoto Prefecture)
Honda Motor,
Kumamoto Plant
Asahi Kasei
Microsystems Kyushu
(Nobeoka City,
Miyazaki Prefecture)
Fuji Photo Film
(Kikyuyo Town,
Kumamoto Prefecture)
Fujitsu Integrated
Microtechnology, Kyushu Plant
(Satsuma-Sendai City, Kagoshima
Prefecture)
Miyazaki Oki Electric
(Kiyotake Town, Miyazaki Prefecture)
KYOCERA Corporation Kagoshima
Kokubu Plant
(Kirishima City, Kagoshima Prefecture)
Automobile
IT
12
Rich in Human Resources and Blessed by Nature,
Kyushu Has a Huge Connection of Semiconductor and Automotive Plants
Concept
Hometown
Portfolio
Strategy
Appendix
Hometown: Land Price Trends
Highest Land Prices in Commercial Areas:
Year-on-Year Variation
Year-on-year Fluctuation of Highest Land
Prices in Commercial Areas
(yen per ㎡）
（％）
30
30,000,000
25,000,000
20,000,000
Tokyo
Nagoya
Osaka
Sapporo
Sendai
Hiroshima
Fukuoka
Tokyo
Nagoya
Osaka
20
Fukuoka
Tokyo
10
Sendai
Sapporo
Hiroshima
0
15,000,000
-10
10,000,000
5,000,000
Osaka
Nagoya
Fukuoka
Tokyo
Nagoya
Osaka
Sapporo
Sendai
Hiroshima
Fukuoka
-20
-30
Sapporo
Sendai
-0.4
0
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
1997
1998
1999
2000
2001
Source : Official Announcement of Land Price by the Ministry of Land, Infrastructure and transport
13
Fukuoka Land Prices Are Following the Path of Tokyo
2002
2003
2004
2005
2006
Concept
Hometown
Portfolio
Strategy
Appendix
Hometown: Land Price Trends
Fukuoka City (2004-2005)
Year-on-year variation (%)
Source: the Ministry of Land, Infrastructure and Transport
14
Concept
Hometown
Portfolio
Strategy
Appendix
Hometown: Land Price Trends
Fukuoka City (2005-2006)
Year-on-year variation (%)
Source: the Ministry of Land, Infrastructure and Transport
15
Portfolio
: : :
V i b r a n t ,
N e w
a n d
L a r g e
: : :
Concept
Hometown
Portfolio
Strategy
Appendix
Portfolio: Portfolio Table
Property
Use
Investment
Rate
Age
(%)
(Note1)
Acquisition
(as of 2/28/2006)
Appraisal
Value
(mm yen)
Price
(mm yen)
（％）
Tenants
(Note2)
Floor
Area
（㎡）
(Note3)
Canal City Hakata
Retail
9y 10m
37.5
32,000
32,600
6.0
24
51,482.82
Park Place Oita
Retail
3y 10m
18.4
15,700
17,100
6.5
80
75,500.03
SunLiveCity Kokura
Retail
11m
7.8
6,633
6,770
6.6
1
58,642.38
Retail
33y 8m
0.9
740
750
7.1
4
3,041.92
64.6
55,073
57,220
－
109
Kominedai
Community Mall
Retail property total
－
－
Total
Leasable
Area
（㎡）
47,909.65
Lease
Area
（㎡）
Occupancy
（％）
47,300.24
98.7
100,418.98
99.8
61,450.22
100.0
3,743.12
3,743.12
100.0
188,667.15
213,767.82
212,912.56
99.6
100,664.98
(Note4)
61,450.22
(Note4)
Canal City Business
Center Building
Office
9y 10m
17.1
14,600
15,000
6.2
41
32,733.03
23,011.91
21,514.89
93.5
Gofukumachi
Business Center
Office
2y 4ｍ
13.1
11,200
11,900
6.2
18
27,949.15
19,906.21
19,749.78
99.2
Sanix Hakata Building
Office
4y 11m
5.2
4,400
4,550
5.9
13
8,111.25
6,293.67
6,293.67
100.0
Office building total
－
－
35.4
30,200
31,450
－
72
68,793.43
49,211.79
47,558.34
96.6
Portfolio total
－
－
100.0
88,670
－
181
257,460.58
262,979.61
260,470.90
99.0
Weighted average
－
7y
－
85,273
12,182
(Note5)
－
－
－
Other Assets
Name
Acquisition
Price
Type of Assets
Estimated ＩＲＲ
（％）
（mm yen）
CCH Bridge
Senior Equity
Senior Equity
3,400
8.0
(Reference) *Properties newly acquired in March 2006 and after
Property
17
Acquisition Cap
Use
Taihaku Street
Business Center
Office
“City House Tenjin
Keyaki Street”
Residence
Age
Acquisition
Price
（mm yen）
Appraisal
Value
（mm yen)
－
－
－
－
(Note1) Based on acquisition price
(Note2) The acquisition cap is arrived at by dividing the appraised DCF net
cash flow at the time of acquisition by the acquisition price
(Note3) Entries in registry
(Note4) The registered area does not include indoor,unwalled parking lots, and the
leasable area does not include parking lots in principle. With Park Place Oita
and SunLiveCity Kokura, however,the leasable area includes some indoor
parking lots that are a part of leasepackages to Major tenants.
(Note5) Simple average
(Note6) Entries in certificate of confirmation
Acquisition
CAP（％）
(Note2)
Tenants
Floor Area
（㎡）
(Note3)
4y
7,000
7,150
6.0
65
20,379.82
Will be
completed on
Nov. 2007
1,111
1,120
5.4
42
3,531.37
(Note6)
Total Leasable
Area
（㎡）
14,651.87
－
Lease Area
（㎡）
14,452.55
－
Occupancy
（％）
98.6
－
Concept
Hometown
Portfolio
Strategy
Appendix
Portfolio: Investment Type Classified Table
Category
Key is to be located in popular downtown areas
Street shops, department stores and large specialty shops
Urban
Retail
Canal City Hakata
Suburban shopping center that draws customers from a wide area
Key is a size that provides a competitive advantage and the selection of
specialty shop tenants
Regional
Community
Class Ａ
Definitions and Keys
Park Place Oita
SunLiveCity Kokura
Shopping center linked to daily living
Road side category killers
Neighborhood shopping centers with bookstores, restaurants, etc.
built around a strong supermarket
Superior properties that satisfy unique Class A standards
(location, scale, specs, age and other categories and used
to make the acquisition decision)
Office
Kominedai
Community Mall
Sanix Hakata
Building
Canal City Business
Center Building
Taihaku Street
Business Center *1
Gofukumachi
Business Center
Leaseback to
blue-chip
Sale and leaseback transactions with local blue-tip firms
firms
Residence
Class Ａ
Location, spec, earthquake-resistant
 Well balanced in supply and demand for tenant type (families)
Residence
1.2%
Other
Kyushu area
*1 Acquired on March 16, 2006
*2 Contract awarded on March 31, 2006
Office
24.8%
Fukuoka
Urban area
75.2%
18
City House Tenjin
Keyaki Street *2
39.8%
Retail
59.0%
Concept
Hometown
Portfolio
Strategy
Appendix
Portfolio: Portfolio Summary
(as of February 2006)
Top Ten tenants
Variance of the Exp. Date of Rental Period
（Based on the lease area）
（Based on the lease area）
35%
Others
28.2%
30%
SunLive
23.6%
25%
20%
Canal City OPA
2.2%
JUSCO
22.5%
T・Joy
2.2%
Sanyo Shimpan
2.3%
United Cinema
2.8%
15%
10%
5%
Comme Ca Store
3.0%
Sports Authority
3.2%
Washington
Hotel
4.9%
Lease Format
（Based on rents）
0%
K's Denki
5.2%
1
2
3
4
6
7
8
9 10 11 12 13 14 15 16 17 18 19 20 21 22 (years)
Length of Lease Remaining
Portfolio Share by Property Age
（Based on the lease area）
（Based on acquisition price）
Over 10 years
0.9%
Variable rent
1.8%
Less than
5 years
19
5
23.3%
Fixed Rent
+
Variable Rent
Fixed Rent
42.4%
55.8%
years to less 5
than 10 years
10.1%
years 10
or more
66.6%
Under 5 yrs
39.3%
years to 5
less than 10
years
59.8%
Concept
Hometown
Portfolio
Strategy
Portfolio: Overview of Canal City Hakata
Characteristics
• Acquisition of about 40%* of
total 200,000m2 urban mall
in the heart of Fukuoka City
*including Canal City Business Center Building
• Renowned tourist destination
in Fukuoka with over 10
million visitors a year
• Distinguished design by Jon
Jerde renowned for his work
on Las Vegas’ Fremont Mall
and Tokyo’s Roppongi Hills
Overview
•Address
•Total leasable area
•Built
•Property manager
20
Main Stores
1-chome, Sumiyoshi, Hakata
Ward, Fukuoka City
47,909.65 m2
April 15, 1996
Fukuoka Jisho Co., Ltd.
•Washington Hotel
•Comme Ca Store
•United Cinema （cinema complex）
•OPA （Canal City OPA）
•Sports Authority
Appendix
Concept
Hometown
Portfolio
Strategy
Appendix
Portfolio: Canal City Hakata – One of the Largest Entertainment Retail Properties in Japan
The portion owned by
Fukuoka REIT
Corporation is
comprised of Canal
City Business Center
Building, United
Cinema, Canal City
Fukuoka Washington
Hotel, Club Sega,
Ramen Stadium 2,
Mega Store Building,
etc. (indicated in image
to the left).
(million yen)
Gross Sales History at Canal City Hakata
Comparison with Sales Trends at
Department Stores In Fukuoka City
(%)
140
120
100
80
60
40
Dept Store in Fukuoka
Canal City Hakata
20
Ju
ly
Au
Ju
ne
ril
ay
M
Ap
gu
Se
st
pt
em
be
r
O
ct
ob
er
N
ov
em
be
D
r
ec
em
Ja
b
nu
er
ar
y
20
06
Fe
br
ua
ry
M
21
ar
ch
20
05
0
Concept
Hometown
Portfolio
Strategy
Appendix
Portfolio: New Acquisition ～CCH Bridge Senior Equity
As of 2/27/2006
• Acquisition Price: JPY3,400 mm
• Estimated IRR: 8%
Characteristics
*The portion framed in white is that possessed by the Canal City Hakata SPC
22
• An option contract to acquire the “Canal City Hakata
SPC Section” of the subject real estate was also
signed simultaneously (Pledge of future transfer at a
price appraised by the Tanizawa Appraisal Office or
the Japan Real Estate Institute, and this call option
only possessed by Fukuoka REIT is the only option
fulfillment right)
• Main tenants of the Canal City Hakata SPC Section
・ Top luxury hotel in the region:
Grand Hyatt Fukuoka (370 guest rooms)
・ OPA Shopping Mall
(more than 100 specialty shops)
・ One of the largest MUJI (Mujirushi Ryohin)
Stores in Kyushu
・ Fukuoka City Theater of Shiki Theater
Company
Concept
Hometown
Portfolio
Portfolio: Overview of Park Place Oita
Characteristics
• Part of new town
development next to Oita
Prefectural Sports Park
(World Cup Soccer Stadium)
• Near Oita-Mera Interchange
with parking for about 4,000
cars
• Designed as an open mall in
a forest by Jon Jerde
Overview
•Address
•Total leasable area
•Built
•Property manager
23
Main Stores
2-chome, Koen Dori Nishi, Oita City
100,664.83m2
March 26, 2002; April 17, 2002;
April 28, 2004
FJ Real Estate
•Jusco
•K’s Denki
•T Joy
•Sports Authority
•Plaza Capcom
Strategy
Appendix
(as of March 31, 2006)
Concept
Hometown
Portfolio
Strategy
Portfolio: Overview of Park Place Oita
Gross Sales History at Park Place Oita
(million yen)
3,000
2,000
Home ground of the Oita
Trinita J-League soccer team
Park Place Oita Koen Street Housing
Development
1,000
2005/2
2004/3～
2006/2
2005/3～
500
656 lots have been sold.
Development of another
604 lots is planned.
March
May
July SeptemberNovember January
April
June
August October December February
(Note) Tabulation of monthly sales for respective stores of Park Place Oita
（%）
Comparison with Sales Trends at Large-scale
Retail stores in Kyushu
120
100
80
60
40
Large-scale Retail Store in
Kyushu
Park Place Oita
20
be
r
No
ve
mb
er
De
ce
mb
er
Ja
nu
ary
20
06
Fe
bru
ary
mb
er
Oc
to
ust
Se
p te
Ju
ly
Au
g
Ju
ne
l
Ap
ri
20
05
Ma
rc h
Ma
y
0
24
Oita Big Eye
(World Cup Stadium),
1,500
0
(as of March 31, 2006)
Park Place Oita
Mall with about 140 specialty
shops including Jusco and the T
Joy cinema complex
2,500
Appendix
Source: Year-on-year graph of sales at Kyushu’s large retail stores based on
the “Commercial Sales Statistics” issued by the Ministry of Economy, Trade and Industry.
（Note） Some parts differ from today as
the drawing is a plan drawn up by
the Fukuoka Jisho Group upon
launch of the development.
Concept
Hometown
Portfolio
Strategy
Portfolio: Property Overview
SunLiveCity Kokura
Characteristics
 Lies along National Highway #10 and near the Kokura Higashi
Interchange on the Kyushu Expressway with parking for about
2,000 cars
 Leading regional mall in Kitakyushu region with about 110
specialtytores centering on the SunLive Supermarket
 Core development in the Kami Kuzuhara Rezoning District
(about 66,000 m 2), a large commercial zone
Main tenants
 SunLive
Kominedai Community Mall
Characteristics
 Located along the main thoroughfare National Highway 211 and
right in front of the Komine Interchange Exit on Kitakyushu
Urban Expressway No. 4
 The center of the about 8,000m 2 site has a sufficient single level
parking lot
 Comprised of four tenants centering on a community entrenched
fresh food supermarket
Main tenants
 Super Kyowa
 Daiso
 Gusto
 Mister Donut
25
Overview
• Address: 2-chome, Kami Kuzuhara, Kokura Ward,
Kitakyushu City
• Total leasable area: 61,450.22m 2
• Built: March 17, 2005
• Property manager: Fukuoka Jisho Co., Ltd.
Overview
 Address: 1-chome Kominedai, Yahatanishi Ward,
Yawata, Kitakyushu City
 Total leasable area: 3,743.12m 2
 Constructed: June 3, 1972, March 15, 1997, May 12,
1997 and June 9, 1997
 Property manager: Fukuoka Jisho Co., Ltd.
Appendix
(as of March 31, 2006)
Concept
Hometown
Portfolio
Strategy
Portfolio: Overview of Gofukumachi Buisiness Center
Characteristics
 Excellent location at the corner of
Meiji Dori and Taihaku Dori,
directly connected to Gofukumachi
Subway Station
 Designed by Michael Graves,
designer of the Museum of New
York
 Top Quality Specs in Region
•1 floor: 620 tsubos
•Ceiling height: 2,900mm
•Optic fiber cables
• Sanyo Shimpan, NTT Marketing
Act, Sony Life Insurance and other
leading firms use the premises as
a call center
Overview
• Address
• Total leasable area
• Built
• Property manager
26
Main Tenants
Kami Gofukumachi, Hakata
Ward, Fukuoka City
19,906.21m2
October 16, 2003
Fukuoka Jisho Co., Ltd.
•
•
•
•
•
Sanyo Shimpan
NTT Marketing Act Kyushu
Sony Life Insurance
Suntory
Sunny
Appendix
Concept
Hometown
Portfolio
Strategy
Portfolio: Property Overview
(as of March 31, 2006)
Canal City Business Center Building
Characteristics
 Pioneer of multi-use complexes
 Synergy between popularity and name recognition of Canal City
Hakata
 Used by TOTO Ltd. as Fukuoka office and showroom
Main tenants
• TOTO
• Bell System 24
• USEN Corporation
• Aflac Japan
• Mitsubishi Electric Building
Techno-Service
Overview
• Address: 1-chome, Sumiyoshi, Hakata Ward,
Fukuoka City
• Total leasable area: 23,011.91m 2
• Built: April 15, 1996
• Property manager: Fukuoka Jisho Co., Ltd.
Sanix Hakata Building
Characteristics
 Two-minute walk from Hakata Station (Shinkansen), and Fukuoka
Airport is a mere five-minute subway ride away
 The concentration of hotels and government offices surrounding
the building make it an optimal location for business
 High-quality and flexible specifications:
Free access floors / independent air conditioning systems
Each floor can be partitioned / optical fiber cables
Main tenants
• Sanix
• The Nishi-Nippon City Bank
• ROHM
• Idemitsu Kosan
27
Appendix
Overview
• Address: 2-chome, Hakataeki Higashi, Hakata
Ward, Fukuoka City
• Total leasable area: 6,293.69㎡
• Built: March 31, 2001
• Property manager: Fukuoka Jisho Co., Ltd.
Concept
Hometown
Portfolio
Strategy
Portfolio: Property Overview
(as of March 31, 2006)
Taihaku Street Business Center
Characteristics
• Superbly located with excellent accessibility / ten-minute walk
from Hakata Station and a two-minute walk from Subway Station
• Leading exemplary functional space for Fukuoka City office
buildings:
The333-tsubo floor can be partitioned / 2.7m ceiling height
Independent air conditioning systems / Optional cables
• Luxurious 59-room residential tower
Main tenants
• NTT Comware
• The Tokio Marine Nichido
• Outsourcing Business
• Yokogawa Electric
• Fujitsu Network solutions
• Tokio Marine & Nichido Life
Overview
• Address: 3-21 Gokushomachi, Hakata Ward,
• Fukuoka City
• Total leasable area: Office Tower: 11,244.49㎡
•
Residential Tower:3,427.38㎡
• Built: March 7, 2002
• Property manager: Fukuoka Jisho Co., Ltd.
City House Tenjin Keyaki Dori
Characteristics
 Near the Tenjin district with good access
 New rental condominium in a popular residential area with
excellent living convenience
 15-minute walk from the Nishitetsu Fukuoka Station on the
Nishitetsu Tenjin Omuta Line, 9-minute walk from Akasaka
Station on the Municipal Subway Line and 11-minute walk
from Sakurazaka on the same line
• Planned to have 13 stories above ground (total floor area of
3,531.37m2) and have thirty 2LDK units (about 58m2 per)
and twelve 3LDK units (about 75m2 per unit)
• Earthquake resistance structure for high safety and security
28
Appendix
Overview
 Address:
Kego 2-chome, Chuo Ward, Fukuoka City
 Total floor area: 3,531.37m2
 Scheduled completion date: November 30, 2007
 Property manager: DMC Co., Ltd. (a member of the Daio
Group, a giant residential management
company in the Tenjin area)
Concept
Hometown
Portfolio
Strategy
Appendix
History of Occupancy Rate by Property
Canal City Hakata
(%)
Park Place Oita
(%)
98.7％
80
99.8％
80
60
60
40
40
40
20
20
20
0
0
2005.9
2005.1
2005.11
2005.12
2006.1
2005.9
2006.2
2005.1
2005.11
2005.12
2006.1
(%)
100
100.0％
2005.11
2005.12
2006.1
2006.2
Canal City Business Center Building
80
60
60
40
40
20
20
0
2005.9
(%)
100
2005.1
100
80
2005.1
2005.11
2005.12
2006.1
98.6％
2005.9
Sanix Hakat Building
(%)
100
(%)
100.0％
80
60
40
40
40
20
20
20
0
2005.1 2005.11 2005.12 2006.1 2006.2
※ as of March 2006
2006.3
2005.11
2005.12
2006.1
2006.2
Gofukumachi Business Center
99.2％
80
60
2005.9
2005.1
100
60
0
93.5％
0
2006.2
Taihaku Street Business Center ※
80
29
2005.9
2006.2
Kominedai Community Mall
(%)
100.0％
80
60
0
SunLiveCity Kokura
(%)
100
100
100
(as of February 2006)
0
2005.9
2005.1
2005.11
2005.12
2006.1
2006.2
2005.9
2005.1
2005.11
2005.12
2006.1
2006.2
Strategy
::: Proactive Sponsorship by Kyushu’s Business Leaders :::
Concept
Hometown
Portfolio
Strategy
Strategy: Investment Strategy
31
Focusing on Fukuoka Metropolitan Area & Retail Properties
Appendix
Concept
Hometown
Portfolio
Strategy
Strategy: External Growth Roadmap
32
Plan to Double our Asset Size by the End of 2008
Appendix
Concept
Hometown
Portfolio
Strategy
Appendix
Strategy: Proactive Support by Sponsors
(as of April 21, 2006)
Developments
of the Fukuoka Jisho Group
Riverwalk Kitakyushu
Marinoa City Fukuoka
Tenjin Kirameki-dori Building
(New Iwataya Building)
Hakata Ekimae
Business Center
Grand Hyatt Fukuoka
Hyatto Regency Fukuoka
DEODEO
Fukuoka Higashi Store
Nishijin Condominiums
◆Kyushu Railway Company
• Capital: 16,000 million
• Railway business, tourism, hotels, food services, real estate
(residence, station buildings) in Kyushu
Nexus Momochi
Residential Tower
(The above properties will not necessarily all be incorporated into our portfolio)
33
Leading Integrated Regional Developer + Seven Leading Companies of Kyushu Economy
(The above properties will not necessarily all be incorporated into our portfolio)
Concept
Hometown
Portfolio
Strategy
Appendix
Acquisition Strategies
Price: JPY
6,600 mm
Acquisition
CAP:
“Reasonable Price”
“High Quality”
6.6%
Price: JPY
1,100 mm
Acquisition
CAP:
5.4%
SunLiveCity Kokura （as of 7/1/2005）
City House Tenjin Keyaki Street
（as of 3/31/2006）
Price: JPY
4,400 mm
Acquisition
CAP:
Price: JPY
7,000 mm
Acquisition
CAP:
5.9%
6.0%
Sanix Hakata Bldg （as of 9/30/2005）
Price: JPY
700 mm
Acquisition
CAP:
7.1%
Kominedai Community Mall
（as of 12/20/2005）
Taihaku Street Business Center
（as of 3/16/2006）
Acquisitions from
Sponsors
Proactive Support by leading
integrated developer +
seven leading companies of
Kyushu economy
Newly Developed
by Sponsors
Acquire and develop
Mid-Size Community Malls
throughout Kyushu
*The acquisition cap is arrived at by dividing the appraised DCF net
cash flow at the time of acquisition by the acquisition price
34
Concept
Hometown
Portfolio
Strategy
Appendix
Strategy: Acquisition of Properties Newly Developed by Sponsors
35
Acquire and Develop Mid-Size Community Malls throughout Kyushu
Concept
Hometown
Portfolio
Strategy
Strategy: Revenue Growth by Value Added Renovation
Park Place Oita
Rooftop parking space turned into Kid’s park and 14 retail rental spaces
(Construction Overview)
 Construction period: October 2004 - April 2005 (Opened on April 23, 2005)
 Content: Leasable area increased by some 22,000m2 (+2.2%), tenants increased by 14 (+20%)
 Cost: Approximately 400 million yen
36
Strengthening the Differentiation Strategy of the “Park Entertainment” Concept
Appendix
Concept
Hometown
Portfolio
Strategy
Strategy: Revenue Growth by Value Added Renovation
Park Place Oita has increased revenue through creative renovation
37
Appendix
Concept
Hometown
Portfolio
Strategy
Appendix
Borrowings (the 3rd Fiscal period)
No.
1
Lender
Development Bank of Japan
Value
(million yen)
12,000
(as of February 28, 2006)
Interest Rate
Borrowing
date
Payment
deadline
Payment
method
2004.11.9
2009.8.31
Bullet
Payment
1.39%
Fixed
Yes
2005.6.29
2008.6.23
Bullet
Payment
0.59%
Variablr
Yes
2005.6.29
2006.6.23
Bullet
Payment
0.56%
Variable
Yes
Bullet
Payment
0.46%
Variable
Yes
Fixed /
Variable
Collateral
【Syndication Loan】
2
Aozora Bank（Agent）
1,000
The Bank of Fukuoka （co/arranger）
1,000
The Nishi-Nippon City Bank （ 〃 ）
1,000
The Oita Bank
700
The Iyo Bank
500
The Bank of Saga
500
The Eighteen Bank
500
The Miyazaki Bank
500
The Yamaguchi Bank
500
The Shinwa Bank
300
The Chikuho Bank
100
Syndication Loan Total
6,600
3
The bank of Fukuoka
4,900
4
The Nishi-Nippon City Bank
3,100
5
The Nishi-Nippon City Bank
3,700
2005.9.30
2006.3.31
6
The Nishi-Nippon City Bank
3,400
2006.2.27
2007.2.27
Ceilling 3,000
2005.6.29
2006.6.29
Commitment line
The Bank of Fukuoka
※Balance as of 2/28/2006
0
Weighed average
interest rate
Total
38
33,700
0.84%
Concept
Hometown
Portfolio
Strategy
Appendix
Financial Strategy
Term Ratio
-Long
term
55%
-Short
term
45%
Payment Deadline (100 mm yen)
Variable Ratio
140
120
Fixed
36%
Variable
64%
100
80
60
40
20
0
120
117
66
34
2006
2007
2008
2009
Repayment Period
Policy of the current term
◆Secure fund-raising methods with long-term fixed interest rates
◆Diversification of fund raising methods
•Issuance of Investment Corporation Bonds
•New deals with Mega banks, trust banks, and insurance companies
39
Fukuoka REIT Corporation
Long-Term Issuer Rating
Summary
“Act Local,
Think Global”
“A Leader in Population
Growth”
o Japan’s first region-specific REIT
o The Fukuoka metropolitan area boasts the top population
growth rate of the four largest metropolitan areas in Japan
o Vibrant, new and large properties represented by
“Vibrant,
New and Large”
Canal City Hakata
o Pipeline support by the Fukuoka Jisho Group, Kyushu’s largest
“Proactive Sponsorship
by Kyushu’s
Business Leaders”
40
integrated developer
o Proactive participation by leaders of Kyushu’s business world
including Kyushu Electric Power
Appendix 1
(Financial Data)
Concept
Hometown
Portfolio
Strategy
Financial Account Settlement Highlights
for the
3rd
Fiscal Period
3rd period results
2nd period results
(181 days)
September 1, 2005 –
February 28, 2006
(actual management period: 296 days)
Operating revenues
4,050 mm yen
5,857 mm yen
Ordinary profit
1,698 mm yen
1,859 mm yen
Net profit
1,697 mm yen
1,761 mm yen
Total distribution
1,697 mm yen
1,750 mm yen
18,438 yen
19,014 yen
94,593 mm yen
87,461 mm yen
50,865 mm yen
50,918 mm yen
53.8 %
58.2 %
Depreciation
562 mm yen
764 mm yen
Categ
ory
Data
Distribution per unit
Total assets
Net assets
Unitholders’ equity
Finan
cial
Indice
s
ROA
1.9%
Annual conversion
ROE
3.8%
3.3%
Annual conversion
LTV
42
September 1, 2004 –
August 31, 2005
6.7%
35.6%
Leasing NOI
2,654 mm
yen
Fund from operations
2,259 mm
Appendix
(as of February 28, 2006)
Distribution per unit
Settlement (above forecast)
18,438 yen
↑
Performance revision (February 17, 2006)
18,100 yen
↑
Forecast at start of period (October 27, 2005)
16,700 yen
Total assets
・Sanix Hakata Building
・Kominedai Community Mall
・Equity interest in silent partnership with
ownership interest in Canal City Hakata
Portfolio has grown by about 7 billion yen
through aggressive property acquisitions
Remarks (definition of indices)
Ordinary profit/(total assets at period start +
total assets at period end)/2
Calculated from the management days
of the 3rd fiscal period
Net profit/(total assets at period start +
total assets at period end)/2
Calculated from the management days (181)
of the 3rd fiscal period
Interest-bearing debt at period end/
total assets at period end
Real Estate leasing business revenues – real
estate
leasing business expenses + current
depreciation
Net profit + current depreciation
ROA & ROE
Fukuoka REIT boasts a profitability among
the highest of J-REITs
Concept
Hometown
Portfolio
Strategy
Appendix
Profit and Loss Statement for the 3rd Fiscal Period
(million yen)
3rd
Category
2nd
period results
period results
(181 days)
(actual management period: 296 days)
September 1, 2005 – February 28, 2006
September 1, 2004 – August 31, 2005
Value (yen)
Percentage
(%)
4,050
100.0
Percentage
(%)
Value (yen)
I. Operating profit and losses
1. Operating revenues
Real estate leasing revenues
Other revenue from real estate leasing
3. Operating expenses
Real estate leasing expenses
Asset management fees
Custodian fees
General administration fees
Director compensation
Other operating expenses
Operating profit
3,879
100.0
5,632
171
2,299
5,857
225
56.8
3,172
1,959
2,765
249
319
7
6
29
26
9
19
44
Interest received
Real Estate Leasing
Expenses
36
1,571
43.2
2,685
45.8
131
3.2
19
0.3
Consumption tax for tax exempt firm, etc.
Other non-operating revenues
128
－
3
19
184
Interest expense
133
273
New investment unit issuance cost
－
36
Expenses related to public offering of investment units
－
220
Expenses related to financing
Other non-operating expenses
Ordinary profit
Extraordinary loss
Net profit before tax
Income and other taxes
Net profit
Carried forward profit or (loss)
Unappropriated profit
Distribution per unit (yen)
Subcontracting costs
886
Repairs and maintenance
31
Recovery to former condition costs 24
Public charges
245
Liability insurance premiums
30
Depreciation
562
Other real estate leasing expenses 177
Total
1,959
0
2. Non-operating expenses
Amortization of establishment cost
43
0
Period-on-period (after adjustment for
length) increase of 109 million yen
due to acquisition of the Sanix Hakata
Building and Kominedai Community
Mall and increased revenues from
Park Place Oita
54.2
II Non-operating profit and loss
1. Non-operating revenues
Operating Profit
4.5
845
5
5
39
261
5
14.3
Consumption Tax
Consumption
tax
acceptance
earnings
generated since Fukuoka REIT was a tax
exempt operator (temporary development
limited to the 3rd period)
46
1,698
41.9
1,859
－
1,69
8
1
－
95
31.8
1.6
41.9
1,764
30.1
1,697
41.9
2
1,761
0
(11)
1,697
1,750
18,438 yen
19,014 yen
30.1
Net Profit
・Settlement (above forecast)
1,697 million yen
↑
・Performance forecast revision
(February 17, 2006) 1,666 million yen
↑
・Forecast at start of period
(October 27, 2005) 1,537 million yen
Concept
Hometown
Portfolio
Strategy
Appendix
Balance Sheet for the 3rd Fiscal Period
(as of February 28, 2006)
(million yen)
Category
3rd period
2nd period
(as of February 28,
2006)
(as of August 31,
2005)
Value
Share
(%)
Value
Share
(%)
Variation
Value
Cash and deposit in trust
Operating receivables
Consumption tax
receivables
Other current assets
Total current assets
Variation
(%)
817
607
2,585
2,781
(196)
132
181
(49)
1,595
－
75
4,218
154
4.5
5,531
6.3
(1,312)
－
Structure in trust
210
215
△5
Machinery and equipment in
trust
213
151
61
Tools and fixtures in trust
183
152
30
51,069
48,485
2,583
(23.7)
133
(91)
228
228
(0)
1
2
(1)
Rent received in
advance
481
465
15
Deposits held
473
741
(268)
9,834
6,804
18,600
18,600
－
107
－
107
8,382
8,109
272
38
86,816
38
－
91.8
81,771
Key money and
security deposits on
deposit
Key money and
security deposits in
trust
93.5
5,044
3,421
3,421
Guarantees and
deposits
Long term pre-paid
expenses
Total investment and
other assets
10
10
－
93
109
(16)
－
27,089
28.6
26,709
380
Total liabilities
43,728
46.2
36,543
7,184
49,167
52.0
49,167
－
1,750
(53)
I. Unitholders’ capital
II. Surplus
Retained earnings
Total surplus
3,525
3.7
119
0.2
3,405
－
90,341
95.5
81,891
93.7
8,449
10.3
33
39
17.6
Total fixed liabilities
Unitholders’ capital
Investment securities
16,638
Unitholders’ equity
6.2
III. Deferred assets
44
41
Expenses payable
Income taxes payable
2. Investment and other assets
Total assets
Accounts payable
Long-term debt
641
Establishment expenses
50
7,100
II. Fixed liabilities
1,549
Total deferred assets
Value
262
144
－
Total fixed assets
Value
8,000
Total current liabilities
144
32,765
Temporary account of
construction in trust
Total tangible fixed
assets
Share (%)
313
Short-term debt
(78)
641
Land in trust
Value
15,100
Accrued business fees
(1,595)
34,315
Building in trust
Category
Variation
(as of August 31,
2005)
I. Current liabilities
1,424
1. Tangible fixed assets
Land
period
Liabilities
II. Fixed assets
Building
2nd period
(as of February 28, 2006)
Assets
I. Current assets
Cash and cash
equivalents
(million yen)
3rd
(5)
33
0.0
39
0.0
(5)
(14.3)
94,593
100.0
87,461
100.0
7,131
8.2
Total unitholders’
equity
1,697
1,697
1.8
1,750
(53)
50,865
53.8
50,918
(53)
Management of tangible fixed assets
Canal City Hakata 32,337
Park Place Oita
16,407
SunLive City Kokura 6,698
Total liabilities and
unitholders’ equity
94,593
Canal City Business Center Building 14,692
Gofukumachi Business Center
11,204
Sanix Hakata Building
4,650
100.0
87,461
7,131
Concept
Hometown
Portfolio
Strategy
Appendix
Cash Flow Statement for the 3rd Fiscal Period
(million yen)
(million yen)
I. Cash flows from operating activities
Income before income taxes
Depreciation
Amortization of founding fees
Interest received
Interest paid
Increased/decreased amount of operations receivables
Increased/decreased amount of uncollected consumption tax
Increased/decreased accrued business payments
Increased/decreased unpaid fees
Increased/decreased unpaid expenses
Increased/decreased advanced rents
Increased/decreased deposits held
Increased/decreased advance payments
Increased/decreased long-term advance payments
Other
Subtotal
Interest received
Interest paid
Corporation tax payment, etc.
Net cash provided by operating activities
II. Cash flow from investment activities
Expenses from acquiring tangible fixed assets
Expenses from acquiring tangible fixed assets in trust
Income from security deposits and guarantees
Expenses from security deposits and guarantees
Income from security deposits and guarantees in trust
Expenses from security deposits and guarantees in trust
Expenses from acquiring investment securities
Income from withdrawing deposits and deposits in trust with use limitations
Expenses from withdrawing deposits and deposits in trust with use
limitations
45
Net cash used in investment activities
III. Cash flow from financing activities
Proceeds from short-term debt
Repayment of short-term debt
Proceeds from borrowing long-term loans
Proceeds from investment unit issuance
Distribution payment
Net cash provided by financing activities
IV. Increased/decreased cash and cash equivalents
V. Cash and cash equivalents at start of period
VI. Cash and cash equivalents at end of period
3rd period (181 days)
2nd period (actual management period: 296 days)
September 1, 2005 – February 28, 2006
September 1, 2004 – August 31, 2005
1,698
562
5
(0)
133
49
1,595
35
(99)
(33)
15
(268)
40
16
33
3,784
0
(99)
(2)
3,682
(786)
(4,822)
109
(2)
393
(120)
(3,401)
－
－
(8,630)
8,100
(1,000)
－
－
(1,740)
5,359
411
3,599
4,010
1,764
764
5
(0)
273
(181)
(1,595)
262
56
184
465
741
(111)
(109)
(87)
2,431
・This cash flow is a result of
strong property cash flows and
a refunded consumption tax last
fiscal period
・This cash flow is a result of
the acquisitions of Sanix
Hakata Building, Kominedai
Community Mall and the silent
partnership equity interest
This cash flow is a result of increases
in short-term borrowings
0
(230)
(0)
2,201
－
(82,466)
－
－
8,212
(102)
－
9,572
(9,572)
(74,357)
33,000
(25,000)
18,600
49,042
－
75,642
3,487
111
3,599
Concept
Hometown
Portfolio
Strategy
Appendix
Distribution in the 3rd Fiscal Period
The length of the second fiscal period is listed as September 1, 2004 to August 31, 2005, but assets
began being acquired on November 9, 2004, thus the actual management period is 296 days
Category
Forecast for the 4th fiscal
period
(184 days)
March 1, 2006
- August 31, 2006
Operating revenues
Operating profit
－
(181 days)
September 1, 2005
- February 28, 2006
2nd fiscal period results
(actual management period: 296 days)
September 1, 2004
- August 31, 2005
4,050
5,857
1,751
2,685
Ordinary profit
1,677
1,698
1,859
Net profit
1,675
1,697
1,761
18,200
18,438
19,014
24,550
27,445
Distribution per
unit (yen)
Distribution per
FFO (yen)
－
＋
External and internal growth
pushed operating revenues
up 404 million yen
ー
However, accepted profit from consumption
tax was lost and a budget was appropriated
to account for increases in interest rates
→
46
4,454
3rd fiscal period results
Project roughly same outcome as
last fiscal period
・Settlement
↑
18,438 yen
(+1,738 yen)
・Performance revision
18,100 yen
↑
・Forecast at start of period
16,700 yen
Reliably Maintain Distribution Among the Highest of J-REITs
Concept
Hometown
Portfolio
Strategy
Appendix
Appendix: Leasing Business Income and Expenditures by property
(3rd fiscal Period)
(as of February 28, 2006)
Canal City Hakata
Gofukumachi
Business Center
Sanix
Hakata
Building
（注８）
Kominedai
Community
Mall
（注９）
(Fiscal Period）
3rd
2nd
3rd
2nd
3rd
2nd
3rd
2nd
3rd
2nd
3rd
3rd
（Operational
period） (Days)
181
Reference
(Note6)
181
Reference
(Note6）
181
Reference
(Note７）
181
Reference
(Note6）
181
Reference
(Note6）
152
71
Total leasing
business income
1,446
1,436
901
857
262
255
701
684
555
549
170
13
1,381
1,379
877
842
262
255
695
677
490
490
158
13
64
56
23
14
0
0
5
7
64
59
12
0
510
514
396
384
15
12
258
244
182
170
31
1
76
76
77
73
0
0
50
50
41
41
0
0
Maintenance
costs
（Note 3)
372
368
236
228
7
7
193
184
128
122
28
0
Repair Costs
9
5
13
9
0
0
1
0
6
1
0
0
Insurance
premiums and
trust
compention
10
14
7
8
4
4
6
6
5
5
2
0
Other expenses
（Note 4）
41
50
61
65
2
0
6
3
0
0
1
0
935
921
504
473
247
242
442
440
373
378
139
12
Rent （Note 1）
Other Incom
（Note 2)
Total leasing
business expenses
Tax and other
Public charges
ＮＯＩ（Note 5）
Comparison to
Previous fiscal
period
47
Canal City
Business Center
Building
SunLiveCity
Kokura
Park Place Oita
（mm yen）
New marketing
strategy by
external
consultants
Revenue growth
by value added
renovation
(Note 1) Includes common fees
(Note 2) Warehouse use fee, sales promotion income, utilities income, etc.
(Note 3) Building management outsourcing fee, utilities expenses, etc.
(Note 4) Sales promotion expenses, etc.
(Note 5) NOI=lease business income-lease business expenses (not including extraordinary losses) + depreciation
－
－
－
－
－
Concept
Hometown
Portfolio
Strategy
Appendix
Appendix: Performance on Pricing
(as of April 17, 2006)
History of Investment Unit Price
（through April 17, 2006）
（円）
History of Relative Stock Prices
(June 21, 2005 =100)
900,000
15,000
110%
12,000
100%
800,000
9,000
Trade Volume
Investment Unit Price
6,000
90%
700,000
REIT Index
3,000
FRC
600,000
0
6/21 7/14
8/9
9/1
9/28 10/24 11/17 12/13 1/11
2/3
2/28 3/24
Current Pricing (as of 4/17/206)
Stock Price
High
Low
48
887,000yen
910,000yen (6/21/2005）
763,000yen (9/15/2005）
4/17
80%
6/21
7/21
8/21
9/21
10/21
11/21
12/21
1/21
2/21
3/21 4/17
Concept
Hometown
Portfolio
Strategy
Analysis of Investor Attributes
(Breakdown of Investment Units)
Financial institutions
Securities companies
1.58%
46.85%
End of second
fiscal period
26.46%
40.64%
28.11%
Other corporations
Foreign corporations
Individuals
10.88% 14.23%
9.05%
20.95%
1.25%
0%
20%
40%
60%
80%
100%
Distribution of Investors by Region
(Breakdown of Investment Units)
1.73%
1.83%
Hokkaido
4.93% 4.06% 1.59%
Tohoku
Kanto
End of third
fiscal period
8.92%
37.10%
29.33%
10.51%
Chugoku
Shikoku
Kyushu
Overseas
32.97%
1.93%
0%
49
1.47%
20%
9.81%
30.89%
6.24% 5.80%
40%
60%
8.99%
1.90%
80%
Rank
100%
Investors
Investment
Units Held
Share
20,000
21.73%
1
Fukuoka Realty Holdings,
Co, Ltd.
2
Japan Trustee Services Bank,
Ltd.
5,331
5.79%
3
NikkoCiti Trust and
Banking Corporation
5,157
5.6%
4
Trust and Custody Services
Bank, Ltd.
3,641
3.96%
5
The Master Trust Bank of
Japan, Ltd.
2,797
3.04%
6
Luxembourg Offshore JASDIC
Lending Account
2,041
2.22%
7
Bank of New York GCM Client
Accounts EISG
1,851
2.01%
8
Morgan Stanley and Co. Inc.
1,453
1.58%
9
The Fuji Fire and Marine
Insurance Company, Limited
1,150
1.25%
The Daisan Bank, Ltd.
1,120
1.22%
Chubu
Kinki
End of second
fiscal period
(as of February 28, 2006)
Largest Investors
Distribution by Investor Category
End of third
fiscal period
Appendix
10
Concept
Hometown
Portfolio
Strategy
Appendix
Appendix:Management Staff Leading the Act Local, Think Global Strategy
Post
Job
President/
Chairman of the Board
50
Name
Resume
Masatoshi
Matsuo
Entered Mitsui Fudosan and earned his MBA in Real Estate Finance at Pennsylvania University’s Wharton School; Transferred to
Lehman Brothers where he served as Senior Vice President (real-estate investment, financing, acquisition of real-estate debt, etc.);
Joined Fukuoka Realty; Graduated from the Faculty of Law at the University of Tokyo
Senior Managing
Director/
Investment Manager
CIO
Akira
Matsumoto
First class architect; Worked in construction at KOKUNE Corporation and Design at NiCK; Involved in the development and
management of Canal City Hakata, Riverwalk Kitakyushu and Marinoa City at Fukuoka Jisho and FJ Urban Design & Development;
Former manager of Riverwalk; Graduated from the Environmental Design Section of the Art and Engineering Department at
Kyushu Institute of Design
Senior Managing
Director/
Finance Manager
CFO
Hisashi
Okita
Entered Fukuoka Realty after serving at Central Leasing System and Kyushu Leasing Service (supervised financial planning and
disclosure as executive officer and corporate affairs general manager); Graduated from the School of Economics at Kyushu
University
Managing Director
Hidekazu
Tanaka
Dispatched to Fukuoka Realty from Nippon Credit Bank (presently Aozora Bank); Experienced in advising on syndicated loan
structures and M&A opportunities; Graduated from the Faculty of Business Commerce at Keio University
Director
Tomokazu
Odahara
Entered Kyushu Electric Power and served as general manager of human resources department, Kagoshima Branch Manager and
director (in charge of human resources, general affairs and secretarial department); Presently Managing Director of Kyushu Electric
Power; Graduated from the School of Law at Kyushu University
Director
Keiji
Shibata
First class architect; Entered Fukuoka Jisho from Mitsubishi Construction; Presently Fukuoka Jisho Development Division General
Manager (in charge of real estate development and management); Graduated from the Architecture Department of the School of
Engineering at Kyushu University
Auditor
Akio
Imai
Entered Fuji Steel (presently Nippon Steel Corporation); After serving as Tokyo Branch Manager and Director of Fukuoka Jisho,
took his present job as President of Royal Holdings; Graduated from the Faculty of Economics at the University of Tokyo
Advisor
Masayasu
Saki
Entered The Nippon Fudosan Bank (presently Aozora Bank); Served as Executive Officer at Sanyo Shinpan Finance and other
financing firms; Served as CEO at Fitch Ratings Japan from 2003; Joined Fukuoka Realty; Graduated from Keio University and
earned his MBA at Pennsylvania University’s Wharton School and MPh from the London School of Economics at the University of
London
Compliance
Manager
Hiroshi
Shimuta
Registered as lawyer in 2000; Opened Shimuta Law Office in November 2003; Graduated from the Faculty of Law at the University
of Tokyo
Planning
Manager
Ichiro
Enomoto
Entered Industrial Bank of Japan; Joined Fukuoka Realty after an internship with the Boston Consulting Group; Graduated from the
Faculty of Law at the University of Tokyo and earned his MBA at Northwestern University’s Kellogg Graduate School of
Management
Appendix 2
(Others)
Concept
Hometown
Portfolio
Strategy
Appendix
Appendix: Gateway to Asia
Distance from Fukuoka to Major Cities
Flight Time from Fukuoka Airport
to Major Cities
〜1 hr
1〜2 hrs
2〜3 hrs
3〜4 hrs
4 hrs or more
52
Busan
Osaka
Tokyo
Seoul
Shanghai
Dalian
Qingdao
Sapporo
Shenyang
Taipei
Beijing
Guangzhou
Hong Kong
Manila
Xian
Ho Chi Minh
Chengdu
Bangkok
Guilin
Fukuoka is Centrally Located between Shanghai and Tokyo
Concept
Hometown
Portfolio
Strategy
Appendix
Appendix: Kyushu’s Industries～Automotives/Semiconductors
“Car Island”
(10 thousand vehicles)
Number of Passenger Cars Produced in Kyushu
(%)
100
10
80
8
60
6
40
4
20
2
0
0
1999
2000
2001
2002
Passenger Cars Produced
2003
Share in Japan
Source: Outline of Kyushu Economy (Kyushu Economic Research Center)
“Silicon Island”
(100 million yen)
Integrated Circuits Production Value in Kyushu
(%)
16,000
14,000
12,000
10,000
8,000
6,000
4,000
2,000
0
35
30
25
20
15
10
5
0
1999
2000
2001
IC production
2002
2003
Share in Japan
Source: Kyushu Economic and Industrial Data (Kyushu Bureau of Economy, Trade and Industry)
53
Rich in Human Resources and Blessed by Nature,
Kyushu Has a Huge Connection of Semiconductor and Automotive Plants
finished
Concept
Hometown
Portfolio
Strategy
Appendix
Appendix: Office Vacancy Rate
Vacancy Rate (Overall Average)
（%）
50
14
12
10
Vacancy Rate
(New Buildings Less than One Year in Age
（%）
Fukuoka
Tokyo
Nagoya
Osaka
Sapporo
Sendai
Fukuoka
Tokyo
Nagoya
Osaka
Sapporo
Sendai
40
Sendai
Fukuoka
Sapporo
8
30
Osaka
Nagoya
6
20
Tokyo
4
10
Sendai
2
0
0
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
Note) There were no new buildings completed in
Sendai in 2000 and Sapporo in 2001.
Source: “Office Building Market Report by Region” issued by Miki Shoji Co., Ltd.
54
Vacancy Rate of New Buildings has Improved
Fukuoka
Tokyo
Nagoya
Osaka
Sapporo
Concept
Hometown
Portfolio
Strategy
Appendix
Appendix: Average Office Rent
（yen/month・tsubo）
Average Rent
（yen/month/tsubo）
Average Rent
New Buildings Less than One year in Age
30,000
25,000
Tokyo
25,000
20,000
Tokyo
20,000
15,000
Osaka
Nagoya
Fukuoka
Sendai
Sapporo
10,000
5,000
0
Fukuoka
Tokyo
Nagoya
Osaka
Sapporo
Sendai
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
Source: “Office Building Market Report by Region” issued by Miki Shoji Co., Ltd.
55
15,000
Osaka
10,000
Fukuoka
Nagoya
Sapporo
Sendai
5,000
Fukuoka
Tokyo
Nagoya
Osaka
Sapporo
Sendai
0
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
Note) There were no new buildings completed in Sendai in 2000 and Sapporo in 2001.
Rent Levels in Fukuoka are Stable at Around Half the Levels of Tokyo
Concept
Hometown
Portfolio
Strategy
Appendix
Appendix: Description of Earthquake Insurance
Content
56
Classifications of Earthquake Insurance
Property
No.
Property
A-1
Canal City
Hakata
B-1
Canal City
Business
Center Building
A-2
Park Place Oita
B-2
Gofukumachi
Business
Center
A-3
SunLiveCity
Kokura
B-3
Sanix Hakata
Building
A-4
Kominedai
CommunityMall
B-4
Taihaku Street
Business
Center
Building
Total Building
Repurchase
Price
4７.５３ billion
yen
Portfolio
PML
Insurance
Value
Indemnification
Amount
4.685％
1.5 billion
yen
10 million
yen
（Coverage）
1. Damage from fires, cracking and explosions caused by earthquakes or eruptions
2. Damage from collapsing, sinking, etc. resulting from earthquakes or eruptions
3. Damage from tsunamis, floods and other water disasters caused by earthquakes or
Source: Overview of Earthquake Insurance on
Ministry of Finance Website
Earthquake insurance policies can be concluded at relatively small
costs since Fukuoka and the Kyushu regions have earthquake
insurance classifications of class 1 or 2
Fukuoka REIT has Taken Out Earthquake Insurance Policies for All of its Properties
Concept
Hometown
Portfolio
Strategy
Appendix
Appendix: J-REIT Structure
Properties
Loan
Investment
corporation
Investment
Rental
income
Issuer of J-REIT investment
securities and owner of
assets
Fukuoka REIT Corporation
Advantage of reduced
corporation taxes
Property
management
Property manager
Fukuoka Jisho
Asset
management
Management
instruction
Investment securities
Dividends
Fukuoka Realty
Investment
Investor
Taxation
on dividends
Consignment of
management
Sponsors
Fukuoka Jisho,
Kyushu Electric Power, etc.
57
Investment
Consignment of real estate
management
Asset manager
Financial
institutions
Consignment of asset
custodian and general
administrative affairs
Asset custodian
Provider of general
administrative affairs
Mitsubishi UFJ Trust and Banking
Sumitomo Trust & Banking
Disclaimer
The contents of this document, including summary notes, quotes, data and other information, are provided solely for
informational purposes and not intended for the purpose of soliciting investment in, or as a recommendation to purchase or
sell, any specific products.
Please be aware that matters described herein may change or cease to exist without prior notice of any kind. All properties
and performance indications reflect acquisitions through September 2005. Any acquisitions thereafter are not reflected as
of issuance of this document. This document contains forward-looking statements and anticipations of future results,
based on current assumptions and beliefs in light of currently available information and resources. Risks and uncertainties,
both known and unknown, including those relating to the future performance of the retail market in Japan, interest rate
fluctuations, competitive scenarios, and changing regulations or taxations, may cause Fukuoka REIT’s actual results,
performance, achievements and financial performance change materially from those explicitly or implicitly expressed in this
document.
With respect to any and all terms herein, including without limitation, this document, the information provided is intended to
be thorough. However, no absolute assurance or warranties are given with respect to the accuracy or completeness thereof.
Neither Fukuoka REIT nor Fukuoka Realty shall be liable for any errors, inaccuracies, loss or damage, or for any actions
taken in reliance thereon, or undertake any obligation to publicly update the information contained in this document after
its issuing date (May 10, 2006).
58
Act Local, Think Global
Thank you for this opportunity to
present our REIT
59