Fukuoka REIT : Integrated Report 2021

Fukuoka REIT Corporation

1-2-25 Sumiyoshi, Hakata, Fukuoka City, Fukuoka, Japan

https://www.fukuoka-reit.jp/eng/

Integrated Report

2021

@fukuokareit8968 facebook.com/fukuokarealty fukuoka_realty

To help stakeholders better understand FRC and its operations, FRC is focusing efforts on its IR activities. FRC uses its website to post press releases and various disclosure materials and provide information on its portfolio of investment properties and other items. In addition, FRC uses social media such as Twitter, Facebook, and Instagram to disseminate a wide range of information on the Fukuoka and Kyushu areas, including information on these regionsʼ economies, real estate markets, retail facilities, tourist attractions, and much more. We invite you to make use of these information resources.

Fukuoka REIT Corporation

December 2021

（Residence）D-Wing Tower

（Retail）Canal City Hakata

（Office buildings）Gofukumachi Business Center

Contents

01 Introduction

01 Corporate Profile / Characteristics

02 Relationship with Fukuoka Realty Co., Ltd.

04 Macroeconomic Environment around Fukuoka City

1. J-REITMechanism and Fukuoka REIT Corporation's Business Model

1. History and Business Performance

1. Overview of Properties Owned

1. Financial/Non-FinancialHighlights (5-Year Graph)

16 Value-Creation Activities

16 CEO's Message

1. Message from the Executive Director

1. Strategies of Each Department

1. Risks and Opportunities

1. Financial Strategies and TSR（Total Shareholder Return）

30 Foundation Underpinning Management

1. Sustainability Policy and Materiality

1. Environmental Issues

1. Social Issues

1. Organizational Issues

42 Data Section

1. Financial/Non-FinancialHighlights (11-Year/22-Period Summary)

1. Glossary

Editorial Policy

With the aim of conveying details of the Investment Corporationʼs value creation process in an easy-to-understand manner, we have issued this Integrated Report since fiscal 2019. In editing this report, the editors adopt clear and accessible language, with reference to the International Integrated Reporting Framework of the International

Integrated Reporting Council (IIRC) and the Guidance for Collaborative Value Creation

（Logistics）LOGICITY Hisayamaof Japanʼs Ministry of Economy, Trade and Industry (METI). We consider that this and subsequent reports will lead to active dialogue with investors and other stakeholders.

Introduction

Corporate Profile / Characteristics

Taking advantage of our strength in knowing the local characteristics of real estate, which is a region-specific business, to invest in the wider Kyushu region with a focus on Fukuoka, on June 21, 2005, Fukuoka REIT Corporation (FRC) was listed as the first region-specific REIT in Japan. FRC believes that attracting excellent domestic and foreign investment funds to regional financial markets will stimulate community development in the Fukuoka and Kyushu areas. Moreover, we believe that possibilities for regional growth through urban development will provide FRC with a continuous stream of investment opportunities as well as income from assets under ownership for FRC while at the same time delivering profitable returns to unitholders.

Corporate Profile

Name	Fukuoka REIT Corporation
Securities code	8968
Listed date	June 21, 2005 : FRC listed on Tokyo Stock
Exchange and Fukuoka Stock Exchange
Accounting periods	February, August
Asset management	Fukuoka Realty Co., Ltd.
company
Sponsors	Fukuoka Jisho Co., Ltd.
	Kyushu Electric Power Co., Inc.
	THE BANK OF FUKUOKA, LTD.

FRCʼs Characteristics

• Japan's First Region-Specific

REIT

Taking advantage of our strength in knowing the local characteristics of real estate, which is a region-specific business, we invest in real estate for rent in the Fukuoka and Kyushu areas, where growth potential exists. By appropriately managing the invested real estate, we continue to secure stable earnings over the medium to long term while providing stable dividends.

• Excellent Portfolio

To build its portfolio, FRC selectively invests in a variety of investment property types, including retail facil- ities, office buildings, and logistics properties , etc., with a focus on the Fukuoka metropolitan area, which has significant growth potential.

• Support Structure Comprises

Sponsor Companies

Powerful companies that lead the business world in Fukuoka and Kyushu, and accept our way of thinking, participate as shareholders of Fukuoka Realty Co., Ltd. FRC proactively utilizes the support from its sponsor companies while aiming to steadily expand its asset scale.

THE NISHI-NIPPON CITY BANK, LTD.

Nishi-Nippon Railroad Co., Ltd.

SAIBU GAS HOLDINGS CO., LTD.

Kyudenko Corporation

Kyushu Railway Company

Development Bank of Japan Inc.

4 Stable Financial Base	5 Payment of Stable Dividends Continuing Since Listing
FRC conservatively controls its LTV and diversifies repayment		Utilizing its sponsor pipeline and other advantages, FRC continues to distribute stable
periods over time. In addition, the Investment Corporation		dividends per unit through the acquisition of carefully selected excellent properties and
continues to maintain good relationships with financial		effective asset management in the Fukuoka and Kyushu areas.
institutions including its three sponsor banks.

Fukuoka REIT Corporation 2021

01

Relationship with Fukuoka Realty Co., Ltd.

FRC's Basic Policy

■ Introduction □ Value-CreationActivities □ Foundation Underpinning Management □ Data Section

Corporate Profile of Fukuoka Realty Co., Ltd.

【Our Mission】	by utilizing its speed and depth of information based on knowledge
Taking advantage of our strength in knowing the local character-	of local land and a broad network centering on local governments
istics of real estate, which is a region-specific business, we invest	and the business world.
in real estate for rent in the Fukuoka and Kyushu areas. By appro-	【Think Global】
priately managing the invested real estate, we will achieve stable	We will proactively engage in IR activities to fulfill our accountabil-
earnings over the medium to long term while making efforts to	ity to global capital markets. In conjunction, we will take heed of
keep providing stable dividends for the future.	Fukuoka Realtyʼs corporate governance and compliance. Regard-
【Act Local】	ing real estate and financial markets, FRC will keep closely tracking
We - FRC and Fukuoka Realty Co., Ltd. - are currently the only	movements occurring across the whole of Japan and the entire
listed real estate investment corporation and asset management	world, taking into consideration the logic of capital markets with
company registered outside the Tokyo metropolitan and Kansai	global ideas, and appropriately reflecting such in our asset man-
areas under the provisions of the Act on Investment Trusts and	agement.

Listed on the real estate investment trust sections of the Tokyo and Fukuoka stock exchanges, Fukuoka Realty Co., Ltd., is FRCʼs asset management company. Having only one Executive Director and two Supervisory Directors, FRC outsources operations that include the selection of the real estate to be invested in, asset management, and other general affairs to outside experts. Among the experts to which operations are entrusted, an important role is played by the asset management company. Generally, FRC entrusts Fukuoka Realty Co., Ltd., see with surveys of new real es-

tate acquisitions, property selection, the post-acquisition management of real estate management companies outlined by Fukuoka Realty Co., Ltd., and real estate sales.

Located in Fukuoka City and comprising 40 employees with a variety of experience in real estate, finance, and other fields, Fukuoka Realty Co., Ltd., possesses a high level of expertise and makes full use of information unique to the local area in managing FRCʼs assets.

Investment Corporations as well as the Financial Instruments and	We will also keep diligently pursuing dialogue with investors,fo-
Exchange Act. As a region-specific REIT, FRC seeks differentiation	cusing on fulfilling our accountability, and utilizing Fukuoka Realtyʼs
in the selection of investment target properties and the manage-	fund management skills for investors under a strict compliance
ment of owned assets through the enhancement of its information	policy.
gathering ability and ability to discern the profitability of properties

Contribution to Regional Revitalization and Development of Attractive Communities

Real Estate Investment Trust

Real Estate

Fukuoka REIT Corporation

Investors

• Securities code:8968 ］

Holdings	Investments
Rents, etc.	Dividends

Introduction

FRC and Fukuoka Realty Co., Ltd., believe that attracting domestic and foreign excellent investment funds to regional real estate financial markets will stimulate community development in the Fukuoka and Kyushu areas. Although we are not directly involved in community development or real estate development, we expect our acquisition of properties to lead to new funds passing to sellers and part of those funds being directed to new development, etc. With funds injected into FRC from Japan and abroad, new investment funds will flow to the Fukuoka and Kyushu areas as a whole.

Based on this perspective, we believe that we can contribute to regional revitalization and community development in the Fukuoka and Kyushu areas.

Funds will be returned to unitholders by distributing the earnings from owned assets.

Through the promotion of community development and the revitalization of regional economies in the Fukuoka and Kyushu areas, we will aim for FRC earnings stability.

Company

entrusted with

asset

management

Asset management company

Fukuoka Realty Co., Ltd.

For more details : See pp.8-9

Leading companies in Fukuoka and the Kyushu region that are in agreement with FRCʼs concept participate as shareholders

Introduction

Act Local

Real estate is a local business

・Distinctive capability for gathering qualitative information on the real estate market (speed, in-depth information)

・Specialization in local properties

・Solid network among local governments and the business world

		Investment Policy
		Investment target areas	Investment type
	Think Global	Fukuoka	Retail
OurMission	metropolitan area
40%-70%
Region-Specific REIT	Capital market theory	60%-90%
・Accountability and transparent
Featuring our expertise on	dialogue with investors	Other Kyushu areas
local real estate markets,	・Decent policy to comply	Office buildings
Fukuoka and Kyushu, maximize	・Fund management skills	(including Okinawa and
profits of investors		Yamaguchi prefectures)	20%- 50%
		10%- 30%
		Others	Others
		(Hotel, Residence,

0%-10%	Logistics, etc.)
0%- 30%

（sponsors）of Fukuoka Realty Co., Ltd. FRC is aiming to achieve sustainable growth as a REIT through the expanded scale of its assets through the contribution of excellent properties from among our sponsors and by actively leveraging their support, including the provision of relevant information.

With regard to the properties owned and developed by the sponsor companies, Fukuoka Jisho Co., Ltd., FRC, and Fukuoka Realty Co., Ltd., have concluded a pipeline support memorandum of understanding（MOU）to seek stable and continuous acquisition opportunities.

Fukuoka Jisho Co., Ltd. overview : See p.25

5%5%5%

THE BANK OF

THE NISHI-NIPPON

Development

FUKUOKA, LTD.

CITY BANK, LTD.

Bank of Japan Inc.

55%

Directors

Outside

10%

Fukuoka Realty Co., Ltd.

directors

Fukuoka Jisho

Kyushu Electric

(Asset Manager)

Co., Ltd. ＊

Power Co., Inc.

5%

5%

5%

5%

SAIBU GAS

Kyudenko

Nishi-Nippon

Kyushu Railway

HOLDINGS CO., LTD.

Corporation

Railroad Co., Ltd.

Company

* Concluded MOU with FRC and Fukuoka Realty Co., Ltd., concerning pipeline support.

02

Fukuoka REIT Corporation 2021

Fukuoka REIT Corporation 2021

03

Macroeconomic Environment around Fukuoka City

Fukuoka City's Standing: From Regional City to an Asian Economic Metropolis

■ Introduction □ Value-CreationActivities □ Foundation Underpinning Management □ Data Section

Population Continues to Grow in Fukuoka City

Fukuoka Has a Large Youth Population

Beijing Seoul

Busan Tokyo

Osaka

Shanghai Fukuoka

	Taipei	500km
	1,000km
Hong Kong
	1,500km

Blessed with a history and culture nurtured by the sea, an abundant natural environment, extensive urban functions, diverse human resources, and various other assets, Fukuoka City is recognized around the world as a livable city.

Under the "Fukuoka City Comprehensive Plan," the basic strategy for city management focuses on creating a virtuous cycle of "urban growth" and "greater quality of life." In aiming to become a "leading Asian city in which people, the environment, and urban vitality are harmonized," Fukuoka City is advancing urban planning that recognizes its presence within Asia as a compact, sustainable city that balances economic growth with a safe, secure, high quality of life.

The total population of Fukuoka City has increased consistently since 1985, and as of May 1, 2020, the estimated population exceeded 1.60 million. This total population makes the city the fifth most populous among government-designated cities, following Yokohama, Osaka, Nagoya, and Sapporo. According to estimates from the National Institute of Population and Social Security Research, the population of Fukuoka City is expected to continue growing until 2035.

Compared to other cities, the population composition of Fukuoka City is characterized by a higher proportion of young people. Of the cities listed in the chart below, the ratio of young people in Fukuoka City（the proportion of a cityʼs total population accounted for by people ages 15 to 29）ranks first at 17.4%. Fukuoka Cityʼs working-age population ratio（the proportion of the cityʼs total population made up of people ages 15 to 64）ranks third at 64.8%.

Fukuoka City Initiatives

Fukuoka City's Activities to Attract "Growth Fields and Head Ofce Functions"

• Total Population and Population Growth Ratio of Fukuoka City

Total population of Fukuoka City		Population growth ratio

• Young People and Working-Age Population ratios of Nationwide and Major Cities（2015）

（%）

Introduction

Having promoted the attraction of "growth fields and head office functions," Fukuoka Cityʼs track record in company relocations has exceeded 50 companies annually for eight consecutive years. With the progress of risk diversification and telework in the centralized area of Tokyo, more companies are considering opening bases in regional cities. Even when impacted by COVID-19, the willingness of companies to enter the market has not diminished. Fukuoka City will thus continue to make efforts to further establish companies and create employment by utilizing active PR and incentives.

Example of Major Function Relocation

Japanet Holdings Co., Ltd., launched its JAPANET@FUKUOKA project, which features Fukuoka City as one of its new major bases. In addition to relocating 12 departments, including personnel and accounting, mid-career recruitment will be strengthened, and the plan is to have commenced operations by the end of 2021.

• Fukuoka City: Trends in head office function/growth fields company relocations

		No. of companies relocated		No. of persons employed
(Companies)		(Persons)

80				5,000
70				4,000
60
50				3,000
40
30				2,000
20				1,000
10
0				0
2016	2017	2018	2019	2020

No. of companies relocated	58	57	57	53	50
No. of persons employed	2,989	1,041	1,334	1,058	665

(Thousands)																（%）
1,650																	1.4
1,600						1.12							1,582 1,595	1,614 1,620
													1.2
0.99						0.99	1.02		0.99	1,556	1,570	1.18
1,550		0.89		0.89	0.82				0.89	1,541	0.95			0.84			1.0
			0.78			1,482 1,497 1,512 1,526	0.90	0.77
1,500					1,466								0.8
1,450			1,441	1,454												0.6
	1,430
	1,417
1,400																	0.4
1,350																	0.2
0	2006	2007	2008	2009	2010	2011	2012	2013	2014	2015	2016	2017	2018	2019	2020	2021	0

Note: Total population for 2021 indicates the population as of November 1, and therefore does not reflect the population growth rate.

Source: Prepared by Fukuoka Realty Co., Ltd., based on data from Fukuoka City Estimated Population and Fukuoka City Registered Population, published by Fukuoka City

18.0	・Youth population	17.4%	(1st)
	・Working-age population	64.8%	(3rd)

to 29)

Kyoto

Fukuoka

17.0

Sendai

Kawasaki

15

agedpopulation population

Okayama

Tokyo

Kumamoto

Osaka

Sagamihara

Metropolitan

16.0

Nagoya

Saitama

area

cityof(Percentage Youth

Hiroshima

Sapporo

Yokohama

15.0

Kobe

Niigata

Sakai

Nationwide

Chiba

14.0

Hamamatsu

Kitakyushu

Shizuoka

・Youth population

14.5%

・Working-age population 60.0%

0

57.0

58.0

59.0

60.0

61.0

62.0

63.0

64.0

65.0

66.0 （%）

Working-age population

(Percentage of city population aged 15 to 64)

Source: Prepared by Fukuoka Realty Co., Ltd. based on data from the Ministry of Internal Affairs and Communications, Statistics Bureau Population Census of Japan.

Introduction

TEAM FUKUOKA attracting international financial functions

The Japanese government, as a pillar of its growth strategy, aims to gather financial talent, funds, and information from overseas and to establish Fukuoka as an international financial city. In response, TEAM FUKUOKA, a promotional organization of industry-academia-government collaboration throughout Fukuoka, was established on September, 2020.

In aiming to attract international financial functions to the city,

Fukuoka: A Balanced City That Continues to Grow

According to "Japan Power Cities: Profiling Urban Attractiveness 2021," a survey conducted by the Mori Memorial Foundation, which analyzes the urban vitality of 138 cities in Japan from relative and multifaceted perspectives, Fukuoka City consistently received high marks as the largest city in the Kyushu region that combines economic vitality and ease of living. In terms of its "daily life and livability " functions, Fukuoka ranked first in the whole country. Aiming

Fukuoka as a Compact City

As a compact city, the air, sea, and land transportation access	five minutes to Hakata and about 10 minutes to Tenjin.
points of Hakata Station, the Port of Hakata/Chuo Wharf, and Fu-	About 60% of commuting times are less than 30 minutes, which
kuoka Airport are located within a three-kilometer radius of Tenjin,	is about half that of Tokyo. In 2022, the Nanakuma Subway Line
Fukuoka City's central business district. Traveling by the Fukuoka	extension project will connect Tenjin and Hakata Station, and thus
City Subway from Fukuoka Airport to the city center, it takes about	increased convenience is expected.

TEAM FUKUOKA's efforts included the opening of the Global Finance Center, a one-stop support portal specializing in international finance, and the appointment of a Fukuoka City international financial ambassador. The first success, the entry into the market of Hong Kong asset management company MCP Holdings Limited, was announced in February 2021. In July, the companyʼs Japanese head office, MCP Japan Holdings, was established. TEAM FUKUOKA is deciding on many other corporate moves into the Fukuoka City market.

Examples of TEAM FUKUOKA Successes

（1）First success, MCP Holdings Limited attracted from Hong Kong

（2）CapBridge Financial Pte. Ltd. attracted from Singapore

（3）DHARMA.CAPITAL K.K., the first FinTech company, attracted from Tokyo

Source:"Restoring Vitality!"―Overview of the Initial Budget Proposal for Fiscal 2021 issued by the Finance Bureau of the City of Fukuoka on February 16, 2021, and press release issued by the Economy, Tourism & Culture Bureau of the City of Fukuoka on February 12, 2021

to create a leading city in Asia in which people, the environment, and urban vitality are in harmony, Fukuoka continues to grow as a balanced city.

• Category Rankings/Standard Deviation

Economics/Business 5th 71.1	(2nd)		Standard Deviation by Category
	50-point standard deviation line
75		（ ）Figures in parenthesis indicate
			last yearʼs rankings
Transportation/Access		Research/Development
3rd 77.7 (3rd)		6th 80.6 (5th)
Environment		Culture/Exchange
63rd 51.3 (91st)		5th 74.1 (5th)

Lifestyle/Residence 1st 73.3 (6th)

Source: Prepared by Fukuoka Realty Co., Ltd., based on data from"Japan Power Cities: Profiling Urban Attractiveness 2021,"a survey conducted by the Mori Memorial Foundation.

Legend

JR（Conventional lines） Shinkansen Nishi-Nippon Railroad Fukuoka Municipal Subway Fukuoka Urban Expressway Nishi Kyushu Expressway

Fukuoka City

Island City

Port of Hakata

/Chuo Wharf

Tenjin Station

Hakata Station Fukuoka Airport

Nanakuma Subway Line Extension Project

An intermediate station on the Nanakuma Line extension project that will connect Tenjin and Hakata Station, Kushida Shrine Station is planned to be adjacent to Canal City Hakata, FRC's flagship property.

Yakuin

Nakasu Kawabata Station

Gion Station

）

Hakata

Taihaku-

-

River

Center

）

）

dori

river

Kushida Shrine Station

Nakagawa（river

Shinkawa

City

（

Tenjin Station

Canal City Hakata

SubwayLines（

-doro

Hakata-

Kokutai

ekimae-dori

Hakata Station

doriSumiyoshi-

Nanakuma Line

Extension section

Tenjin-minami Station

Legend

Tenjin-minami ~

Hakata station

Operating sections

Airport Line

Source: Created by Fukuoka Realty Co., Ltd. based on data from Fukuoka City Transportation Bureau's Nanakuma Subway Line Extension Project Leaflet（April 2019）.

04

Fukuoka REIT Corporation 2021

Fukuoka REIT Corporation 2021

05

See p.4

Macroeconomic Environment around Fukuoka City

Tenjin Big Bang and Hakata Connected Projects

The Tenjin district of Fukuoka City received special authorization	seek to encourage the reconstruction of older buildings as highly
to relax Civil Aeronautics Act-related building height restrictions	earthquake-resistant,high-tech buildings.

■ Introduction □ Value-CreationActivities □ Foundation Underpinning Management □ Data Section

TOPIC FRC and Main Sponsor Fukuoka Jisho Co., Ltd.'s Initiatives in Tenjin Big Bang / Hakata Connected

Related Materiality ・Contributions to boosting the attractiveness and revitalization of Fukuoka and Kyushu

following its designation as a National Strategic Special Zone for
Global Startups & Job Creation. In addition, Fukuoka City has been
advancing the Tenjin Big Bang project to create new spaces and	Nanakuma Subway
Line Extension
employment, implementing original policies to deregulate floor area	(scheduled to start its
operation in the FY2022)

Concerning the Tenjin Nishi-Dori Business Center（Land with leasehold interest）acquired by FRC on June 1, 2021, we will be able to obtain stable rental income from sponsor and lessee Fu- kuoka Jisho Co., Ltd., during the redevelopment of the existing

Business Center is helping to attract companies from outside the

prefecture, including Japanet Holdings Co., Ltd., and operations have started at a high occupancy rate. In addition, Fukuoka Jisho Co., Ltd., is proceeding with the redevelopment

ratios, and working to significantly improve urban functions.

In the cityʼs Hakata district, the Hakata Connected project has started to better link the vitality and prosperity of Hakata Station to the surrounding area. In the area surrounding Hakata Station, which serves as the overland gateway to the Kyushu region, municipal functions are being improved via transport infrastructure enhancements, including an extension to the Nanakuma subway line and the redevelopment of Hakata Ekimae Street. Through such factors as the deregulation of floor area ratios, the project will also

• Targeted certications

Tenjin Big Bang

Nishitetsu Fukuoka	Kushida Shrine Station
(Tenjin) Station	Canal City Hakata	JR Hakata Station

Tenjin Big Bang

Hakata Connected

Note: Focus areas

• Relaxation of height restrictions

Tenjin Big Bang

building on the property and for the period until either the end of February or the end of August, whichever comes first after nine months elapse following the completion of the redevelopment （the date certification of inspection is obtained）. Once that period has elapsed, rental income in line with market fluctuations will be obtained. Due to this acquisition, we will capture the growth of the area arising from Tenjin Big Bang and contribute to boosting the attractiveness and revitalization of the city as a landowner. Main sponsor Fukuoka Jisho Co., Ltd., also completed the Tenjin Business Center, the first property deregulated by Tenjin Big Bang, in September 2021. As the property is equipped with Fukuokaʼs first large-scale seismic isolation structure and the incorporates measures to address such infectious diseases as COVID-19, the Tenjin

of the adjacent Tenjin MMT Building, and the group represented by Fukuoka Jisho Co., Ltd., has obtained preferential negotiation rights for the site of Fukuoka City Hallʼs former north annex. In collaboration with THE NISHI-NIPPON CITY BANK, LTD., Fukuoka Jisho Co., Ltd., is also advancing a series of redevelopments of the Bankʼs aging main branch, main branch annex, and head of- fice buildings under the Hakata Connected initiative.

In this way, FRC and sponsor Fukuoka Jisho Co., Ltd., are actively involved in the redevelopment of urban areas in Fukuoka City and are promoting initiatives that will lead to our contributions to boosting the attractiveness and revitalization of Fukuoka and the Kyushu region, as stated in the materiality.

• Buildings scheduled to be completed by December 31, 2024
• Working on infectious disease countermeasures, buildings scheduled to be completed by December 31, 2026（two-year extension from initial period）

• Around Fukuoka City Hall approx. 67 m（15 oors）

Examples of height restriction relaxation

• Tenjin, Meiji-dori district（west of the center of Watanabe-dori）

approx. 115 m（26 oors）

Fukuoka Office and Logistics Facility Market Conditions

The office building market in Fukuoka remains solid, and demand for logistics facilities is robust.

Introduction

Hakata Connected

Buildings scheduled to be completed by December 31, 2028

• Certication requirements

Tenjin Big Bang

• Tenjin, Meiji-dori district（east of the center of Watanabe-dori）

approx. 76 m（17 oors）to approx. 100 m（22 oors）

• Tenjin 1-chome district

approx. 80 m（18 oors）to approx. 96 m（21 oors）

Hakata Connected

None

• Expansion of oor area ratio relaxation policy（Policy to Encour- age the Upgrading of Central Urban Functions in Fukuoka City）

• Fukuoka Business District/Vacancy Rates and Supply and Demand of Office Buildings

			Completed floor space (total floor space)		Net absorption (absorption demand)			Vacancy rate
（Tsubo）									（%）
	50,000									20
				As of Oct. 2021

						Sendai	6.30%
						Central Tokyo (5 wards)	6.47%
40,000	15.38	14.72				Nagoya	5.39%	16
			13.23			Fukuoka	4.66%
			11.98		Osaka	4.45%
30,000				10.86	Sapporo	2.80%	12

• Fukuoka Business District/Average Asking Rents（Y2005=100）

The average asking rent of the Fukuoka business district rose 4.8%from January 2020 to October 2021

					Fukuoka		Central Tokyo (5 wards)
（%）									As of October. 2021
							Fukuoka		11,166 yen
130
								Central Tokyo (5 wards)	20,804 yen
			120												(Yen/Tsubo)
	110
100
		90
0	2005	2006	2007	2008	2009	2010	2011	2012	2013	2014	2015	2016	2017	2018	2019	2020	2021

Introduction

（1）High design quality buildings, including lower zones and public open spaces

（2）Building design that considers continuity with surrounding buildings

（3）Promotion of tree shade and flowers that enrich the town, and eye-catching greening

（4）Consideration given to Universal Design

Hakata Connected

（1）Creation of spaces to wander that create a connection with and expand on the surrounding area

（2）Creation of attractive plaza spaces that create a lively atmo- sphere, for example, by being used for events

（3）Promotion of tree shade and flowers that enrich the town, and eye-catching greening

（4）Consideration given to Universal Design

Tenjin Big Bang Hakata Connected

Buildings that contribute to an increase in activity, including those with plazas and other areas, which facilitate linkages and ripple effects, to be granted a maximum floor area ratio of 50%

Current oor area						Tenjin Big Bang bonus	Maximum floor
				area ratio
ratio relaxation						Hakata Connected bonus
system					50％
（Examples of relaxation of floor space ratios）
• Tenjin 1-chome south block	800％→1,400％（maximum）

• Tenjin 2-chome south block（along Meiji-doriAve.）700％→1,300％（maximum）

• Tenjin 1-chome north block（14th block）

600％→1,250％（maximum）

	10.99
20,000	7.70		8
6.30
	4.26		4.66
	3.07	3.79
10,000		4
		2.04	2.09
0	Building Overview（Note）		0
	Office/hotel building（25aboveground floors）	Tenjin Business Center

			Ofces 5th to 16th	oors
-10,000				（Provisional name）
		Rentable area: Approx.	30,000 m2
							Utilization project for the former
			Community building（11 aboveground oors）			Daimyo Elementary School site

Event hall（One aboveground oor）

-20,000

Note: The figures from 2005 to 2020 are based on the figures as of December.

Source: Prepared by Fukuoka Realty Co., Ltd., based on data from Miki Shoji Co., Ltd., Office Market Data.

• Trends in Leasable Floor Space and Occupancy Floor Space

Leasable / Floor space Occupancy floor space

（Tsubo）

800,000

600,000

400,000

0

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

Source: Prepared by Fukuoka Realty Co., Ltd., based on data from Miki Shoji Co., Ltd., Office Market Data.

Northern Kyushu Logistics Facility Supply and Demand Trends

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

(Planned) (Planned)

• Number of buildings to be rebuilt（number of building certication applications）

Tenjin Big Bang

52 buildings（Construction completed: 42 buildings）

Note: February 2015 to February 2021

Hakata Connected

15 buildings（Construction completed: 7 buildings）

Note: January 2019 to February 2021

• Efforts toward becoming a city designed to control

infection	Check
Tenjin Big Bang		Hakata Connected

Infectious disease controls newly added to the existing system to relax floor area ratio（Policy to Encourage the Upgrading of Central Urban Functions in Fukuoka City）

（Formerly）		Maximum 50%
Global competitiveness		floor area ratio relaxation
（New）Global competitiveness/		Maximum 50%
Infection controls		floor area ratio relaxation

Completed floor area (total floor area) includes the floor area for common spaces, etc., and therefore differs from the leasable floor area.

Notes: 1.Vacancy rates from 2008 to 2020 are based on the figures as of December 31.

Notes: 2.Office building-related data for each city are the data for areas and buildings included in surveys conducted by Miki Shoji Co., Ltd.

Notes: 3.Net absorption（absorption demand）shows the change in the occupied floor space during a specific period. It is calculated by subtracting the occupied floor space on De- cember 31 of the previous year from the occupied floor space on December 31 of the applicable year（data for 2021 is based on figures as of the end of August）. Completed floor space（total floor space）figures for 2021 and 2022 have not been finalized, and the floor space and expected completion dates are subject to change.

Source: Prepared by Fukuoka Realty Co., Ltd., based on data from Miki Shoji Co., Ltd., Office Market Data.

Note: Prepared by Fukuoka Realty Co., Ltd., based on press releases from Fukuoka City and the operating entity.

• Logistics Facility Supply/Demand and Vacancy Rates

New supply	New demand	Vacancy rate
（Tsubo）						（%）
60,000						12
50,000						10
40,000						8
30,000						6
20,000						4
10,000						2
0	2016	2017	2018	2019	2020	0

Note: The figures are covered total floor spaces (more than 5,000m²) which owned by the real estate investment company and real estate development company in Fukuoka and Saga.

Source: Prepared by Fukuoka Realty Co., Ltd., based on data of CBRE.

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Fukuoka REIT Corporation 2021

Fukuoka REIT Corporation 2021

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