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Fukuoka REIT Corporation

Introduction of Our REIT （8968）

http://www.fukuoka-reit.jp

2

Investment Highlights

Opportunity to invest

in a select retail/office

portfolio in the region.

Growing Fukuoka area

backed by strong

inflow of

younger population.

Right timing to

invest in Fukuoka.

Sophisticated

AM/PM team

with strong

local business support.

3

Profile

Company Profile • Company Fukuoka REIT Corporation

• Asset Management Company Fukuoka Realty

• Sponsors 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

• Listed date 6/21/2005 (Tokyo Stock Exchange, Fukuoka Stock Exchange)

Financial Highlights • Equity Market Cap JPY 94,593 million (as of 2/28/2006)

• Total Debt JPY 33,700 million (as of 2/28/2006)

• Debt Ratings A- (S&P)

Dividend Information • Previous Fiscal Period End 2/28/2006 (semi-annually, every February and August)

• Cash Dividend (actual) JPY 18,438 per share

• Yield (actual) 4.19% (as of 4/17/2006)

• Yield Gap (actual) 2.24% (Comparison with 10-year JGB as of 4/17/2006)

Current Pricing • Stock Price JPY 887,000 (as of 4/17/2006)

• Outstanding Units 92,050

• 52 Week High JPY 910,000 (6/21/2005)

• 52 Week Low JPY 763,000 (9/15/2005)

Portfolio Summary • Asset Types Retail 64.6%, Office 35.4% (as of 2/28/2006)

• Asset Areas Kyushu, Japan (mainly Fukuoka metropolitan area)

• Properties 7 (as of 2/28/2006) Two more properties newly acquired on march 2006

• Total Leasable Area 260,470.9 m2 (as of 2/28/2006)

• Occupancy 99.0% (as of 2/28/2006)

4

oVibrant, new and large properties represented by

Canal City Hakata “Vibrant, New and Large”

oThe Fukuoka metropolitan area boasts the top population

growth rate of the four largest metropolitan areas in Japan “A Leader in Population Growth”

oPipeline support by the Fukuoka Jisho Group, Kyushu’s largest

integrated developer

oProactive participation by leaders of Kyushu’s business world

including Kyushu Electric Power

“Proactive Sponsorship by Kyushu’s Business Leaders”

o Japan’s first region-specific REIT “Act Local, Think Global”

Summary

Concept

: : : A c t L o c a l , T h i n k G l o b a l : : :

6

Concept: Characteristics of Fukuoka REIT

Act Local, Think Global

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

Concept Hometown Portfolio Strategy Appendix

1

Differentiated Risks and Standout Returns 2

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 : : :

8

Hometown: Where is Fukuoka/Kyushu

Tokyo

Osaka

Fukuoka Pref. ■ 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

Kyushu Region ■ 7 prefectures ■ “#16” GDP in the world ■ 14mm Population ■ Industry －Semiconductor －Automotive －Processed food products

Hometown Concept Portfolio Strategy Appendix

9

Fukuoka Metropolitan Area

2.47 million people

Tokyo Metropolitan Area

30.28 million people

osaka Metropolitan Area

12.20 million people

Nagoya Metropolitan Area

5.46 million people

Hometown: Size of the Fukuoka Metropolitan Area

Source：Tabulated by the Japan Economic Research Institute based on the 2000 National Census conducted by the Ministry of Internal Affairs and Communications

Populations of Major Japanese Metropolitan Areas

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


Fukuoka is the Fourth Largest Metropolitan Area in Japan following Tokyo, Osaka and Nagoya


10

Hometown: Estimated Future Population Changes

90

100

110

120

130

140

150

1985 1990 1995 2000 2005 2010 2015 2020 2025 2030

Tokyo Metropolian Area

Nagoya Metropolitan Area

Osaka Metropolitan Area


Nation Wide

Medium estimates of the National Institute of

Population and Social Security Research

Actual values from national census

Actual Values Projected Future Values

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

Fukuoka Metropolitan Area’s Population will Continue to Grow


11

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

Country Comparison of Kyushu’s GDP

International Comparison of Kyushu Economy with Countries

Note: 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


Hometown: Size of the Kyushu Economy

12

Distribution of Primary Automobile and IT Companies in Kyushu

Hometown: Kyushu’s Industries ～Automotives / IT

Concentration of the Automobile Industry (Trends of Toyota Parts Companies)

Rich in Human Resources and Blessed by Nature, Kyushu Has a Huge Connection of Semiconductor and Automotive Plants

Toyota Motors Kyushu, Kanda Plant (Kanda-machi, Fukuoka Prefecture)

DENSO Kitakyushu Plant (Kitakyushu City)

Toyota Motors Kyushu (Wakamiya City, Fukuoka Prefecture)

Power Device Division, Mitsubishi Electronic (Fukuoka City)

Tokyo Electron Kyushu (Tosu City, Saga Prefecture)

Nissan Motor, Kyushu Plant (Kanda-machi,Fukuoka Prefecture)

ROHM Fukuoka (Yukuhashi City, Fukuoka Prefecture)

Daihatsu Auto Body (Nakatsu City, Oita Prefecture)

Oita Canon (Kunisaki City, Oita Prefecture)

Nagasaki Technology Center, Sony Semiconductor Kyushu (Isahaya City, Nagasaki Prefecture)

Aishin Kyushu (Jonan Town, Kumamoto Prefecture)

Fuji Photo Film (Kikyuyo Town, Kumamoto Prefecture)

Fujitsu Integrated Microtechnology, Kyushu Plant (Satsuma-Sendai City, Kagoshima Prefecture)

Toshiba, Oita Plant (Oita Prefecture)

NEC Kyushu (Kumamoto Prefecture)

Asahi Kasei Microsystems Kyushu (Nobeoka City, Miyazaki Prefecture)

Honda Motor, Kumamoto Plant

Miyazaki Oki Electric (Kiyotake Town, Miyazaki Prefecture)

KYOCERA Corporation Kagoshima Kokubu Plant (Kirishima City, Kagoshima Prefecture)

Automobile

IT

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)

Recent Trends in Kyushu of Toyota Parts Companies


13

Source : Official Announcement of Land Price by the Ministry of Land, Infrastructure and transport

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

0

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

30,000,000

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

Tokyo

Nagoya

Osaka

Sapporo

Sendai

Hiroshima

Fukuoka

（％）

-30

-20

-10

0

10

20

30

Tokyo Nagoya Osaka

Sapporo Sendai

Hiroshima Fukuoka

Tokyo

Osaka Nagoya Fukuoka

Sapporo Sendai

Nagoya Osaka Fukuoka Tokyo

Sendai Sapporo Hiroshima

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

-0.4

Fukuoka Land Prices Are Following the Path of Tokyo


(yen per ㎡）

14

Source: the Ministry of Land, Infrastructure and Transport


Fukuoka City (2004-2005)

Year-on-year variation (%)


15


Fukuoka City (2005-2006)

Source: the Ministry of Land, Infrastructure and Transport


Year-on-year variation (%)

Portfolio

: : : V i b r a n t , N e w a n d L a r g e : : :

17

(as of 2/28/2006) Portfolio: Portfolio Table

Property Use Age

Invest-ment

Rate (%)

(Note1)

Acquisi-tion

Price (mm yen)

Appraisal

Value

(mm yen)

Acquisi-tion Cap

（％） (Note2)

Tenants

Floor

Area

（㎡） (Note3)

Total

Leasable Area

（㎡）

Lease

Area

（㎡）

Occu-

pancy（％）

Canal City Hakata Retail 9y 10m 37.5 32,000 32,600 6.0 24 51,482.82 47,909.65 47,300.24 98.7

Park Place Oita Retail 3y 10m 18.4 15,700 17,100 6.5 80 75,500.03 100,664.98

(Note4) 100,418.98 99.8

SunLiveCity Kokura Retail 11m 7.8 6,633 6,770 6.6 1 58,642.38 61,450.22

(Note4) 61,450.22 100.0

Kominedai

Community Mall Retail 33y 8m 0.9 740 750 7.1 4 3,041.92 3,743.12 3,743.12 100.0

Retail property total －－ 64.6 55,073 57,220 － 109 188,667.15 213,767.82 212,912.56 99.6

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 85,273 88,670 － 181 257,460.58 262,979.61 260,470.90 99.0

Weighted average － 7y － 12,182

(Note5) －－－－－－－

Name Type of Assets Acquisition

Price （mm yen）

Estimated ＩＲＲ（％）

CCH Bridge

Senior Equity Senior Equity 3,400 8.0

Property Use Age

Acquisition

Price

（mm yen）

Appraisal

Value

（mm yen)

Acquisi-tion

CAP（％）

(Note2)

Tenants

Floor Area

（㎡）

(Note3)

Total Leasable

Area

（㎡）

Lease Area

（㎡） Occupancy

（％）

Taihaku Street

Business Center Office 4y 7,000 7,150 6.0 65 20,379.82 14,651.87 14,452.55 98.6

“City House Tenjin

Keyaki Street” Residence

Will be completed on

Nov. 2007 1,111 1,120 5.4 42

3,531.37

(Note6) －－－

Other Assets

(Reference) *Properties newly acquired in March 2006 and after

Portfolio Hometown Concept Strategy Appendix

(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

18

Portfolio: Investment Type Classified Table

Category Definitions and Keys

Retail

Urban Key is to be located in popular downtown areas

Street shops, department stores and large specialty shops

Regional

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

Community

Shopping center linked to daily living

Road side category killers

Neighborhood shopping centers with bookstores, restaurants, etc.

built around a strong supermarket

Office

Class Ａ

Superior properties that satisfy unique Class A standards (location, scale, specs, age and other categories and used to make the acquisition decision)

Leaseback to blue-chip

firms Sale and leaseback transactions with local blue-tip firms

Residence Class Ａ Location, spec, earthquake-resistant

Well balanced in supply and demand for tenant type (families)

*1 Acquired on March 16, 2006 *2 Contract awarded on March 31, 2006

OtherKyushu area

24.8%

Fukuoka

Urban area

75.2%

Residence

1.2%

Office

39.8%Retail

59.0%


Canal City Hakata

Park Place Oita

SunLiveCity Kokura

Kominedai

Community Mall

Canal City Business Center Building

Gofukumachi Business Center

Sanix Hakata Building

Taihaku Street Business Center *1

City House Tenjin Keyaki Street *2

19

(as of February 2006) Portfolio: Portfolio Summary

United Cinema

2.8%

Comme Ca Store

3.0%

Sanyo Shimpan

2.3%

Sports Authority

3.2%Washington

Hotel

4.9%

T・Joy2.2%

K's Denki

5.2%

SunLive

23.6%

Others

28.2%

JUSCO

22.5%

Canal City OPA

2.2%

Top Ten tenants （Based on the lease area）

years 10

or more

66.6%

Less than

5 years

23.3%

years to less 5

than 10 years

10.1%

Length of Lease Remaining （Based on the lease area）

Over 10 years0.9%

Under 5 yrs

39.3% years to 5

less than 10

years

59.8%

Portfolio Share by Property Age （Based on acquisition price）

Variable rent

1.8%

Fixed Rent

+

Variable Rent

42.4%

Fixed Rent

55.8%

Lease Format （Based on rents）

Variance of the Exp. Date of Rental Period （Based on the lease area）

0%

5%

10%

15%

20%

25%

30%

35%

1 2 3 4 5 6 20 21 19 18 17 16 15 14 13 12 7 8 9 10 11 22


(years)

20

Portfolio: Overview of Canal City Hakata

Overview •Address 1-chome, Sumiyoshi, Hakata

Ward, Fukuoka City

•Total leasable area 47,909.65 m2

•Built April 15, 1996

•Property manager Fukuoka Jisho Co., Ltd.

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

Main Stores •Washington Hotel

•Comme Ca Store

•United Cinema （cinema complex）

•OPA （Canal City OPA）

•Sports Authority


21

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).

Concept Portfolio Hometown Strategy Appendix

0

20

40

60

80

100

120

140

Mar

ch 200

5Ap

rilMay

June Ju

ly

Augu

st

Sept

embe

r

Octob

er

Novem

ber

Decem

ber

Janu

ary

2006

Febr

uary

Dept Store in Fukuoka

Canal City Hakata

Gross Sales History at Canal City Hakata Comparison with Sales Trends at Department Stores In Fukuoka City

(million yen) (%)

22

Portfolio: New Acquisition ～CCH Bridge Senior Equity

As of 2/27/2006

• Acquisition Price: JPY3,400 mm

• Estimated IRR: 8%

Characteristics

• 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 *The portion framed in white is that possessed by the Canal City Hakata SPC


23

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 2-chome, Koen Dori Nishi, Oita City

•Total leasable area 100,664.83m2

•Built March 26, 2002; April 17, 2002;

April 28, 2004

•Property manager FJ Real Estate

Main Stores •Jusco

•K’s Denki

•T Joy

•Sports Authority

•Plaza Capcom

Portfolio: Overview of Park Place Oita (as of March 31, 2006)


24

Oita Big Eye

(World Cup Stadium),

Home ground of the Oita

Trinita J-League soccer team

（Note） Some parts differ from today as the drawing is a plan drawn up by the Fukuoka Jisho Group upon launch of the development.

Park Place Oita

Mall with about 140 specialty shops including Jusco and the T Joy cinema complex

Park Place Oita Koen Street Housing Development

656 lots have been sold. Development of another 604 lots is planned.

Gross Sales History at Park Place Oita

(Note) Tabulation of monthly sales for respective stores of Park Place Oita

(million yen)

0

500

1,000

1,500

2,000

2,500

3,000

March April

May June

July August

September October

November December

January February

2004/3～ 2005/2

2005/3～ 2006/2

0

20

40

60

80

100

120

Mar

ch 2

005

Apr

il

May

June

July

Aug

ust

Sep

tembe

rOct

ober

Nov

embe

rDec

embe

rJa

nuar

y 20

06

Febr

uary

Large-scale Retail Store inKyushu

Park Place Oita

Comparison with Sales Trends at Large-scale Retail stores in Kyushu

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.

（%）

Portfolio: Overview of Park Place Oita (as of March 31, 2006)


25

Overview

• Address: 2-chome, Kami Kuzuhara, Kokura Ward,

Kitakyushu City

• Total leasable area: 61,450.22m2

• Built: March 17, 2005

• Property manager: Fukuoka Jisho Co., Ltd.

Main tenants

SunLive

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 m2), a large commercial zone

Portfolio: Property Overview (as of March 31, 2006)

Overview

Address: 1-chome Kominedai, Yahatanishi Ward,

Yawata, Kitakyushu City

Total leasable area: 3,743.12m2

Constructed: June 3, 1972, March 15, 1997, May 12,

1997 and June 9, 1997

Property manager: Fukuoka Jisho Co., Ltd.

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 8,000m2 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

Kominedai Community Mall

SunLiveCity Kokura


26

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 Kami Gofukumachi, Hakata

Ward, Fukuoka City

• Total leasable area 19,906.21m2

• Built October 16, 2003

• Property manager Fukuoka Jisho Co., Ltd.

Main Tenants • Sanyo Shimpan

• NTT Marketing Act Kyushu

• Sony Life Insurance

• Suntory

• Sunny

Portfolio: Overview of Gofukumachi Buisiness Center


27

Overview

• Address: 1-chome, Sumiyoshi, Hakata Ward,

Fukuoka City

• Total leasable area: 23,011.91m2

• Built: April 15, 1996


Canal City Business Center Building

Main tenants

• TOTO

• Bell System 24

• USEN Corporation

• Aflac Japan

• Mitsubishi Electric Building

Techno-Service

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

Portfolio: Property Overview (as of March 31, 2006)


Overview

• Address: 2-chome, Hakataeki Higashi, Hakata

Ward, Fukuoka City

• Total leasable area: 6,293.69㎡

• Built: March 31, 2001


Sanix Hakata Building

Main tenants

• Sanix

• The Nishi-Nippon City Bank

• ROHM

• Idemitsu Kosan

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

28

Portfolio: Property Overview

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

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


(as of March 31, 2006)

Main tenants

• NTT Comware

• The Tokio Marine Nichido

• Outsourcing Business

• Yokogawa Electric

• Fujitsu Network solutions

• Tokio Marine & Nichido Life


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)

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

City House Tenjin Keyaki Dori

29

(as of February 2006) History of Occupancy Rate by Property

0

20

40

60

80

100

2005.9 2005.1 2005.11 2005.12 2006.1 2006.2

Canal City Hakata (%)

0

20

40

60

80

100

2005.9 2005.1 2005.11 2005.12 2006.1 2006.2

Park Place Oita (%)

0

20

40

60

80

100

2005.9 2005.1 2005.11 2005.12 2006.1 2006.2

SunLiveCity Kokura (%)

0

20

40

60

80

100

2005.9 2005.1 2005.11 2005.12 2006.1 2006.2

Canal City Business Center Building (%)

0

20

40

60

80

100

2005.9 2005.1 2005.11 2005.12 2006.1 2006.2

Gofukumachi Business Center (%)

0

20

40

60

80

100

2005.9 2005.1 2005.11 2005.12 2006.1 2006.2

Sanix Hakat Building

(%)

0

20

40

60

80

100

2005.9 2005.1 2005.11 2005.12 2006.1 2006.2 2006.3

Taihaku Street Business Center ※ (%)

0

20

40

60

80

100

2005.9 2005.1 2005.11 2005.12 2006.1 2006.2

Kominedai Community Mall

(%)

※ as of March 2006

98.7％ 99.8％ 100.0％

100.0％ 93.5％

99.2％ 100.0％ 98.6％


Strategy

::: Proactive Sponsorship by Kyushu’s Business Leaders :::

31

Strategy: Investment Strategy

Focusing on Fukuoka Metropolitan Area & Retail Properties

Strategy Portfolio Hometown Concept Appendix

32

Strategy: External Growth Roadmap

Plan to Double our Asset Size by the End of 2008


33 (The above properties will not necessarily all be incorporated into our portfolio)

Strategy: Proactive Support by Sponsors

Marinoa City Fukuoka Riverwalk Kitakyushu

Tenjin Kirameki-dori Building (New Iwataya Building)

DEODEO Fukuoka Higashi Store

Hakata Ekimae Business Center

Nishijin Condominiums

Developments of the Fukuoka Jisho Group

(The above properties will not necessarily all be incorporated into our portfolio)

Nexus Momochi Residential Tower Grand Hyatt Fukuoka Hyatto Regency Fukuoka

(as of April 21, 2006)

◆Kyushu Railway Company

• Capital: 16,000 million

• Railway business, tourism, hotels, food services, real estate

(residence, station buildings) in Kyushu

Leading Integrated Regional Developer + Seven Leading Companies of Kyushu Economy


34

Acquisition Strategies

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

“Reasonable Price”

“High Quality”

Price: JPY 6,600 mm Acquisition CAP:

6.6%

SunLiveCity Kokura （as of 7/1/2005）


5.4%

City House Tenjin Keyaki Street （as of 3/31/2006）


5.9%

Sanix Hakata Bldg （as of 9/30/2005）

Price: JPY 700 mm Acquisition CAP:

7.1%

Kominedai Community Mall （as of 12/20/2005）


6.0%

Taihaku Street Business Center （as of 3/16/2006）

*The acquisition cap is arrived at by dividing the appraised DCF net cash flow at the time of acquisition by the acquisition price


35

Strategy: Acquisition of Properties Newly Developed by Sponsors

Acquire and Develop Mid-Size Community Malls throughout Kyushu


36

Strategy: Revenue Growth by Value Added Renovation

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

Park Place Oita

Strengthening the Differentiation Strategy of the “Park Entertainment” Concept


37

Strategy: Revenue Growth by Value Added Renovation

Park Place Oita has increased revenue through creative renovation


38

Borrowings (the 3rd Fiscal period)

No. Lender Value

(million yen)

Borrowing date

Payment

deadline

Payment method

Interest Rate Collateral Fixed /

Variable

1 Development Bank of Japan 12,000 2004.11.9 2009.8.31 Bullet

Payment 1.39% Fixed Yes

2

【Syndication Loan】

Aozora Bank（Agent） 1,000

2005.6.29 2008.6.23 Bullet

Payment 0.59% Variablr Yes

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 2005.6.29 2006.6.23

Bullet Payment

0.56% Variable Yes 4 The Nishi-Nippon City Bank 3,100

5 The Nishi-Nippon City Bank 3,700 2005.9.30 2006.3.31 Bullet Payment

0.46% Variable Yes 6 The Nishi-Nippon City Bank 3,400 2006.2.27 2007.2.27

Commitment line

The Bank of Fukuoka Ceilling 3,000 2005.6.29 2006.6.29

※Balance as of 2/28/2006 0

Weighed average interest rate

Total 33,700 0.84%

(as of February 28, 2006)


39

Financial Strategy

Term Ratio

-Long

term

55%

-Short

term

45%

Variable Ratio

Fixed

36% Variable

64%

117

34

66

120

0

20

40

60

80

100

120

140

2006 2007 2008 2009

Repayment Period

Payment Deadline (100 mm yen)

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

Fukuoka REIT Corporation Long-Term Issuer Rating


40

oVibrant, new and large properties represented by

Canal City Hakata “Vibrant, New and Large”

oThe Fukuoka metropolitan area boasts the top population

growth rate of the four largest metropolitan areas in Japan “A Leader in Population Growth”

oPipeline support by the Fukuoka Jisho Group, Kyushu’s largest

integrated developer

oProactive participation by leaders of Kyushu’s business world

including Kyushu Electric Power

“Proactive Sponsorship by Kyushu’s Business Leaders”

o Japan’s first region-specific REIT “Act Local, Think Global”

Summary

Appendix 1 (Financial Data)

42

(as of February 28, 2006)

Category

Data Remarks (definition of indices)

Financial

Indices

ROA 1.9% Ordinary profit/(total assets at period start + total assets at period end)/2

Annual conversion 3.8% Calculated from the management days of the 3rd fiscal period

ROE 3.3% Net profit/(total assets at period start + total assets at period end)/2

Annual conversion 6.7% Calculated from the management days (181)

of the 3rd fiscal period

LTV 35.6% Interest-bearing debt at period end/

total assets at period end

Leasing NOI 2,654 mm

yen

Real Estate leasing business revenues – real estate

leasing business expenses + current depreciation

Fund from operations (FFO)

2,259 mm yen

Net profit + current depreciation

3rd period results (181 days)

September 1, 2005 – February 28, 2006

2nd period results (actual management period: 296 days)

September 1, 2004 –

August 31, 2005

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

Distribution per unit 18,438 yen 19,014 yen

Total assets 94,593 mm yen 87,461 mm yen

Net assets 50,865 mm yen 50,918 mm yen

Unitholders’ equity 53.8 % 58.2 %

Depreciation 562 mm yen 764 mm yen

Financial Account Settlement Highlights for the 3rd Fiscal Period

Distribution per unit

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

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

ROA & ROE Fukuoka REIT boasts a profitability among the highest of J-REITs

Appendix Strategy Portfolio Hometown Concept

43

3rd period results (181 days)

September 1, 2005 – February 28, 2006

2nd period results (actual management period: 296 days)

September 1, 2004 – August 31, 2005

Category Value (yen) Percentage

(%) Value (yen)

Percentage

(%)

I. Operating profit and losses

1. Operating revenues 4,050 100.0 5,857 100.0

Real estate leasing revenues 3,879 5,632

Other revenue from real estate leasing 171 225

3. Operating expenses 2,299 56.8 3,172 54.2

Real estate leasing expenses 1,959 2,765

Asset management fees 249 319

Custodian fees 7 6

General administration fees 29 26

Director compensation 9 19

Other operating expenses 44 36

Operating profit 1,571 43.2 2,685 45.8

II Non-operating profit and loss

1. Non-operating revenues 131 3.2 19 0.3

Interest received 0 0

Consumption tax for tax exempt firm, etc. 128 －

Other non-operating revenues 3 19

2. Non-operating expenses 184 4.5 845 14.3

Interest expense 133 273

New investment unit issuance cost － 36

Expenses related to public offering of investment units － 220

Amortization of establishment cost 5 5

Expenses related to financing 39 261

Other non-operating expenses 5 46

Ordinary profit 1,698 41.9 1,859 31.8

Extraordinary loss －－ 95 1.6

Net profit before tax 1,698 41.9 1,764 30.1

Income and other taxes 1 2

Net profit 1,697 41.9 1,761 30.1

Carried forward profit or (loss) 0 (11)

Unappropriated profit 1,697 1,750

Distribution per unit (yen) 18,438 yen 19,014 yen

Operating Profit 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

Real Estate Leasing Expenses 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

Consumption Tax Consumption tax acceptance earnings generated since Fukuoka REIT was a tax exempt operator (temporary development limited to the 3rd period)

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

(million yen)

Profit and Loss Statement for the 3rd Fiscal Period


44

3rd period (as of February 28, 2006)

2nd period (as of August 31,

2005)

Variation

Category Value Share (%) Value Value

Liabilities

I. Current liabilities

Accrued business fees 313 262 50

Short-term debt 15,100 8,000 7,100

Accounts payable 41 133 (91)

Expenses payable 228 228 (0)

Income taxes payable 1 2 (1)

Rent received in advance

481 465 15

Deposits held 473 741 (268)

Total current liabilities 16,638 17.6 9,834 6,804

II. Fixed liabilities

Long-term debt 18,600 18,600 －

Key money and security deposits on deposit

107 － 107

Key money and security deposits in trust

8,382 8,109 272

Total fixed liabilities 27,089 28.6 26,709 380

Total liabilities 43,728 46.2 36,543 7,184

Unitholders’ equity

I. Unitholders’ capital

Unitholders’ capital 49,167 52.0 49,167 －

II. Surplus

Retained earnings 1,697 1,750 (53)

Total surplus 1,697 1.8 1,750 (53)

Total unitholders’ equity

50,865 53.8 50,918 (53)

Total liabilities and unitholders’ equity

94,593 100.0 87,461 7,131

(million yen)

Balance Sheet for the 3rd Fiscal Period (as of February 28, 2006)

Management of tangible fixed assets Canal City Hakata 32,337 Canal City Business Center Building 14,692

Park Place Oita 16,407 Gofukumachi Business Center 11,204 SunLive City Kokura 6,698 Sanix Hakata Building 4,650 8.2

(14.3)

10.3

－

6.2

(23.7)

Variation

(%)

7,131

(5)

(5)

8,449

3,405

(16)

－

3,421

5,044

38

2,583

30

61

△5

1,549

641

144

(1,312)

(78)

(1,595)

(49)

(196)

607

Value

Variation

100.0 87,461 100.0 94,593 Total assets

0.0 39 0.0 33 Total deferred assets

39 33 Establishment expenses

III. Deferred assets

93.7 81,891 95.5 90,341 Total fixed assets

0.2 119 3.7 3,525 Total investment and other assets

109 93 Long term pre-paid expenses

10 10 Guarantees and deposits

－ 3,421 Investment securities

2. Investment and other assets

93.5 81,771 91.8 86,816 Total tangible fixed assets

－ 38 Temporary account of construction in trust

48,485 51,069 Land in trust

152 183 Tools and fixtures in trust

151 213 Machinery and equipment in trust

215 210 Structure in trust

32,765 34,315 Building in trust

－ 641 Land

－ 144 Building

1. Tangible fixed assets

II. Fixed assets

6.3 5,531 4.5 4,218 Total current assets

154 75 Other current assets

1,595 － Consumption tax receivables

181 132 Operating receivables

2,781 2,585 Cash and deposit in trust

817 1,424 Cash and cash equivalents

I. Current assets

Assets

Share (%)

Value Share (%)

Value Category

2nd period (as of August 31,

2005)

3rd period (as of February 28,

2006)

(million yen)


45

Cash Flow Statement for the 3rd Fiscal Period

3rd period (181 days) September 1, 2005 – February 28, 2006

2nd period (actual management period: 296 days) September 1, 2004 – August 31, 2005

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

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

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

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

(million yen) (million yen)

・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


46

Distribution in the 3rd Fiscal Period

Category

Forecast for the 4th fiscal

period (184 days)

March 1, 2006

- August 31, 2006

3rd fiscal period results (181 days)

September 1, 2005 - February 28, 2006

2nd fiscal period results

(actual management period: 296 days)

September 1, 2004

- August 31, 2005

Operating revenues

Operating profit

Ordinary profit

Net profit

Distribution per unit (yen) Distribution per FFO (yen)

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

4,454

－

1,677

1,675

4,050

1,751

1,698

1,697

18,438

24,550

5,857

2,685

1,859

1,761

19,014

27,445 －

18,200

External and internal growth pushed operating revenues up 404 million yen However, accepted profit from consumption tax was lost and a budget was appropriated to account for increases in interest rates Project roughly same outcome as last fiscal period

＋

ー

→

・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


47

Appendix: Leasing Business Income and Expenditures by property (3rd fiscal Period)

Canal City Hakata Park Place Oita SunLiveCity

Kokura

Canal City Business Center

Building

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

Rent （Note 1） 1,381 1,379 877 842 262 255 695 677 490 490 158 13

Other Incom

（Note 2) 64 56 23 14 0 0 5 7 64 59 12 0

Total leasing business expenses

510 514 396 384 15 12 258 244 182 170 31 1

Tax and other

Public charges 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

ＮＯＩ（Note 5） 935 921 504 473 247 242 442 440 373 378 139 12

Comparison to

Previous fiscal

period

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

(as of February 28, 2006) （mm yen）


48

(as of April 17, 2006) Appendix: Performance on Pricing

History of Relative Stock Prices (June 21, 2005 =100)

600,000

700,000

800,000

900,000

6/21 7/14 8/9 9/1 9/28 10/24 11/17 12/13 1/11 2/3 2/28 3/24

0

3,000

6,000

9,000

12,000

15,000

Trade Volume

Investment Unit Price

History of Investment Unit Price （through April 17, 2006）（円）

Stock Price 887,000yen

High 910,000yen (6/21/2005）

Low 763,000yen (9/15/2005）

Current Pricing (as of 4/17/206)

4/17 4/17

80%

90%

100%

110%

6/21 7/21 8/21 9/21 10/21 11/21 12/21 1/21 2/21 3/21

REIT Index

FRC


49

(as of February 28, 2006) Analysis of Investor Attributes

Distribution by Investor Category (Breakdown of Investment Units)

Rank Investors Investment Units Held Share

1 Fukuoka Realty Holdings,

Co, Ltd. 20,000 21.73%

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%

10 The Daisan Bank, Ltd. 1,120 1.22%

Largest Investors

40.64%

46.85%

28.11% 9.05%

10.88%

20.95%

14.23%

1.25%

1.58%

26.46%

0% 20% 40% 60% 80% 100%

End of second fiscal period

End of third fiscal period

Financial institutions

Securities companies

Other corporations

Foreign corporations

Individuals

Distribution of Investors by Region (Breakdown of Investment Units)

32.97%

37.10%

30.89%

29.33%

8.99%

10.51%

1.93%

1.73%

1.47%

1.83%

6.24%

4.93%

8.92%

9.81%

5.80%

4.06%

1.90%

1.59%

0% 20% 40% 60% 80% 100%

Hokkaido

Tohoku

Kanto

Chubu

Kinki

Chugoku

Shikoku

Kyushu

Overseas

End of second fiscal period

End of third fiscal period


50

Appendix:Management Staff Leading the Act Local, Think Global Strategy

Post Job Name Resume

President/ Chairman of the Board

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)

52

Appendix: Gateway to Asia

〜1 hr Busan

1〜2 hrs Osaka

Tokyo

Seoul

Shanghai

Dalian

Qingdao

2〜3 hrs Sapporo

Shenyang

Taipei

Beijing

3〜4 hrs Guangzhou

Hong Kong

Manila

4 hrs or more Xian

Ho Chi Minh

Chengdu

Bangkok

Guilin

Distance from Fukuoka to Major Cities Flight Time from Fukuoka Airport to Major Cities

Fukuoka is Centrally Located between Shanghai and Tokyo


53

Appendix: Kyushu’s Industries～Automotives/Semiconductors

0

20

40

60

80

100

1999 2000 2001 2002 2003

0

2

4

6

8

10

Passenger Cars Produced Share in Japan

Number of Passenger Cars Produced in Kyushu

Source: Outline of Kyushu Economy (Kyushu Economic Research Center)

(%) (10 thousand vehicles)

finished

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

1999 2000 2001 2002 2003

0

5

10

15

20

25

30

35

IC production Share in Japan

Integrated Circuits Production Value in Kyushu

Source: Kyushu Economic and Industrial Data (Kyushu Bureau of Economy, Trade and Industry)

(%) (100 million yen)

Rich in Human Resources and Blessed by Nature, Kyushu Has a Huge Connection of Semiconductor and Automotive Plants

“Car Island”

“Silicon Island”


54

Appendix: Office Vacancy Rate

0

10

20

30

40

50

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

Fukuoka

Tokyo

Nagoya

Osaka

Sapporo

Sendai

Vacancy Rate (New Buildings Less than One Year in Age

0

2

4

6

8

10

12

14

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

Fukuoka

Tokyo

Nagoya

Osaka

Sapporo

Sendai

Vacancy Rate (Overall Average)

Fukuoka

Tokyo

Osaka

Nagoya

Sendai

Sapporo

Source: “Office Building Market Report by Region” issued by Miki Shoji Co., Ltd.

（%）（%）

Note) There were no new buildings completed in Sendai in 2000 and Sapporo in 2001.

Sendai

Fukuoka Tokyo

Sapporo

Nagoya Osaka

Vacancy Rate of New Buildings has Improved


55

Appendix: Average Office Rent

0

5,000

10,000

15,000

20,000

25,000

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

Fukuoka

Tokyo

Nagoya

Osaka

Sapporo

Sendai

Sendai Fukuoka Nagoya

Average Rent Average Rent

New Buildings Less than One year in Age

0

5,000

10,000

15,000

20,000

25,000

30,000

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

Fukuoka

Tokyo

Nagoya

Osaka

Sapporo

Sendai

Note) There were no new buildings completed in Sendai in 2000 and Sapporo in 2001.

（yen/month/tsubo）（yen/month・tsubo）

Sendai

Tokyo

Tokyo

Fukuoka

Sapporo Sapporo Nagoya

Osaka

Osaka

Source: “Office Building Market Report by Region” issued by Miki Shoji Co., Ltd.

Rent Levels in Fukuoka are Stable at Around Half the Levels of Tokyo


56

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

Content Classifications of Earthquake Insurance

Property No.

Property Total Building Repurchase

Price

Portfolio

PML

Insurance Value

Indemnifi- cation

Amount

A-1 Canal City

Hakata

4７.５３ billion

yen 4.685％

1.5 billion

yen

10 million

yen

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

（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

eruptions

Appendix: Description of Earthquake Insurance

Fukuoka REIT has Taken Out Earthquake Insurance Policies for All of its Properties


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Investor

Properties

Sponsors

Fukuoka Jisho,

Kyushu Electric Power, etc.

Investment

Financial institutions

Asset custodian Provider of general

administrative affairs

Mitsubishi UFJ Trust and Banking Sumitomo Trust & Banking

Investment corporation

Issuer of J-REIT investment securities and owner of

assets

Fukuoka REIT Corporation

Advantage of reduced corporation taxes

Asset manager

Fukuoka Realty Property manager

Fukuoka Jisho

Consignment of real estate management Taxation

on dividends

Management

instruction

Consignment of

management

Consignment of asset custodian and general administrative affairs

Asset management

Property management

Investment

Investment

Investment securities

Dividends

Rental income

Loan

Appendix: J-REIT Structure


58

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).

59

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