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					               Fukuoka REIT Corporation
               (8968)




Overview of Fifth Fiscal Period Performance
    (September 1, 2006 – February 28, 2007)

              http://www.fukuoka-reit.jp

        Fukuoka Realty Co., Ltd.
REIT Overview

       Profile
       Profile                                                               Current Pricing
                                                                             Current Pricing
     【Name】                 Fukuoka REIT Corporation                             【Unit Price】        1,130,000 yen (as of April 10, 2007)
     【Asset Manager】        Fukuoka Realty                                       【Outstanding Units】107,050
     【Sponsors】             Fukuoka Jisho, Kyushu Electric Power,                【Market Cap 】       120.9 billion yen
                            The Bank of Fukuoka,
                            The Nishi-Nippon City Bank,                          【High (since IPO)】 1,300,000 yen (February 26, 2007)
                            Nishi-Nippon Railroad, Saibu Gas,                    【Low (since IPO)】 763,000 yen (September 15, 2005)
                            Kyudenko, Kyushu Railway Company,
                            Royal Holdings
                                                                                                      Note:The values are arrived at using the assets under management and assets
     【Listed date】          June 21, 2005 (TSE and FSE)                       Portfolio Summary
                                                                              Portfolio Summary            scheduled to be acquired (contract base) as of April 10, 2007. The
                                                                                                           planned acquisition price is used for City House Tenjin Keyaki Dori
                                                                                                           (tentative) and the preferred silent partnership interest is not included.
                                                                                                           The figures for the total leasable area and occupancy are the figures for
                                                                                                           the assets under management as of February 28, 2007.
     Financial Highlights
     Financial Highlights
                                                                                 【Asset Types】       Retail 62.6%, Office 34.5% and
     【Total Assets】         117.2 billion yen                                                        Residential 2.9%
                            (as of February 28, 2007)                            【Asset Location】    Fukuoka metropolitan area 72.1%,
     【Total Debt】           44.1 billion yen                                                         other Kyushu 27.9%
                            (as of February 28, 2007)                            【Properties】        12
     【Debt Rating】          S&P A- (stable)                                      【Total Leasable Area】 304,024.87m2
                                                                                 【Occupancy】         99.4%

     Dividend Information
     Dividend Information

     【Previous Fiscal Period (5th) End】 February 28, 2007 (semi-annual periods ending every February and August)
     【Cash Dividend for 5th Fiscal Period (actual)】 17,341 yen per unit
     【Yield】 3.1% (Annualized dividend for the 5th period/the investment unit price as of April 10, 2007)
     【Spread vs. JGB】 1.4% (Comparison with 10-year JGB as of April 10, 2007)
                         Table of Contents
                         Table of Contents


                        1. Presentation of Accounts for Fifth Fiscal Period                          ……………… 4


                        2. Portfolio      ………………………………………………………………………………12


                        3. Acquisition Strategy            ……………………………………………………………17


                        4. Management            ………………………………………………………………………21


                        5. Finance        ………………………………………………………………………………26


                        6. Compliance          …………………………………………………………………………30


                        7. Environmental Analysis and Management Policy                              ………………33


                        8. Appendix        …………………………………… ………………………………………41




These materials may contain future performance, plans, management targets and strategies. These forward-looking descriptions are based on present
assumptions on future events and trends in the business environment, but such assumptions may not necessarily be accurate. Actual results may differ
materially due to various factors. Fukuoka REIT Corporation nor Fukuoka Realty shall be liable for the accuracy, rationality and completeness of
information contained in these materials, whether they were prepared by Fukuoka REIT Corporation or Fukuoka Realty or provided by a third party.
These materials have not been prepared to entice investment. When applying to purchase investment units issued by Fukuoka REIT Corporation, do so
based on your own judgment and responsibility.
Presentation of Accounts
 for Fifth Fiscal Period
Presentation of Accounts for Fifth Fiscal Period                  Portfolio             Acquisition Strategy      Management        Finance         Compliance    Environmental Analysis and Management Policy       Appendix




Settlement Highlights of the 5th Fiscal Period                                                                                                       (ended February 2007)

                                                                5th Fiscal Period                              4th Fiscal Period                                        Primary Factors for Period-on-Period Variation
                   Category                                        September 1, 2006                             March 1, 2006                Variation                            in Net Profit Compared

                                                                   〜February 28, 2007                           〜August 31, 2006                                      Acquisition of 3 new properties during the 5th fiscal period
                                                                                                                                                                       ●Increase in property NOI
                                                                                                                                                                       ●Increase in property NOI
    Operating revenues                                                    4,870 mm yen                           4,496 mm yen                 374 mm yen                                     +315 million yen
                                                                                                                                                                                             +315 million yen
                                                                                                                                                                       ● Increase in depreciation expenses
                                                                                                                                                                       ● Increase in depreciation expenses
                                                                                                                                                                                             -69 million yen
    Operating profit                                                      2,210 mm yen                           1,983 mm yen                 227 mm yen                                      -69 million yen
                                                                                                                                                                       ● Increase in general administration costs
                                                                                                                                                                       ● Increase in general administration costs
                                                                                                                                                                                             -19 million yen
                                                                                                                                                                                              -19 million yen
    Ordinary profit                                                       1,866 mm yen                           1,716 mm yen                 149 mm yen
                                                                                                                                                                                    Conversion to long-term debt
                                                                                                                                                                                  during the 4th and 5th fiscal periods
    Net profit                                                            1,856 mm yen                           1,715 mm yen                 141 mm yen               ● Increase in financing cost
                                                                                                                                                                       ● Increase in financing cost
                                                                                                                                                                                              -79 million yen
                                                                                                                                                                                               -79 million yen
                                                                                                                                                                           Average interest rate during the fiscal periods
                                                                                                                                                                           Average interest rate during the fiscal periods
                                                                                                                                                                           4th fiscal period: 0.83% → 5th fiscal period: 1.49%
                                                                                                                                                                           4th fiscal period: 0.83% → 5th fiscal period: 1.49%
    Distribution per unit                                                       17,341 yen                           18,632 yen                -1,291 yen
    Number of investment                                                                                                                                              ● Public offering in September 2006
                                                                                                                                                                      ● Public offering in September 2006
    units (as of end of period)                                                      107,050                               92,050                  15,000               (Number of investment units increased by 16%)
                                                                                                                                                                         (Number of investment units increased by 16%)




    Length                                                                           181 days                           184 days
                                                                                                                                                                      Achieved increases in
    Properties (period end)                                                   11 properties                         8 properties                                    revenues and profits for
    (note)
                                                                                                                                                                 third consecutive fiscal period
    Tenants (period end)                                                       314 tenants                          250 tenants
                                                                                                                                                                         Distribution per unit
    Leaseable floor space                                                304,024.87m2                            277,580.44 m2
    (period end)                                                                                                                                  ●Actual (surpassing forecast)                             SunLiveCity
                                                                                                                                                                 17,341 yen                                 Kokura and Park
                                                                                                                                                                                                            Place Oita
    Occupancy (average)                                                                 99.2 %                            99.3 %                  ●Forecast at period start (April 20, 2006)                surpassed
                                                                                                                                                                 17,000 yen                                 budget NOIs
    Occupancy (period end)                                                              99.4 %                            99.4 %

 (Note) Properties planned for acquisition and the silent partnership interest have been excluded.




                                                                                                                                                                                                                                 5
Presentation of Accounts for Fifth Fiscal Period   Portfolio           Acquisition Strategy         Management                  Finance               Compliance         Environmental Analysis and Management Policy         Appendix




Profit and Loss Statement for the 5th Fiscal Period
                                                                                                                                                  (unit: thousand yen)

                                                    5th Fiscal Period                         4th Fiscal Period
                                                   September 1, 2006 – February 28,                                                         Variation                        Primary Factors for Period-on-Period Variation
                                                                                              March 1, 2006 – August 31, 2006
                                                                2007

                                                                       Percentage                               Percentage                           Percentage
                    Category                        Value                 (%)
                                                                                               Value               (%)
                                                                                                                                     Value              (%)                 Increase in property NOI             +315 million yen
                                                                                                                                                                            Increase in property NOI             +315 million yen
   I. Operating revenues                            4,870,051                 100.0       4,496,048                    100.0        374,003                     8.3
                                                                                                                                                                          ●Contribution of newly acquired properties
        Real estate leasing revenues                4,544,795                             4,231,464                                 313,331                                                               +266 million yen
        Other revenues from real estate leasing       189,256                                  128,583                                60,672                                       - Amex Akasakamon Tower
                                                                                                                                                                                          66 million yen
        Silent partnership distribution               136,000                                  136,000                                       −                                     - Square Mall Kagoshima Usuki
   II. Operating expenses                           2,659,590                  54.6       2,512,620                      55.9       146,969                     5.8                       163 million yen
        Real estate leasing expenses                2,251,250                             2,123,240                                 128,010                                        - Kumamoto Intercommunity SC
                                                                                                                                                                                          37 million yen
        Asset management fees                         297,694                                  273,293                                24,401
        Asset custodian fee                              9,041                                    8,344                                    696                            ●Contribution of Taihaku Dori Business Center
                                                                                                                                                                           full operation +18 million yen
        General administration fees                     30,431                                   32,192                              (1,761)
        Director compensation                            9,600                                    9,600                                      −                            ●Canal City Business Center Building
                                                                                                                                                                           Contribution of rise in occupancy
        Other operating expenses                        61,572                                   65,948                              (4,375)
                                                                                                                                                                                          +13 million yen
   Operating income                                 2,210,461                  45.4       1,983,427                      44.1       227,033                    11.4          (period average: fourth period 95.2%→fifth period 99.4%)
   III. Non-operating revenues                          12,247                   0.2                368                   0.0         11,879                      −
        Interest received                                3,728                                      368                                   3,359                             Impact of 3 new acquisitions in 5th fiscal period
                                                                                                                                                                            Impact of 3 new acquisitions in 5th fiscal period
        Other non-operating revenues                     8,519                                         −                                  8,519                             Increase in depreciation +69 million yen
                                                                                                                                                                            Increase in depreciation +69 million yen
                                                                                                                                                                            Increase in general administration costs
                                                                                                                                                                            Increase in general administration costs
   IV. Non-operating expenses                         356,613                    7.3           267,693                    6.0         88,919                   33.2                             +19 million yen
                                                                                                                                                                                                 +19 million yen
        Interest paid                                 295,397                                  171,148                              124,249
        Amortization of establishment cost               5,595                                    5,595                                      0
                                                                                                                                                                            Increase in financing costs
                                                                                                                                                                            Increase in financing costs        +79 million yen
                                                                                                                                                                                                               +79 million yen
        Investment unit issuance fee write off           8,412                                         −                                  8,412
                                                                                                                                                                            • Conversion into long-term debt between August and
                                                                                                                                                                            • Conversion into long-term debt between August and
        Expenses related to financing                   44,225                                   89,099                             (44,874)                                  September 2006
                                                                                                                                                                              September 2006
        Other non-operating expenses                     2,982                                    1,850                                   1,132                             • Average interest rate during the periods
                                                                                                                                                                            • Average interest rate during the periods
                                                                                                                                                                              4th fiscal period 0.83% → 5th fiscal period 1.49%
                                                                                                                                                                              4th fiscal period 0.83% → 5th fiscal period 1.49%
   Ordinary profit                                  1,866,095                  38.3       1,716,102                      38.1       149,993                     8.7
   Net profit before tax                            1,866,095                  38.3       1,716,102                      38.1       149,993                     8.7
   Corporation, inhabitant and
                                                         9,654                   0.2              1,048                   0.0             8,606                   −
   business tax
   Adjustment to corporation tax                               19                0.0                 (0)                  0.0               19                    −
   Net profit                                       1,856,421                  38.1       1,715,054                      38.1       141,367                     8.2
   Profit carried forward                                      16                                     37                                   (20)
   Unappropriated profit                            1,856,438                             1,715,092                                 141,346

                                                                                                                                                                                                                                         6
  Presentation of Accounts for Fifth Fiscal Period            Portfolio           Acquisition Strategy        Management               Finance                  Compliance       Environmental Analysis and Management Policy             Appendix




  Balance Sheet for the 5th Fiscal Period                                                                   (unit: thousand yen)                                                                                                           (unit: thousand yen)

                                                5th Fiscal                   4th Fiscal                                                                                             5th Fiscal                 4th Fiscal
                                                 Period                       Period                       Variation                                                                 Period                     Period                    Variation
                                            (as of February 28, 2007)     (as of August 31, 2006)                                                                               (as of February 28, 2007)   (as of August 31, 2006)

                                                                                                                      Percen                                                                                                                         Percen
                                                              Share                        Share                                                                                                  Share                      Share
               Category                        Value           (%)
                                                                            Value           (%)
                                                                                                         Value         -tage                       Category                        Value           (%)
                                                                                                                                                                                                              Value           (%)
                                                                                                                                                                                                                                        Value         -tage
                                                                                                                        (%)                                                                                                                            (%)
Assets                                                                                                                             Liabilities
I. Current assets                                                                                                                  I. Current liabilities
Cash and cash equivalents                      6,561,682                    2,935,049                   3,626,632                    Accrued business fees                           284,348                   232,183                   52,164
  Cash and deposits in trust                   3,493,655                    3,430,267                      63,387                    Short-term debt                              8,500,000                   8,100,000                 400,000
  Operating receivables                          248,290                      333,808                    (85,518)
                                                                                                                                     Accounts payable                                 55,340                     46,319                    9,021
  Deferred tax assets                                     −                         19                       (19)
                                                                                                                                     Expenses payable                                285,860                   250,629                   35,230
  Consumption tax receivables                        99,443                    89,196                      10,246
                                                                                                                                     Income taxes payable                              1,210                        975                     235
  Other current assets                           229,751                      252,634                    (22,882)
Total current assets                         10,632,823          9.1        7,040,976         6.8       3,591,846        51.0        Rent received in advance                        589,863                   535,254                   54,609

II. Fixed assets                                                                                                                     Deposits held                                   500,819                   736,848                 (236,028)
1. Tangible fixed assets                                                                                                           Total current liabilities                     10,217,442          8.7      9,902,209         9.5     315,232          3.2
  Buildings                                      136,683                      140,384                     (3,701)                  II. Fixed liabilities
  Structures                                           805                         843                       (38)                     Long-term debt                             35,600,000                  34,600,000                1,000,000
  Land                                           641,782                      641,782                            −
                                                                                                                                      Deposits and guarantees on deposit              98,595                   103,128                   (4,533)
  Buildings in trust                         41,797,815                    37,987,229                   3,810,585
                                                                                                                                      Deposits and guarantees in trust            9,222,293                   8,694,810                 527,483
  Structures in trust                            397,201                      209,848                     187,353
                                                                                                                                      Derivative liabilities                          97,946                   128,594                  (30,647)
  Machinery and equipment in trust               295,701                      244,503                      51,197
  Tools and fixtures in trust                    291,519                      214,652                      76,866                  Total fixed liabilities                       45,018,836         38.4     43,526,532        41.8    1,492,303         3.4

  Land in trust                              59,463,999                    54,117,497                   5,346,502                  Total liabilities                             55,236,278         47.1     53,428,742        51.3    1,807,536         3.4
  Temporary account of construction                                                                                                Net Assets
                                                     25,397                    24,457                         939
  in trust
                                                                                                                                   I. Unitholders’ capital
Total tangible assets in trust              103,050,906         87.9       93,581,200        89.8       9,469,705        10.1
                                                                                                                                    1. Total capital                             60,264,380         51.4     49,167,800        47.2   11,096,580        22.6
2. Investment and other assets
                                                                                                                                    2. Reserves
   Investment securities                      3,421,633                     3,421,633                          −
   Guarantees and deposits                       10,000                        10,000                          −                     Unappropriated profit                        1,856,438                   1,715,092                 141,346
  Long term pre-paid expenses                        79,342                   101,252                    (21,909)                   Total reserves                                1,856,438          1.6      1,715,092         1.6     141,346          8.2
Total investment and other assets             3,510,975          3.0        3,532,885         3.4        (21,909)        (0.6)     Total unitholders’ capital                    62,120,818         53.0     50,882,892        48.8   11,237,926        22.1
Total fixed assets                          106,561,881         90.9       97,114,086        93.2       9,447,795          9.7     II. Difference of valuation and conversion
III. Deferred assets                                                                                                               1. Deferred hedge profit/loss                    (97,946)                  (128,594)                  30,647
  Founding fees                                      22,381                    27,977                     (5,595)                     Total difference of valuation
                                                                                                                                                                                    (97,946)       (0.1)      (128,594)       (0.1)      30,647           -
  Investment unit issurance fees                     42,062                          −                     42,062                     and conversion
                                                                                                                                   Net assets                                    62,022,871         52.9     50,754,298        48.7   11,268,573        22.2
Total deferred assets                                64,444      0.0           27,977         0.0          36,467       130.3
Total assets                                117,259,149       100.0       104,183,040      100.0       13,076,109        12.6      Total liabilities and net assets             117,259,149       100.0     104,183,040      100.0    13,076,109        12.6



                                                                                                                                                                                 ●Increased capital in September 2006
                           ●Kept funds to acquire Hara SATY on hand one extra day                   ●Three properties newly acquired (Amex Akasakamon Tower,                     •Issuance of new investment units 15,000 units
                           (sixth fiscal period – March 1, 2007)                                    Square Mall Kagoshima Usuki, Kumamoto Intercommunity SC)                     •Capital raised 11,096 million yen
                                                                                                                                                                                                                                                         7
Presentation of Accounts for Fifth Fiscal Period   Portfolio      Acquisition Strategy   Management           Finance            Compliance     Environmental Analysis and Management Policy           Appendix




Cash Flow Statement for the 5th Fiscal Period                                                                                                                                                  (thousand yen)

                                                                                                      5th   period (181 days)                              4th period (184 days)
                                                                                                  September 1, 2006 – February 28, 2007                   March 1, 2006 – August 31, 2006
            Ⅰ Cash flows from operating activities
                  Income before income taxes                                                                  1,866,095                                                 1,716,102
                  Depreciation                                                                                  688,585                                                   619,112
                  Amortization of founding fees                                                                    5,595                                                     5,595
                  Investment unit issuance fee depreciation                                                        8,412                                                         −
                  Interest received                                                                              (3,728)                                                     (368)
                  Interest paid                                                                                 295,397                                                   171,148
                  Increased/decreased amount of operations receivables                                            85,518                                                (201,166)
                  Increased/decreased amount of uncollected consumption tax                                    (10,246)                                                  (89,196)
                  Increased/decreased accrued business payments                                                    9,821                                                 (86,287)
                  Increased/decreased unpaid fees                                                                  8,966                                                    25,103
                  Increased/decreased unpaid expenses                                                             13,783                                                    12,673
                  Increased/decreased advanced rents                                                              54,609                                                    54,165
                  Increased/decreased deposits held                                                           (230,248)                                                   251,306
                  Increased/decreased advance payments                                                            34,033                                                 (53,923)
                  Increased/decreased long-term advance payments                                                  21,909                                                   (7,808)
                  Other                                                                                        (21,540)                                                    (7,898)
                Subtotal                                                                                      2,826,966                                                 2,408,557
                  Interest received                                                                                3,728                                                       368
                  Interest paid                                                                               (273,950)                                                 (161,247)
                  Corporation tax payment, etc.                                                                  (9,977)                                                   (1,109)
                  Net cash provided by operating activities                                                   2,546,767                                                 2,246,568
            Ⅱ Cash flow from investment activities                                                                                Acquisition of 3 new
                                                                                                                                  properties (Amex Akasakamon
                  Expenses for acquiring tangible fixed assets placed in trust                              (10,105,000)                                               (7,380,419)
                                                                                                                                  Tower, Square Mall Kagoshima
                  Expenses for paying deposits                                                                         −          Usuki and Kumamoto                     (114,960)
                  Expenses from security deposits and guarantees                                                  (4,533)         Intercommunity SC)                        (4,533)
                  Income from security deposits and guarantees in trust                                          632,917                                                   399,921
                  Expenses from security deposits and guarantees in trust                                      (111,214)                                                  (75,223)
                  Expenses from acquiring investment securities                                                        −                                                  (20,212)
                  Expenses for investment unit issuance fees                                                    (50,475)                                                         −
                  Expenses for depositing entrusted deposits                                                   (488,662)                                                         −
                  Net cash provided by investment activities                                                (10,126,968)                                               (7,195,428)
            Ⅲ Cash flow from financing activities
                  Proceeds from short-term debt                                                                8,500,000                                               20,700,000
                  Repayment of short-term debt                                                               (8,100,000)                                             (27,700,000)
                  Proceeds from borrowing long-term loans                                                      1,000,000                                               16,000,000
                  Income from issuance of investment units                                                    11,096,580          Increased capital in                          −
                  Distribution payment                                                                       (1,715,020)          September 2006
                                                                                                                                                                      (1,696,208)
            Net cash provided by financing activities                                                         10,781,559                                                7,303,791
            Ⅳ Increased/decreased cash and cash equivalents                                                    3,201,358                                                2,354,931
            Ⅴ Cash and cash equivalents at start of period
            Ⅵ Cash and cash equivalents at end of period
                                                                                                               6,365,317
                                                                                                               9,566,675
                                                                                                                                                                        4,010,386
                                                                                                                                                                        6,365,317
                                                                                                                                                                                                                  8
Presentation of Accounts for Fifth Fiscal Period              Portfolio              Acquisition Strategy         Management                Finance               Compliance           Environmental Analysis and Management Policy                    Appendix




Leasing Business Income and Expenditure                                                                                                                                                                                                                  (million yen)

                                                                                                                            Kumamoto       Canal City     Gofukumachi                      Taihaku
                                                                                          Kominedai         Square Mall                                                      Sanix                           Amex
                                         Canal City    Park Place      SunLiveCity                                            Inter-        Business        Business                        Street
              Category                    Hakata          Oita           Kokura
                                                                                          Community          Kagohima
                                                                                                                            community        Center          Center
                                                                                                                                                                            Hakata
                                                                                                                                                                                           Business
                                                                                                                                                                                                          Akasakamon                      Total
                                                                                             Mall              Usuki                                                        Building                         Tower
                                                                                                                                SC          Building        Building                        Center


      (Fiscal period)                                                            5th Fiscal Period (September 1, 2006~February 28, 2007)                                                                                     5th             4th
                                                                                                                                                                                                                                                          Varia-
                                                                                                                                                                                                                                                           tion
      (Length)                          181 days      181 days        181 days           181 days           154 days        91 days        181 days       181 days        181 days        181 days        181 days        181 days        184 days

    Total leasing business
                                           1,390           903               285                 33               226             38            699              554           203              318               80         4,734           4,360          374
    income ①

      Rent                                 1,366           884               285                 33               189             38            696              494           189              317               47         4,544           4,231          313

      Other Income                             24            19                  0                0                36               0               2              60            13                0              32            189            128              60
    Total leasing business
    expenses ②
                                              659          523                 66                 8               109             14            340              270             89             132               35         2,251           2,123          128

      Outsourcing fees                        323          257                   8                1                34               1           189                73            19              61                 5           975            920              55

      Maintenance expenses                       6           23                  0                0                  0              0               3                4             0               1                0             40             39               1
      Expenses for restoration
      to former state                            0             0                 0                0                  0              0               0                0             0               0                0              0               2         (1)

      Tax and public charges                   70            74                26                 3                  0              0             46               38            15                0                0           275            300         (25)
                                                                                                                 (Note 1)       (Note 1)                                                       (Note 1)        (Note 1)

      Insurance permiums and
      trust compensation                         7             5                 2                0                  2              0               4                3             1               1                0             30             29               0

      Depreciation                            176          122                 27                 3                46             12              83               94            35              64               21            688            619              69

      Other expenses                           74            39                  0                0                26               0             12               56            17                2                7           239            211              28
    Real estate rental
    business profit (loss) ③                  730          380               218                 24               116             24            359              284           113              185               44         2,482           2,236          245
    (=①-②)
    NOI④
                                              906          503               246                 28               162             36            442              378           149              250               66         3,171           2,855          315
    (=③+depreciation)
    NOI yield (Note 2)
    (Annual conversion of ④                5.7%          6.5%              7.5%              7.8%              7.3%           6.2%            6.1%             6.8%          6.8%            7.2%             6.5%            6.3%           6.2%         0.1%
    /Acquisition price)
  (Note 1) Property taxes and city planning taxes are planned to be entered as expenses (60 million yen) for the 6th fiscal period, although they are appropriated as assets when properties are newly acquired.
  (Note 2) NOI yields by property have been calculated by annualizing NOIs of individual properties based on the length of their management. The NOI yields in the “Total” column have been obtained by annualizing the NOI of the 4th and 5th fiscal periods
  using the length of each period.

                                                                                                                                                                                                                                                                      9
Presentation of Accounts for Fifth Fiscal Period                   Portfolio             Acquisition Strategy            Management                    Finance                  Compliance           Environmental Analysis and Management Policy    Appendix




Forecasts for 6th and 7th Fiscal Periods
                                                                  7th Fiscal Period                         6th Fiscal Period                       5th Fiscal Period                         4th Fiscal Period            3rd Fiscal Period
                                                                      (forecast)                                (forecast)                               (results)                                 (results)                    (results)
                             Category
                                                                    September 1, 2007 –                         March 1, 2007 –                       September 1, 2006 –                       March 1, 2006 –             September 1, 2005 -
                                                                     February 28, 2008                          August 31, 2007                        February 28, 2007                        August 31, 2006              February 28, 2006
                                                                         (181 days)                               (184 days)                               (181 days)                             (184 days)                    (181 days)



              Operating revenue                                         5,124        mm yen                       5,188        mm yen                     4,870        mm yen                    4,496     mm yen              4,050     mm yen

              Operating profit                                                               -                                         -                  2,210        mm yen                    1,983     mm yen              1,751     mm yen

              Ordinary profit                                           1,822        mm yen                       1,886        mm yen                     1,866        mm yen                    1,716     mm yen              1,698     mm yen

              Net profit                                                1,820        mm yen                       1,884        mm yen                     1,856        mm yen                    1,715     mm yen              1,697     mm yen

              Distribution per unit                                          17,000         yen                        17,600         yen                      17,341         yen                   18,632        yen              18,438      yen




              The risk of interest rates
              The risk of interest rates                                             The incorporation of Hara SATY into the
                                                                                     The incorporation of Hara SATY into the                                                       ● Capital raised in September 2006
                                                                                                                                                                                   ● Capital raised in September 2006
              rising and the risk of NOI
              rising and the risk of NOI                                             portfolio at the beginning of the fiscal                                                        (16% increase in investment units)
                                                                                                                                                                                      (16% increase in investment units)
                                                                                     portfolio at the beginning of the fiscal
              decreasing due to vacancy                                              period contributes to raising the property                                                    ● Conversion of debt into long-term debt during August
                                                                                                                                                                                   ● Conversion of debt into long-term debt during August
              decreasing due to vacancy                                              period contributes to raising the property
              rooms were considered                                                                                                                                                  – September 2006
                                                                                                                                                                                      – September 2006
              rooms were considered                                                  NOI
                                                                                     NOI                                                                                             (average fiscal period interest rose from 0.83% in 4th
                                                                                                                                                                                      (average fiscal period interest rose from 0.83% in 4th
              【Reference】                                                            【Reference】                                                                                     fiscal period to 1.49% in 5th fiscal period
                                                                                                                                                                                      fiscal period to 1.49% in 5th fiscal period
               【Reference】                                                            【Reference】
              •Depreciation 766 mm yen
               •Depreciation 766 mm yen                                              •Depreciation 753 mm yen
                                                                                      •Depreciation 753 mm yen
              •Plan to incorporate City House Tenjin
               •Plan to incorporate City House Tenjin                                •Recording of 60 mm yen in property and city planning
                                                                                      •Recording of 60 mm yen in property and city planning
               Keyakidori into portfolio during the fiscal
                Keyakidori into portfolio during the fiscal                           taxes for Taihaku Street Business Center,
                                                                                       taxes for Taihaku Street Business Center,
               period
                period                                                                           Amex Akasakamon Tower,
                                                                                                 Amex Akasakamon Tower,
                                                                                                 Square Mall Kagoshima Usuki and
                                                                                                 Square Mall Kagoshima Usuki and
                                                                                                 Kagoshima Intercommunity SC
                                                                                                 Kagoshima Intercommunity SC

                                                                                      *Property and city planning taxes for Hara SATY to be
                                                                                      recorded from 8th fiscal period


  (Note) The above forecast values were calculated based on set premises.
  There is the possibility that the actual operating revenues, ordinary profit, net profit and distribution per unit will change and these values are not guaranteed by being entered here.




                                                                               Maintain and Continue High Level of Dividends                                                                                                                                    10
Presentation of Accounts for Fifth Fiscal Period                Portfolio            Acquisition Strategy           Management                    Finance                 Compliance            Environmental Analysis and Management Policy                     Appendix




Financial Indicators + Top 10 REIT Comparisons
                                                                              Fifth Period                  Weighted                    Weighted
                               Category                                                                    Average for                 Average for                                         Remarks (Definitions of Indices, etc.)
                                                                                Results                   Top 10 REITs                  All REITs
                                                                                            (note 1)                   (note 2)                    (note 3)
    Return on Assets (ROA)
                                                                                          3.4%                       3.1%                       3.1%            Ordinary profit/(total assets at start of period + total assets at end of period)/2
    *Annualized
    Return on Earnings (ROE)
                                                                                          6.9%                       6.0%                       6.0%            Net profit/(net assets at start of period + net assets at end of period)/2
    *Annualized
                                                                                                                                                                End of period interest-bearing debt/                         ※Long-term loans and investment corporation
    Ratio of interest-bearing to total assets                                           37.6%                      37.8%                      39.8%             end of period total assets
                                                                                                                                                                                                                             bonds are not included in the long-term
                                                                                                                                                                                                                             interest-bearing debt


    Ratio of long-term interest-bearing debt                                            80.7%                      67.1%                      68.2%             Long-term interest-bearing debt /total debt at end of period


    DSCR                                                                                      9.6                      11.4                       10.3          (Net profit + paid interest + depreciation - capital gains from sale of real estate)/interest paid


    Net assets per unit                                                        579,382 yen                611,832 yen                582,619 yen

                                                                                                                                                                (Net profit + depreciation - capital gains from sale of real estate )/
    FFO per unit                                                                 23,744 yen                 24,666 yen                 22,287 yen               outstanding units at end of period


    Distribution per unit                                                        17,341 yen                 17,655 yen                 16,448 yen

    Forecast dividend                                                            17,600 yen                 16,486 yen                 15,412 yen

    Forecast dividend yield                                                               2.9%                       2.9%                       3.3%            (Forecast dividend/managed days x 365)/end-of-term price of investment units


    Spread vs. JGB                                                                        1.2%                       1.2%                       1.6%            Forecast dividend yield – 10-year JGB yield

                                                                                                                                                                End-of-term investment unit price/
    Revised PBR                                                                            2.1 X                           -                          -         {net assets per unit + (end-of-term appraised value – end-of-term book value)/
                                                                                                                                                                outstanding investment units}

    FFO multiple                                                                         25.9 X                     23.1 X                     21.0 X           End-of-term investment unit price/FFO per unit


 Note 1) Figures for Fukuoka REIT are calculated based on the fifth fiscal period settlement and the investment unit price at the end of the fifth fiscal period (1,240,000 yen as of the end of February 2007). The forecast dividend and forecast dividend
 yield are calculated based on the forecast performance for the sixth fiscal period (ending in August 2007). Note 2) The top 10 REITs in the investment unit price are the top 10 REITs in the ranking by investment unit price at the end of March 2007 among 27REITs
 that are listed on the Tokyo Stock Exchange and have settlement results of more than two fiscal periods as of the end of March 2007. They are Nippon Building Fund, Japan Real Estate, Japan Retail Fund, Japan Prime Realty, Tokyu REIT, Global One
 Real Estate, Nomura Real Estate Office Fund, Mori Trust Sogo REIT, Frontier Real Estate and Hankyu REIT. The unit price of Japan Prime Realty, which has split its units, has been adjusted with the split ratio of 1:2.5. Each index has been calculated
 based on the settlements of most recent fiscal periods and the unit prices at the end of most recent fiscal periods for individual REITs.Note 3) All REITs are the 27 REITs listed on the Tokyo Stock Exchange that have settlement results of two fiscal
 periods or more as of the end of March 2007. Each index has been calculated based on the settlements of most recent fiscal periods and the units prices at the end of most recent fiscal periods for individual REITs.
 (Source) Prepared by Fukuoka Realty based on materials disclosed by individual investment corporations.                                                                                                                                                                    11
Portfolio
Presentation of Accounts for Fifth Fiscal Period   Portfolio   Acquisition Strategy   Management   Finance   Compliance   Environmental Analysis and Management Policy   Appendix




J-REIT Specialized in Fukuoka/Kyushu Area

                               Supported by Kyushu Business World
                               Supported by Kyushu Business World                                              Investment Policy
                                                                                                               Investment Policy




                                                                                                                                                                                    13
Presentation of Accounts for Fifth Fiscal Period   Portfolio   Acquisition Strategy   Management   Finance   Compliance   Environmental Analysis and Management Policy   Appendix




Portfolio Map




                                                                                                                                                                                    14
Presentation of Accounts for Fifth Fiscal Period                 Portfolio            Acquisition Strategy           Management                    Finance   Compliance   Environmental Analysis and Management Policy            Appendix




Portfolio Table




                                                                                                                                                                                                               (Note) These figures are based on
 Note    All values in the Acquisition (Planned) Price column exclude fees, public charges and expenses.
        1)
                                                                                                                                                                                                               properties owned as of April 10,
 Note    Properties acquired through arrangement by sponsors have been indicated as “sponsor.”
        2)
                                                                                                                                                                                                               2007 and those scheduled for
 Note    Figures in the Tenants, Total Leasable Area and Occupancy columns are for the above-listed properties as of February 28, 2007.
        3)
                                                                                                                                                                                                               acquisition (contract base). City
 Note    The total leasable area figure of Taihaku Street Business Center combines 11, 225.30㎡ for the office building and 3,427.38㎡ for the
        4)
                                                                                                                                                                                                               House Tenjin Keyaki Dori
         residential building.
                                                                                                                                                                                                               (tentative) is entered based on its
 Note 5) Figures in the Age column are weighted-average of building ages of above-listed properties using acquisition (planned) prices (The building
                                                                                                                                                                                                               scheduled acquisition price. The
         age of the uncompleted property has been set as 0.). Figures in the Occupancy column have been obtained by dividing the total leased
                                                                                                                                                                                                               preferred silent partnership
         areas of the above-listed properties as of February 28, 2007 by the total leasable areas.
                                                                                                                                                                                                               interest has not been included.
 Note 6) The figure in the Assumed IRR column is based on the "Survey on Investment Profitability Value of Preferred Equity" by Japan Real Estate
         Institute.
 Note 7) Figures in parentheses are not included in respective total figures.




             A Portfolio Primarily Comprised of Retail Properties and Focused on the Fukuoka Metropolitan Area                                                                                                                                  15
Presentation of Accounts for Fifth Fiscal Period                 Portfolio            Acquisition Strategy           Management   Finance   Compliance   Environmental Analysis and Management Policy   Appendix




List of Property Prices




  Note 1) All values in the Acquisition (Planned) Price columns exclude fees, public charges and expenses.
  Note 2) Figures in the Acquisition CAP column have been calculated by dividing the direct capitalization method NCFs in
          the appraisal reports (including survey reports) by the acquisition (planned) prices.
  Note 3) The Appraisal CAP figures are the cap rates under the direct capitalization method in the appraisal reports
          (including survey reports).
  Note 4) Figures in the Most Recent Capitalization Method Appraisal are evaluation values based on the direct
          capitalization method in appraisal reports as of February 28, 2007. In the case of Hara SATY and (tentative)
          City House Tenjin Keyaki Dori, they are evaluation values based on the direct capitalization method in the most
          recent appraisal reports.
  Note 5) The figures in the Most Recent DCF Appraisal are based on the DCF method in appraisal reports as of February
          28, 2007. In the case of Hara SATY and (tentative) City House Tenjin Keyaki Dori, they are figures based on
          the DCF method in the most recent appraisal reports.




                                                                                               Steady Increase in Latent Profit                                                                                    16
Acquisition Strategy
Presentation of Accounts for Fifth Fiscal Period   Portfolio   Acquisition Strategy   Management   Finance   Compliance           Environmental Analysis and Management Policy   Appendix




External Growth Roadmap




                                                                                                               (Note 1)   This is a preferred silent partnership interest in
                                                                                                                          CCH Bridge YK, the SPC that is the operator
                                                                                                                          that manages the portion owned by Canal City
                                                                                                                          Hakata SPC.
                                                                                                               (Note 2)   This is calculated based on the acquisition
                                                                                                                          prices of owned properties and planned
                                                                                                                          acquisitions (contract based price) as of the end
                                                                                                                          of March 2007.




                          Fukuoka REIT is Creating the Optimal Portfolio as a Dedicated Fukuoka/Kyushu REIT                                                                                 18
Presentation of Accounts for Fifth Fiscal Period          Portfolio    Acquisition Strategy   Management         Finance                 Compliance            Environmental Analysis and Management Policy                     Appendix




Map of Sponsor Development Trends                                                                              (Properties are not owned by Fukuoka REIT)




                                                                          Hakata Riverain
                                                                             Eastside




                                                                      West Japan
                                                                       Building


                                       New Japan Building



                                                                                                                                                                                                                                Higashihie
                                                                                                                                                                                                                              Business Center
                                                                                                                                                                                                                                (tentative)




                                                                                                      Canal City Ⅱ

   Plan for new
   housing project
   at Akasaka
   2-chome

                                                    Tenjin Kirameki   天神きらめき
                                                     Dori Building    通りビル
                                                   (Iwataya Annex)
                                                                                                                                                                                                                Hyatt Regency
                                                                                                                                    Hakata Ekimae                                                                 Fukuoka
                                                                                                                                    Business Center
                Property developed by sponsor

                Property sponsor is planning or
                developing

                Property owned by affiliate real
                estate firm of sponsor
                                                                                                                     (Note) This map is as of April 10, 2007 and there are no plans for Fukuoka REIT to acquire any of these properties.   19
Presentation of Accounts for Fifth Fiscal Period                    Portfolio             Acquisition Strategy      Management                    Finance                 Compliance            Environmental Analysis and Management Policy                    Appendix




History of Acquisition Cap Rates and Implied Cap Rates
                                          History of Acquisition Cap Rates
                                          History of Acquisition Cap Rates                                                                                      Comparison of Implied Cap Rates and NOI Returns
                                                                                                                                                                Comparison of Implied Cap Rates and NOI Returns
                                                              (Office Buildings)
                                                               (Office Buildings)                                                                                              for Fukuoka REIT
                                                                                                                                                                                for Fukuoka REIT




                       Source) Real Estate Investor Survey by Japan Real Estate Institute
                       Note) This indicates the history of transaction returns for office buildings




  Note 1) Implied cap rates and NOI yields of Fukuoka REIT have been calculated based on the fifth fiscal period settlement and the investment unit price at the end of the fifth fiscal period.
  Note 2) The top 10 REITs in the investment unit price are the top 10 REITs in the ranking by investment unit price at the end of March 2007 among 27 REITs that are listed on the Tokyo Stock Exchange and have settlement results of more than two fiscal
          periods as of the end of March 2007. They are Nippon Building Fund, Japan Real Estate, Japan Retail Fund, Japan Prime Realty, Tokyu REIT, Global One Real Estate, Nomura Real Estate Office Fund, Mori Trust Sogo REIT, Frontier Real Estate and Hankyu
          REIT. The unit price of Japan Prime Realty, which has split its units, has been adjusted with the split ratio of 1:2.5. Each index has been calculated based on the settlements of most recent fiscal periods and the unit prices at the end of most recent
          fiscal periods for individual REITs.
  Note 3) All REITs are the 27 REITs listed on the Tokyo Stock Exchange that have settlement results of two fiscal periods or more as of the end of March 2007. Each index has been calculated based on the settlements of most recent fiscal periods and the
          unit prices at the end of most recent fiscal periods for individual REITs.
  (Source) Prepared by Fukuoka Realty based on materials disclosed by individual investment corporations.



                                                   Fukuoka REIT is Aiming to Raise Dividends through External Growth                                                                                                                                                       20
Management
Presentation of Accounts for Fifth Fiscal Period   Portfolio   Acquisition Strategy   Management   Finance   Compliance   Environmental Analysis and Management Policy   Appendix




History of Occupancy Rate by Property




                                              Occupancy of Overall Portfolio at End of Fifth Fiscal Period: 99.4%                                                                   22
Presentation of Accounts for Fifth Fiscal Period    Portfolio   Acquisition Strategy   Management   Finance   Compliance   Environmental Analysis and Management Policy   Appendix




History of Retail Property Sales




           One of the 10th                                                       Merry Pumpkin
                                                                                 (84 tsubos), a                                 Established as
            anniversary
                                                                                new family buffet                              community’s top
              events
                                                                                   restaurant                                       store




                                                   Sales at All Three Retail Properties are Performing Strongly                                                                      23
Presentation of Accounts for Fifth Fiscal Period    Portfolio   Acquisition Strategy   Management   Finance   Compliance         Environmental Analysis and Management Policy                     Appendix




Rental Portfolio                                   (including common expenses)




                                                                                                                           Note 1) Figures in the circle graphs do not include the rents (including
                                                                                                                                   common expenses) of Kominedai Community Mall, which was sold on
                                                                                                                                   March 9, 2007.
                                                                                                                           Note 2) Ratios indicated in the circle graphs are figures obtained by dividing
                                                                                                                                   the actual rents (including common expenses) for the 5th fiscal period,
                                                                                                                                   as totaled for each remaining contract period of residents at Amex
                                                                                                                                   Akasakamon Tower, by actual rents (including common expenses) for
                                                                                                                                   the 5th fiscal period from the property.
                                                                                                                           Note 3) Ratios indicated in the circle graphs are figures obtained by dividing
                                                                                                                                   the actual rents (including common expenses) for the 5th fiscal period,
                                                                                                                                   as totaled for each remaining contract period of tenants at Canal City
                                                                                                                                   Business Center Building, Gofukumachi Business Center, Taihaku
                                                                                                                                   Street Business Center and Sanix Hakata Building, by actual rents
                                                                                                                                   (including common expenses) for the 5th fiscal period from those
                                                                                                                                   properties.
                                                                                                                           Note 4) Ratios indicated in the circle graphs are figures obtained by dividing
                                                                                                                                   the actual rents (including common expenses) for the 5th fiscal period,
                                                                                                                                   as totaled for each remaining contract period of tenants at Canal City
                                                                                                                                   Hakata, Park Place Oita, SunLiveCity Kokura, Square Mall Kagohima
                                                                                                                                   Usuki and Kumamoto Intercommunity SC, by actual rents (including
                                                                                                                                   common expenses) for the 5th fiscal period from those properties.




                                   Some Retail Leases are Long-term but Other Leases are Primarily Short-term                                                                                                24
Presentation of Accounts for Fifth Fiscal Period                 Portfolio            Acquisition Strategy          Management                    Finance                 Compliance            Environmental Analysis and Management Policy                     Appendix




Breakdown of Tenant Rent Types                                                                                                  (including common expenses)                                   for Retail Properties




  Note 1) Figures in the circle graphs do not include the rents (including common expenses) of Kominedai Community Mall, which was sold on March 9, 2007.
  Note 2) "Fixed rent tenants" are tenants whose monthly rent (including common expenses) are fixed. Moreover, the indicated ratios are figures obtained by dividing the actual rent (including common expenses) for the 5th fiscal period from the tenants
          with fixed rent housed in Canal City Hakata, Park Place Oita, SunLiveCity Kokura, Square Mall Kagoshima Usuki and Kumamoto Intercommunity SC, by actual rents (including common expenses) for the 5th fiscal period from those properties.
  Note 3) Entirely percentage of sales tenants are tenants whose monthly rents (including common expenses) shall be calculated by multiplying their monthly sales amount by a certain percentage. The indicated ratios are figures obtained by dividing the
          actual rent (including common expenses) from the tenants with rent entirely linked to sales housed in Canal City Hakata, Park Place Oita, SunLiveCity Kokura, Square Mall Kagoshima Usuki and Kumamoto Intercommunity SC by the amount of actual rent
          (including common expenses) for the fifth fiscal period from those properties.
  Note 4) Percentage of sales with minimum guarantee tenants aretenants whose monthly rents (including common expenses) are fixed and who are required by contract to pay extra rents that are calculated by multiplying the excess sales amounts, when their
          sales exceed certain amounts, by percentage. The indicated ratios are figures obtained by dividing the actual rent (including common expenses) from the tenants with percentage of sales and minimum guarantee housed in Canal City Hakata, Park Place
          Oita, SunLiveCity Kokura, Square Mall Kagoshima Usuki and Kumamoto Intercommunity SC by the amount of actual rent (including common expenses) for the fifth fiscal period from those properties.
  Note 5) Fixed rent + percentage of sales tenants are tenants whose monthly rents (including common expenses) are fixed and who are (except for certain tenants) required by contract to pay extra rents that are calculated by multiplying their sales amounts
          by the percentage of sales. The indicated ratios are figures obtained by dividing the actual rent (including common expenses) from the tenants with fixed and percentage of sales housed in Canal City Hakata, Park Place Oita, SunLiveCity Kokura, Square
          Mall Kagoshima Usuki and Kumamoto Intercommunity SC by the amount of actual rent (including common expenses) for the fifth fiscal period from those properties.




                                     Supplementing with Percentage of Sales while Suppressing the Downside Risk                                                                                                                                                             25
Finance
Presentation of Accounts for Fifth Fiscal Period       Portfolio   Acquisition Strategy   Management        Finance        Compliance   Environmental Analysis and Management Policy   Appendix




Status of Interest-bearing Debt                                                                   Total interest-bearing debt as of the end of the 5th fiscal period 44.1 billion yen
                                                                                                  Total interest-bearing debt as of the end of the 5th fiscal period 44.1 billion yen




                                                   Fukuoka REIT Successfully Fixed Interest Rates in the 4th Period                                                                               27
Presentation of Accounts for Fifth Fiscal Period               Portfolio           Acquisition Strategy          Management                   Finance                Compliance            Environmental Analysis and Management Policy                   Appendix




Itemization of Borrowings                                                                                                                                                                                                           (as of February 28, 2007)
                                                                                                                             Borrowing            Repayment                Payment
      Type                                          Lender                                        Amount (JPY)                                                                                  Annual Interest                  Interest             Description
                                                                                                                               Date                Maturity                 Method
                     Nishi-Nippon City Bank                                                           2,000,000,000           2007.2.27            2008.2.27                                     0.98818% (*1)
                                                                                                                                                                         Lump sum
                     Sumitomo Trust and Banking                                                       1,500,000,000           2007.2.27            2008.2.27                                     0.98818% (*1)                   Floating            No collateral
                                                                                                                                                                        upon maturity
     Short-          Mizuho Corporate Bank                                                            1,500,000,000           2007.2.28            2008.2.29                                     0.95636% (*2)                                       No guarantee
   term debt
                     Mitsubishi UFJ Trust and Banking                                                 1,500,000,000           2007.2.28            2008.2.29
                                                                                                                                                                         Lump sum
                                                                                                                                                                                                 0.93636% (*2)                   Floating
                     (new transaction in 5th period)                                                                                                                    upon maturity
                                                                                  Subtotal            6,500,000,000
                     Development Bank of Japan                                                      12,000,000,000            2004.11.9            2009.8.31                                         1.39000%                      Fixed
                     Aozora Bank, Fukuoka Bank, Nishi-Nippon City Bank,
                     Oita Bank, Iyo Bank, The Bank of Saga, Eighteenth
                                                                                                      6,600,000,000           2005.6.29            2008.6.23                                     1.03636% (*3)                   Floating
                     Bank, Miyazaki Bank, Yamaguchi Bank, Shinwa Bank,
                     Chikuho Bank
                     Mizuho Corporate Bank, Norinchukin Bank, Shinkin                                                                                                                                                          Made fixed
                     Central Bank, Hiroshima Bank, Iyo Bank, The Bank of                            10,000,000,000            2006.8.25            2010.7.30                                     1.92250% (*4)
   Long-term         Saga, Yamaguchi Bank, Higo Bank, Shinwa Bank                                                                                                        Lump sum                                                (*4)                No collateral
     debt                                                                                                                                                               upon maturity                                                                No guarantee
                     Fukuoka Bank                                                                     2,000,000,000           2006.8.25            2011.7.29                                         2.05174%
                     Nishi-Nippon City Bank                                                           2,000,000,000           2006.8.25            2011.7.29                                         2.05174%
                     The Dai-ichi Mutual Life Insurance                                               1,000,000,000           2006.8.25            2011.7.29                                         2.05174%                      Fixed
                     Shinsei Bank                                                                     1,000,000,000           2006.8.25            2011.7.29                                         2.00174%
                     Sumitomo Trust and Banking                                                       1,000,000,000           2006.9.29            2011.7.29                                         1.80296%
                                          Subtotal                                                  35,600,000,000
   Commit-           Fukuoka Bank, Resona Bank, Kumamoto Family                                                                                                          Lump sum                                                                    No collateral
                                                                                                      2,000,000,000           2007.2.28            2007.3.30                                     0.95636% (*2)
   ment line         Bank, Saikyo Bank and Shinwa Bank (*5)                                                                                                             upon maturity                                                                No guarantee
                                          Subtotal                                                    2,000,000,000
                                            Total                                                44,100,000,000

                                                                                                                                        Commitment Period
              Type                                          Lender                                Credit Limit (JPY)                                                              Description
                                                                                                                                       Start          End
       Commitment line
                                      Fukuoka Bank                                                        3,000,000,000             2006.6.29               2007.6.29
        agreement (1)                                                                                                                                                            No collateral
                                      Fukuoka Bank, Resona Bank, Kumamoto
       Commitment line                                                                                                                                                           No guarantee
                                      Family Bank, Saikyo Bank and Shinwa                                 5,000,000,000             2006.8.25               2007.8.23
        agreement (2)
                                      Bank
                                                                                     Total             8,000,000,000


 (*1) From February 27, 2007 to March 30, 2007 (not inclusive of that day)(*2) From February 28, 2007 to March 30, 2007 (not inclusive of that day)(*3) From December 26, 2006 to March 23, 2007 (*4) Fukuoka REIT has concluded a swap agreement to fix interest
 rates on borrowings with floating interest and the interest rate at which the swap agreement was concluded is entered. (*5) These are the borrowings for Commitment Line 2.



                                                                   All Borrowings of Fukuoka REIT are Now Unsecured                                                                                                                                                  28
Presentation of Accounts for Fifth Fiscal Period   Portfolio   Acquisition Strategy   Management   Finance   Compliance   Environmental Analysis and Management Policy   Appendix




LTV Control




                                        Fukuoka REIT has Capacity to Borrow an Additional 15 to 20 Billion Yen                                                                      29
Compliance
Presentation of Accounts for Fifth Fiscal Period              Portfolio        Acquisition Strategy      Management         Finance           Compliance   Environmental Analysis and Management Policy   Appendix




Organizational Structure of Asset Manager
      Organizational Chart of
      Fukuoka Realty
      Full-time directors and employees: 39
      (as of April 10, 2007)




                 ■Investment Management Committee (8)
                     President (1), Investment Department Managers (4), Finance Department General Manager (1), Planning Department General Manager (1) and Compliance Officer (1)
                 ■Compliance Assessment Committee (3)
                     Compliance Department General Manager (lawyer) (1), and Outside Compliance Committee Members (lawyer and real estate appraiser) (2)

                 ◯Certifications of Full-time Staff
                     *Real estate agents (10)                              *Real estate appraisers (2)                *First class architect (1)                 *Building managers (3)
                     *Condominium manager (1)                              *Real estate consultant (1)                *Japanese securities analysts (2)         *Tax attorney (1)
                     *Lawyer (1)                                           *SME analysts (2)                           *MBA holders (5)

             Note) Figures in parentheses represent the number of people




              Group of Professionals with a Wealth of Local and Real Estate Finance Knowledge and Expertise                                                                                                          31
Presentation of Accounts for Fifth Fiscal Period   Portfolio   Acquisition Strategy   Management   Finance   Compliance   Environmental Analysis and Management Policy   Appendix




Decision-Making Process of Fukuoka REIT




           Fukuoka REIT has a Strict Compliance System that Matches the Risk Perception of Capital Markets                                                                          32
Environmental Analysis
and Management Policy
Presentation of Accounts for Fifth Fiscal Period              Portfolio           Acquisition Strategy         Management   Finance         Compliance    Environmental Analysis and Management Policy   Appendix




Office Lease Market Trends in Fukuoka


                                     Vacancy Rate of Office Buildings
                                     Vacancy Rate of Office Buildings                                                                 Average Rent of Office Buildings (excluding common expenses)
                                                                                                                                      Average Rent of Office Buildings (excluding common expenses)




   Note) Each of the above graphs was prepared by Fukuoka Realty based on data provided by Ikoma Data Service System.




                                                                                       Occupancy Rate is Steadily Rising                                                                                            34
Presentation of Accounts for Fifth Fiscal Period                 Portfolio            Acquisition Strategy            Management                    Finance            Compliance      Environmental Analysis and Management Policy           Appendix




Shift in Supply-Demand Balance                                                                                               (Comparison of Fukuoka and Tokyo)
                              Shift in Supply-Demand Balance for Fukuoka City (1993-2006)
                              Shift in Supply-Demand Balance for Fukuoka City (1993-2006)                                                                                                 Total Rental Office Area in
                                                                                                                                                                                          Total Rental Office Area in
                                                                                                                                                                                       Major Cities Nationwide (as of 2006)
                                                                                                                                                                                       Major Cities Nationwide (as of 2006)
                                                                       Major new supply triggers                     Over half of the supply is from
                                                                               demand                               non-local real estate companies




                                                                                                             New supply over the past three
                                                                                                                     years is low
                                                                                                                                                                                                                     Note) The above Total Rental
                                                                                                                                                                            77 buildings that have                        Office Area in Major Cities
                                                                                                                                                                                                                          Nationwide (as of 2006) was
                                                                                                                                                                            more than 2,000 tsubos of                     prepared by Fukuoka Realty
                                                                                                                                                                            floor space and satisfy                       based on data prepared by
                                                                                                                                                                            the new anti-seismic standards                Ikoma Data Service System.



      Note 1) This is calculated as (vacant area/total rental office area) x 100.
      Note 2) The total rental office area of each year is multiplied by the occupancy (100% - vacancy) to calculate the actual floor area used by tenants (occupied
              floor area). The new demand area for that year is arrived at by then determining the difference between the concerned year and its previous year.
      Note 3) This is the total lease area of the rental office buildings completed in each year between January and December.
      Note 4) The above graph was prepared by Fukuoka Realty based on data provided by Ikoma Data Service System.



                                          There is a Possibility that Major New Supply will Stimulate Latent Demand                                                                                                                                      35
Presentation of Accounts for Fifth Fiscal Period           Portfolio           Acquisition Strategy     Management            Finance         Compliance      Environmental Analysis and Management Policy      Appendix




Map of New Development Trends in Fukuoka Office Market
                                                                                                                                                                                           (The asterisk indicates a tentative
                                                                                                                                                                                            name and all completion dates are
                                                                                                                                                                                            scheduled dates.)

                                                                          Bu
                                                           Aqua Hakata Building                              Bu
                                                                                                      Hakata Building*                     Reisenmachi
                                                                                                                                           Reisenmachi Building*
                                                           Floor Space: 3,945 tsubos                  Floor space: 5,692 tsubos            Floor space: Unknown
                                                           Developer: Round Hill                      Developer: Fukuoka Shoji             Developer: Mitsui Fudosan
                                                           Completion: March 2008                     Completion: April 2008               Completion: Unknown




                                                                                                                                                                                      Hakata Ekimae
                                                                                                                                                                                      Building*
                          Tenjin 122 Project*                                                                                                                                         Floor space: 4,260 tsubos
                          Floor area: 3,250 tsubos                                                                                                                                    Developer: Asset Managers
                          Developer: Taisei Corporation and Sekisui House                                                                                                             Completion: June 2008
                          Completion: March 2009


                               Bu
                          Kita Building*
                          Floor space: 7,429 tsubos
                          Developer: Denki Building
                          Completion: May 2008




                 Buildings to be                                                                                                                                                 Higashihie Business Center*
                 completed in 2007                  Yakuin Project*                                                                                                              Floor space: 5,866 tsubos
                                                    Floor space: Unknown                                                                                                         Developer: Fukuoka Jisho and
                                                    Developer: Tokyo Tatemono                                                                                                               Nomura Fudosan
                                                    Completion: Unknown                                                                                                          Completion: February 2009
                 Buildings to be
                 completed in 2008
                                                    Kamiyo Yakuin
                                                    Building                                            Gion Project*                   Meiji Yasuda Watanabe Building
                                                    Floor Space: 3,765 tsubos                           Floor space: Unknown            Floor space: 3,404 tsubos
                 Buildings to be                    Developer: Kamiyo Fudosan                           Developer: Tokyo Tatemono       Developer: Meiji Yasuda Life Insurance and Watanabe Jisho
                 completed in 2009                  Completion: March 2007                              Completion: Unknown             Completion: August 2007

                                                   Note) The above was created by Fukuoka Realty.                                                                                                                          36
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Kyushu Shinkansen to Fully Open in 2011




                                                                                                             Source: Fukuoka City’s “Report on Impact of Kyushu Shinkansen’s Opening on Fukuoka City”



                   Sole Concentration of Socioeconomic Activities on Fukuoka Metropolitan Area to Accelerate                                                                                              37
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Opening of the New Hakata Station Building
                                                                                                                           • Hakata Station is the largest terminal station in
           Opens                                                                                                             Kyushu with about 340,000 users a day

         2011                                                                                                              • The total floor area of the new station building is
                                                                                                                             about 200,000m2 (This is more than 6 times larger than
                                                                                                                             the present Hakata Station Building and amounts to more
                                                                                                                             than 4 Tokyo Domes)




            Overview of New Hakata Station Building
            Overview of New Hakata Station Building

          Site area                  About 22,000m2


          Floor area                 About 200,000m2


          No. of floors              3rd basement floor – 10th floor

                                     Station and general retail facility (department store,
          Usage                      specialty shops, entertainment, service, parking lot, bicycle
                                     parking lot, etc.)



                                 New Hakata Station Scheduled to Open Together with the Kyushu Shinkansen                                                                                     38
Presentation of Accounts for Fifth Fiscal Period   Portfolio   Acquisition Strategy   Management        Finance        Compliance     Environmental Analysis and Management Policy   Appendix




New Town Planning Measures

        The Hakata Station District Town                                                   Gofukumachi Business Center
       Planning Promotion Working Group


           • The Hakata Station District Town                                                           Taihaku Street Business Center
             Planning Promotion Working Group is
             the organization playing a central
             role in managing the Hakata Station
             District from now on.
           • The Working Group is
             conceptualizing a worthy face for the
             gateway to Kyushu and aims to work
             as one with the community in
             creating a planned town and
             managing the public space.                                               Planned construction site
                                                                                         of No. 2 Canal City
                                                                                                                                                                        Sanix Hakata
                                                                                                                                                                          Building
         [Participating Companies]
         ● Kyushu Railway (JR Kyushu)
         ○ Japan Post
         ○ Hakata Station Building
         ○ Fukuoka Traffic Center
         ○ Mitsui Fudosan
         ● Nishi-Nippon City Bank                                                                               Planned construction site for
         ○ Fukuoka Asahi Building                                                                             the New Hakata Station Building
         ● Fukuoka Jisho                                                Canal City Hakata
                                                                                                                                    Site area: 22,000m2
         ○ Fukuoka City                                        Canal City Business Center Building                                  Floor area: 200,000m2

         *●indicates sponsors of Fukuoka Realty




       Conceptual Strategy for the Hakata Station Area is Being Developed in Alliance with the Local Business World                                                                             39
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Management Policy




                                                                                                                                                                                    40
Appendix
Presentation of Accounts for Fifth Fiscal Period   Portfolio     Acquisition Strategy   Management             Finance               Compliance   Environmental Analysis and Management Policy   Appendix




Retail Property Description:                                                      Canal City Hakata and Preferred Silent Partnership Interest


              Urban SC         Canal City Hakata
                                                                  Nov 9, 2004             32bn yen                 6.0%
                                                               Characteristics
                                                               • Within walking distance from Hakata Station and located near the
                                                                 popular area of Nakasu
                                                               • 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

                                                               Stores                           Overview
                                                               • Washington Hotel               • Address:                 1-chome, Sumiyoshi,
                                                               • Comme Ca Store                                            Hakata Ward,
                                                               • United Cinema (cinema complex)                            Fukuoka City
                                                               • OPA (Canal City OPA)           • Total leasable area:     47,858.67m2
                                                               • Sports Authority               • Built:                   April 15, 1996
                                                               • Others                         • Property manager:        Fukuoka Jisho



              Urban SC         Preferred Silent Partnership Interest with CCH Bridge Y.K. as Operator
                                                               Characteristics
                                                               • Ownership of preferred silent partnership interest (3.4 billion yen) in CCH Bridge
                                                                 Y.K.(*), a special purpose company

                                                                 • CCH Bridge is a special purpose company that owns the portion
                                                                   outlined in white to the left (Canal City Hakata SPC portion).

                                                               • A contract to reserve acquisition of the “Canal City Hakata SPC
                                                                 Owned Section” for the subject real estate was also signed
                                                                 simultaneously (execution of the reservation fulfillment right by
                                                                 Fukuoka REIT will establish the transaction contract at a price
                                                                 appraised by the Tanizawa Appraisal Office or the Japan Real
                                                                 Estate Institute).
                                                               Tenants of the Section Owned by Canal City Hakata SPC
                                                               • 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
                                                               • Others                                                                                                                                     42
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Retail Property Description:                                                      Park Place Oita and SunLiveCity Kokura


                Regional SC             Park Place Oita
                                                                            Nov 9, 2004               15.7bn yen               6.5%
                                                               Characteristics
                                                               • Located in 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

                                                               Stores                   Overview
                                                               • Jusco                  • Address:             2-chome, Koen Dori
                                                               • K’s Denki                                     Nishi, Oita City
                                                               • T Joy                  • Total leasable area: 100,716.74m2
                                                               • Sports Authority       • Built:               March 26, 2002
                                                               • Plaza Capcom                                  April 17, 2002
                                                               • Others                                        April 28, 2004
                                                                                        • Property manager: FJ Real Estate




                 Regional SC            SunLiveCity Kokura
                                                                              Jul 1, 2005               6.63bn yen              6.6%
                                                               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 specialty
                                                                 stores centering on the SunLive Supermarket
                                                               • Core development in the Kami Kuzuhara Rezoning District (about
                                                                 120,000 tsubos), a large commercial zone
                                                               Store                    Overview
                                                               • SunLive                • Address:             2-chome, Kami Kuzuhara,
                                                                                                               Kokura Ward, Kitakyushu City
                                                                                        • Total leasable area: 61,450.22m2
                                                                                        • Built:               March 17, 2005
                                                                                        • Property manager: Fukuoka Jisho
                                                                                                                                                                                                           43
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Retail Property Description:                                                      Square Mall Kagoshima Usuki and Kumamoto Intercommunity SC


                Community SC              Square Mall Kagoshima Usuki

                                                                Sep 28, 2006                5.3bn yen               6.2%
                                                               Characteristics
                                                               • Located at one of the busiest thoroughfares of Kyushu (along Prefectural
                                                                 Highway 217) with 42,000 cars passing per 12 hours in 1999
                                                               • Leading category killers of each industry as tenants
                                                               • Design by John Jerde creates great appeal to users
                                                               • Concluded long-term leases with tenants that enjoy a high level of credibility

                                                               Stores                             Overview
                                                               • Sports Depo/Golf 5               • Address:         Usuki 2-chome,
                                                               • Nishimatsuya                                        Kagoshima City
                                                               • Honeys                           • Floor space:     14,661.72m2
                                                               • ABC Mart                         • Built:           September 28, 2006
                                                               • Best Denki, etc.                 • Property manager: Fukuoka Jisho



                Community SC              Kumamoto Intercommunity SC


                                                                Nov 30, 2006                2.4bn yen               6.5%
                                                               Characteristics
                                                               • Located at one of Kyushu’s busiest thoroughfares (along National Highway 57
                                                                 Bypass) with 39,000 cars passing per 12 hours in 1999
                                                               • Plan to conclude long-term leasehold contracts with highly regarded tenants

                                                               Stores                             Overview
                                                               • Sports Depo and Golf 5           • Address:          Kozono 1-chome,
                                                               • Starbucks                                            Kumamoto City
                                                                 (drive thru coffee shop)         • Floor area:       6,968.66m2
                                                                                                  • Built:            November 30, 2006
                                                                                                  • Property manager: Fukuoka Jisho

                                                                                                                                                                                                            44
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Retail Property Description:                                                    Hara SATY



                Regional SC            Hara SATY
                                                                          Mar 1, 2007                5.41bn yen                      6.8%
                                                                       Characteristics
                                                                       • Excellent location for retail property in Fukuoka suburb
                                                                       • 286,000 people within 3km radius (equivalent to a suburb in the Tokyo
                                                                         metropolitan area) and lacks competitor with equal size in the area
                                                                       • First SATY to open in Fukuoka (following full-scale renovation of a former
                                                                         Daiei store)
                                                                       • Long-term fixed lease agreement with Mycal Kyushu has been concluded
                                                                         (12 years, no early cancellation allowed, no decrease in rents allowed)

                                                                       Store
                                                                       • SATY

                                                                       Overview
                                                                       • Location: Sawara Ward, Fukuoka City
                                                                       • Floor space: 27,580.75m2
                                                                       • Built: October 26, 1976
                                                                         (Renovated in spring 2007)
                                                                       • Property Manager: Fukuoka Jisho



                                                                                (Excerpt from April 3, 2007 article in Nihon Keizai Shimbun)



                                                                                AEON Kyushu Merging with Mycal Kyushu
                                                                                AEON Kyushu and Mycal Kyushu are merging on August 21 with the continuing company being
                                                                                AEON Kyushu. The combined net sales for the two firms as forecast for fiscal 2006 will be the
                                                                                largest among large stores in Kyushu and the chain will boast 95 stores. AEON will own 62.78% of
                                                                                the company. SATY will remain as the store name of former Mycal Kyushu stores.




                                                                                                                                                                                                                45
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Office Property Description:                                                      Canal City Business Center Building and Gofukumachi Business Center

              Class A Building           Canal City Business Center Building

                                                                  Nov 9, 2004              14.6bn yen                    6.2%
                                                               Characteristics
                                                               • Pioneer of multi-use office and retail complexes
                                                               • Enjoys benefit of popularity and name recognition of Canal City Hakata
                                                               • Used by TOTO Ltd. as Fukuoka office and showroom
                                                               Tenants                          Overview
                                                               • TOTO                           • Address:             1-chome, Sumiyoshi,
                                                               • Bell System 24                                        Hakata Ward,
                                                               • USEN Corporation                                      Fukuoka City
                                                               • Aflac Japan                    • Total leasable area: 23,018.04m2
                                                               • Mitsubishi Electric Building   • Built:               April 15, 1996
                                                                 Techno-Service                 • Property manager: Fukuoka Jisho
                                                               • Others


               Class A Building
                                         Gofukumachi Business Center

                                                                  Nov 9, 2005               11.2bn yen                   6.2%
                                                               Characteristics
                                                               • Faces Meiji Dori and Taihaku Street and directly connects to Gofukumachi
                                                                 Subway Station
                                                               • Designed by Michael Graves, designer of the Museum of Newark
                                                               • Top Quality Specs in Region
                                                                      ■1 floor: 620 tsubos ■Ceiling height: 2,900mm ■Optic fiber cables
                                                               • Sanyo Shimpan, NTT West Japan-Kyushu, Sony Life Insurance and other
                                                                 leading firms use the premises as a call center
                                                               Tenants                          Overview
                                                               • Sanyo Shimpan                  • Address:             Kami Gofukumachi,
                                                               • NTT West Japan-Kyushu                                 Hakata Ward, Fukuoka City
                                                               • Sony Life Insurance            • Total leasable area: 19,906.21m2
                                                               • Suntory                        • Built:               October 16, 2003
                                                               • Sunny
                                                               • Others
                                                                                                • Property manager: Fukuoka Jisho
                                                                                                                                                                                                             46
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Office Property Description:                                                       Sanix Hakata Building and Taihaku Street Business Center
               Class A Building          Sanix Hakata Building

                                                                  Sep 30, 2005               4.4bn yen                   5.9%
                                                               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
                                                               Tenants                Overview
                                                               • Sanix                • Address:               2-chome, Hakataeki
                                                               • The Nishi-Nippon                              Higashi, Hakata Ward,
                                                                 City Bank                                     Fukuoka City
                                                               • ROHM                 • Total leasable area: 6,293.67m2
                                                               • Idemitsu Kosan       • Built:                 March 31, 2001
                                                               • Others               • Property manager: Fukuoka Jisho


               Class A Building          Taihaku Street Business Center


                                                                 Mar 16, 2006                7bn yen                  6.0%
                                                               Characteristics
                                                               • Superbly located with excellent accessibility: ten-minute walk from Hakata
                                                                 Station and a two-minute walk from Gion Subway Station; located along the
                                                                 “Taihaku Street” central thoroufare
                                                               • Exemplary facility specs for Fukuoka City office buildings:
                                                                        - Functional floor plan of 333 tsubos, 2.7m ceiling height, free access
                                                                          floor of 100mm, optical fiber cables, independent air conditioning
                                                                          systems, etc.
                                                               • Accompanied by luxurious 59-room residential tower- 1LDK – 3LDK units to
                                                                 meet requirements of downtown commuters

                                                               Tenants                                                              Overview
                                                               • NTT Comware                 • Tokio Marine & Nichido               • Address:             3-21 Gokushomachi, Hakata Ward, Fukuoka City
                                                               • Tokio Marine Nichido          Anshin Life Insurance                • Total leasable area: Office Tower: 11,225.30m2
                                                                 Jimu Outsourcing            • Others                                                      Residential Tower:3,427.38m2
                                                               • Fujitsu Network Solutions                                          • Built:               March 7, 2002
                                                                                                                                    • Property manager: Fukuoka Jisho
                                                                                                                                                                                                            47
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Residential Property Description:                                                               City House Tenjin Keyaki Dori                     (tentative)   and Amex Akasakamon Tower


                 Residential           City House Tenjin Keyaki Dori                      (tentative)



                                                        Dec 20, 2007            1.11bn yen               5.4%
                                                     Characteristics
                                                     • Near the Tenjin district with good access and walking distance from Tenjin Station and
                                                       Akasaka Station on the Municipal Subway Line
                                                     • Planned to have 13 stories above ground (total floor area of 3,531.37m2) and have
                                                       thirty 2LDK units (about 58m2 per unit) and twelve 3LDK units (about 75m2 per unit)
                                                     • Anti-seismic structure for high safety and security
                                                     Overview
                                                     • Address:                   Kego 2-chome, Chuo Ward, Fukuoka City
                                                     • Total floor area:          3,531.37m2
                                                     • Scheduled completion date: November 30, 2007
                                                     • Property manager:          DMC (a member of the Daio Group, a giant residential management company in the Tenjin area) (planned)




                  Residential           Amex Akasakamon Tower

                                                         Sep 1, 2006            2.06bn yen               5.4%
                                                     Characteristics
                                                     • Property is near the Tenjin area and enjoys strong transit convenience (within
                                                       walking distance of the metro subway’s Akasaka and Tenjin stations)
                                                     • A tower rental condominium with 2LDK(55.58m2)to 4LDK (144.84m2) units.
                                                      Overview
                                                     • Address: 2-chome Maizuru, Chuo Ward, Fukuoka City
                                                     • Leasable area: 4,755.14m2
                                                     • Built: July 26, 2005
                                                     • Property manager: DMC (a member of the Daio Group, a giant residential
                                                       management company in the Tenjin area)


                                                                                                                                                                                                          48
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Construction Confirmation Inspection Agencies
                                                                                                                                                                                                  Construction            Construction
                                                         Construction
                Property Name                                         Completion Date                                Design Companies                                 Contractor                  Confirmation           Confirmation        PML Value
                                                            Name
                                                                                                                                                                                                    Agency             Inspection Agency

                                                         New                                                                                                   Canal City Hakata New                                                         A 8.0%
                                                                                                          Fukuoka Jisho First Class Architect’s
                                                         construction                                                                                          Construction Zone 1                                                           B 7.6%
                                                                                                          Office, FJ Urban Development,
 Canal City Hakata                                       and                   April 15, 1996                                                                  Construction Joint               Fukuoka City           Fukuoka City
                                                                                                          Takenaka Corporation and Zenitaka                                                                                                  C 5.3%
                                                         renovation                                                                                            Venture and Takenaka
                                                                                                          Corporation Design Consortium (Note 1)
                                                         work                                                                                                  Corporation                                                                   D 11.1%

                                                         New                   March 26, 2002             Asanuma Corporation Kyushu Branch,
                                                         construction                                     First Class Architect’s Office                       Asanuma Corporation,
 Park Place Oita                                                               April 17, 2002                                                                                                   Oita City              Oita City             14.5%
                                                         and expansion                                    Fujita Corporation Kyushu Branch First               Fujita Corporation
                                                         work                  April 28, 2004             Class Architect’s Office

                                                         New                                                                                                   Penta-Ocean                      Japan ERI Co.,
 SunLiveCity Kokura                                                            March 17, 2005             Matsui and Kono Joint Design Venture                                                                         Japan ERI Co., Ltd.   6.7%
                                                         construction                                                                                          Construction Co., Ltd.           Ltd.
                                                         New
 Gofukumachi Business Center                                                   October 16, 2003           Institute of New Architecture Inc.                   Takenaka Corporation             Fukuoka City           Fukuoka City          4.0%
                                                         construction
                                                         New                                                                                                   Canal City Hakata New
                                                         construction                                     Fukuoka Jisho First Class Architect’s                Construction Zone 2
 Canal City Business Center Building                     and                   April 15, 1996             Office, FJ Urban Development First                   Construction Joint               Fukuoka City           Fukuoka City          6.9%
                                                         renovation                                       Class Architect’s Office                             Venture, Zenitaka
                                                         work                                                                                                  Corporation
                                                         New                                              Maeda Corporation First Class                        Maeda Corporation
 Sanix Hakata Building                                                         March 31, 2001                                                                                                   Fukuoka City           Fukuoka City          4.3%
                                                         construction                                     Architect’s Office                                   Kyushu Branch
                                                         New
 Taihaku Street Business Center                                                March 7, 2002              Yamashita Sekkei, Inc.                               Takenaka Corporation             Fukuoka City           Fukuoka City          7.5%
                                                         construction
                                                         New                   September 28,
 Square Mall Kagoshima Usuki                                                                              Yamashita Sekkei, Inc.                               Fujita Corporation               Kagoshima City         Kagoshima City        9.6%
                                                         construction          2006
                                                         New                   November 30,                                                                                                     Japan ERI Co.,
 Kumamoto Intercommunity SC                                                                               Kajima Corporation                                   Kajima Corporation                                      Japan ERI Co., Ltd.   16.3%
                                                         construction          2006                                                                                                             Ltd.
                                                         New                                                                                                   Tada Corporation                 Japan ERI Co.,
 Amex Akasakamon Tower                                                         July 26, 2005              Masaki Architect & Associates                                                                                Japan ERI Co., Ltd.   11.6%
                                                         construction                                                                                          Kyushu Branch                    Ltd.

 City House Tenjin Keyaki Dori                           New                   (not yet                                                                        Daiho Corporation                Japan ERI Co.,
                                                                                                          Planning Office LECS Co., Ltd.                                                                               (not yet completed)   -
 (tentative)                                             construction          completed)                                                                      Kyushu Branch                    Ltd.
                                                         New
 Hara SATY                                                                     October 26, 1976           Pal Corporation                                      Obayashi Corporation             Fukuoka City           Fukuoka City          13.2%
                                                         construction

 Portfolio                                                                                                                                                                                                                                    4.9%

(Note 1) This consortium is the joint design venture by the designers of each zone.
(Note 2) Of multiple assumed earthquake scenarios, the portfolio PML values of Fukuoka REIT have been calculated by assuming the central part of Fukuoka City as the earthquake epicenter.
(Note 3) Zones A through D of Canal City Hakata are classified by building status surveys. A indicates the Washington Hotel building, and B the amusement building, C the megastore building and D the common areas.
                                                                                                                                                                                                                                                            49
Presentation of Accounts for Fifth Fiscal Period              Portfolio            Acquisition Strategy   Management   Finance         Compliance      Environmental Analysis and Management Policy   Appendix




Analysis of Investor Attributes and Volume Ownership Reports
                          Distribution by Investor Category (Breakdown of Investment Units)
                          Distribution by Investor Category (Breakdown of Investment Units)                                                         Major Investors (End of 5th Fiscal Perriod)
                                                                                                                                                    Major Investors (End of 5th Fiscal Perriod)

                     Note) Figures in parentheses represent the number of investment units.




                                                                                                   Filing of Volume Ownership Report
                                                                                                   Filing of Volume Ownership Report




                                                                                                                                                                                                                 50
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History of Investment Unit Price
                                                                                  History of Investment Unit Price
                                                                                  History of Investment Unit Price




                                                                                                                                                                                            51
AppendixⅡ




            52
Presentation of Accounts for Fifth Fiscal Period   Portfolio      Acquisition Strategy   Management   Finance   Compliance   Environmental Analysis and Management Policy   Appendix




Where is Fukuoka/Kyushu




                                                                                                                                               Tokyo

                                                                                                                                         Osaka




                 Kyushu Region                                 Fukuoka Pref.

                 ■ 7 prefectures                               ■ 1.5h flight from Tokyo, Seoul,
                 ■ “#16” GDP in the world                        Shanghai
                 ■ 14mm Population                             ■ Population: 2.47mm
                 ■ Industry                                      (Metropolitan Area), 5mm
                  -Semiconductor                                 (Pref.)
                  -Automotive                                  ■ Strong history of commerce with
                  -Processed food                                Korea and China of more than
                    products                                     1,000 years




                            Kyushu, Westernmost Island of the 4 Main Japanese Islands, is the Closest to Asia                                                                          53
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Size of the Fukuoka Metropolitan Area

                    Populations of Major Japanese
                    Populations of Major Japanese
                         Metropolitan Areas
                         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




                Fukuoka is the Fourth Largest Metropolitan Area in Japan following Tokyo, Osaka and Nagoya                                                                                                    54
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Kyushu’s GDP is Near Australia’s in Size
                 Country Comparison of Kyushu’s GDP
                 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




                      Kyushu’s Commercial Capital:
                      Kyushu’s Commercial Capital:
                        Concentration on Fukuoka
                        Concentration on Fukuoka




                                Source: From the left, the Area Study of National Prefectures and Municipalities (official values as of October 1, 2004) issued by the Geographical Survey Institute, Estimated Present
                                        Population on October 1, 2004 issued by the Statistics Bureau of the Ministry of Internal Affairs and Communications, 2002 Prefectural Citizens’ Economic Figures issued by the
                                        Economic and Social Research Institute of the Cabinet Office and the 2002 Commercial Statistics Study of the Ministry of Economy, Trade and Industry

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Growth in Automobile and Semiconductor Industries

                                        Distribution of Primary Automobile and
                                        Distribution of Primary Automobile and                                                                             Long-term Fluctuations in Capital
                                                                                                                                                           Long-term Fluctuations in Capital
                                          Semiconductor Factories in Kyushu
                                          Semiconductor Factories in Kyushu                                                                                  Investment by Manufacturers
                                                                                                                                                             Investment by Manufacturers

                                                                           Toyota Motors Kyushu, Kanda Plant
                                                                           (Kanda-machi, Fukuoka Prefecture)                                                                              Capital investment by manufacturing
                                               DENSO Kitakyushu Plant                                                                                                                     industry in the Kyushu area:
                                               (Kitakyushu City)                   Nissan Motor, Kyushu Plant
                                                                                   (Kanda-machi, Fukuoka Prefecture)                                                                      673.2 bn yen
                   Toyota Motors Kyushu                                                                                                                                                   (planned for fiscal 2006)
                    (Wakamiya City, Fukuoka Prefecture)                                   ROHM Fukuoka
                                                                                          (Yukuhashi City, Fukuoka Prefecture)
                 Power Device Division,
                 Mitsubishi Electronic                                                       Daihatsu Auto Body
                 (Fukuoka City)                                                              (Nakatsu City, Oita Prefecture)

                                                                                                     Oita Canon
               Tokyo Electron Kyushu                                                                 (Kunisaki City, Oita Prefecture)
               (Tosu City, Saga Prefecture)


                                                                                                             Toshiba, Oita Plant
                                                                                                             (Oita City)
      Nagasaki Technology Center,                                 NEC Kyushu
      Sony Semiconductor Kyushu                                   (Kumamoto Prefecture)
      (Isahaya City, Nagasaki Prefecture)
                                                                                                          Asahi Kasei
                                       Aishin Kyushu                                                      Microsystems Kyushu
                                       (Jonan Town,                       Honda Motor,                    (Nobeoka City,
                                       Kumamoto Prefecture)               Kumamoto Plant                   Miyazaki Prefecture)

                                                              Fuji Photo Film
                                                              (Kikyuyo Town,
                                                              Kumamoto Prefecture)
                                                                                                  Miyazaki Oki Electric
        Fujitsu Integrated                                                                        (Kiyotake Town, Miyazaki Prefecture)
        Microtechnology, Kyushu Plant
        (Satsuma-Sendai City, Kagoshima
        Prefecture)                                                                          KYOCERA Corporation Kagoshima
                                                                                             Kokubu Plant
                                                                                             (Kirishima City, Kagoshima Prefecture)


                                     Automobile
                                     IT                                              Source: Nihon Keizai Shimbun, April 29, 2006




                                     Automobiles and Semiconductors Support Expansion in Capital Investment                                                                                                                      56
Presentation of Accounts for Fifth Fiscal Period                Portfolio            Acquisition Strategy           Management   Finance               Compliance            Environmental Analysis and Management Policy   Appendix




TOYOTA MOTOR KYUSHU Leads Expansion of Exports

                                                                                                                                           Toyota Establishing Second Largest Production
                                                                                                                                           Toyota Establishing Second Largest Production
                               Port of Hakata Expands Handling of Containers
                               Port of Hakata Expands Handling of Containers                                                                               Base in Japan
                                                                                                                                                            Base in Japan


                            History of Handling Volume of International Trade                                                                      Sales of Toyota Motor Kyushu
                            Containers (comparison among principal ports)

                   300
                                        Port of Tokyo
                                        Port of Yokohama
                   250
                                        Port of Nagoya
                                        Port of Kobe
                                        Port of Osaka
                   200
                                        Port of Hakata
                                        Japan total

                   150


                   100


                     50


                       0
                               1996     1997      1998     1999      2000     2001      2002     2003        2004   2005




                           (Note) Graph formed after establishing the figures in 1996 as 100
                           Source: Institute for Advanced Port Transportation of Japan
                           Ports and Harbours Bureau of the Ministry of Land, Infrastructure and Transport                           Source: Nihon Keizai Shimbun, July 6, 2006




                                                                                                                                                                                                                                       57
Presentation of Accounts for Fifth Fiscal Period      Portfolio       Acquisition Strategy    Management            Finance           Compliance   Environmental Analysis and Management Policy   Appendix




Estimated Future Population Changes
                                                                  Population Change in Principal Metropolitan Areas in Japan
                                                                  Population Change in Principal Metropolitan Areas in Japan
                                                                                  (Indicated by index with figures in 1985 as 100)
                                                                                   (Indicated by index with figures in 1985 as 100)




                                                   Fukuoka Metropolitan Area’s Population will Continue to Grow                                                                                              58
Presentation of Accounts for Fifth Fiscal Period   Portfolio   Acquisition Strategy   Management   Finance   Compliance      Environmental Analysis and Management Policy       Appendix




Population Growth
                                          Comparison of Population Growth in Major                                        Comparison of Students per 1,000 People
                                                                                                                          Comparison of Students per 1,000 People
                                          Comparison of Population Growth in Major                                            (Ordinance designated cities; universities and
                                                    Metropolitan Areas                                                         (Ordinance designated cities; universities and
                                                    Metropolitan Areas                                                                  junior colleges excluded)
                                                                                                                                         junior colleges excluded)




                                     Automobiles and Semiconductors Support Expansion in Capital Investment                                                                                59
Presentation of Accounts for Fifth Fiscal Period             Portfolio          Acquisition Strategy         Management                  Finance                Compliance           Environmental Analysis and Management Policy                 Appendix




Percentage of Change in Fukuoka City Land Prices                                                                                                                                     (2006 → 2007)

                                                                                                                                                           Percentage of Change in Fukuoka City
                                                                                                                                                           Percentage of Change in Fukuoka City
                                                                                                                                                                Land Prices (2006 → 2007)(YOY)
                                                                                                                                                                Land Prices (2006 → 2007)(YOY)




                  Percentage of Change in Fukuoka City
                  Percentage of Change in Fukuoka City
                       Land Prices (2005 → 2006)(YOY)
                       Land Prices (2005 → 2006)(YOY)




 (Source) Official land prices published by the Ministry of Land, Infrastructure and Transport and the Geographical Survey Institute’s 1/25000th Scale Map of Fukuoka (based on spatial data)
 Note 1) All of the reference sites for the land study located in central Fukuoka City are shown.
 Note 2) The red bar indicates locations where land prices have increased and the red numerals indicate the increase rate in land prices. The blue bars indicate where land prices have decreased and the blue numerals indicate the decrease rate in land
         prices.




        The 44.1% Increase at Hakata Ekimae 1-chome was the Third Highest Increase in Commercial Land Prices in Japan                                                                                                                                        60
Presentation of Accounts for Fifth Fiscal Period               Portfolio            Acquisition Strategy   Management          Finance     Compliance   Environmental Analysis and Management Policy   Appendix




Consumption Trends

                                                                      Fluctuations in Monthly (YOY) Comparisons of Large Retail Store Sales
                                                                      Fluctuations in Monthly (YOY) Comparisons of Large Retail Store Sales
                                                                                                            (June 2005 -- February 2007)
                                                                                                             (June 2005 February 2007)




              Source: Commercial Sales Statistics issued by the Ministry of Economy, Trade and Industry




                                                                               Fukuoka’s Retail Market has a Strong Base                                                                                          61
Presentation of Accounts for Fifth Fiscal Period    Portfolio       Acquisition Strategy        Management             Finance               Compliance       Environmental Analysis and Management Policy   Appendix




Primary Shopping Centers of Kyushu

                                                                                                                                                    Kitakyushu
                                                                                                                                                    metropolitan
                                                                                                                                                    area
                                                                                                              Fukuoka metropolitan area




                                                                                           Sasebo metropolitan area
                                                                                                                           Saga           Kurume metropolitan area
                                                                                                                        metropolitan
                                                                                                                           area
                                                                                                                                                                              Oita
                                                                                                                                                                              metropolit
                                                                                                                                                                              an area


                                                                                           Nagasaki metropolitan area
                                                                                                                                                  Kumamoto
                                                                                                                                                  metropolitan area



                      (Source) Floor area: Kyushu Factbook (2006 edition) published by
                               the Fukuoka Branch of the Development Bank of Japan;
                               the shopping centers with floor spaces of at least
                               15,000m2 were entered                                                                                              Miyazaki metropolitan
                               Population: the 2000 national census issued by the                                                                 area
                               Statistics Bureau of the Ministry of Internal Affairs and
                               Communications
                      (Note 1) The length of the graph illustrates the floor area size
                      (Note 2) Metropolitan Areas are the central cities and municipalities
                               where at least 10% of their populations work or study in                                                                                           Floor Area
                               the central cities and this is based on the workers due to                                                                 Miyakonojo
                               residence, workers who are 15 or older in the                                                                              metropolitan
                               municipalities and students commuting who are 15 or                                                                        area                             33,000m2
                               older in the 2000 national census issued by the Statistics                        Kagoshima metropolitan area
                               Bureau of the Ministry of Internal Affairs and                                                                                                     Population
                               Communications.
                                                                                                                                                                                            100,000

                                                                                                                                                                                            500,000

                                                                                                                                                                                           1,000,000



     Fukuoka REIT Carefully Discerns the Scope of the Trade Area and Competitive Environment in Selecting its Strategic Focus Areas                                                                                     62
Presentation of Accounts for Fifth Fiscal Period   Portfolio   Acquisition Strategy   Management         Finance        Compliance     Environmental Analysis and Management Policy   Appendix




                                                                                      Las Vegas                           Beyong the Strip
                                                                                       (U.S.)                             Long the fastest-growing metropolis in
                                                                                                                          America, sin city is building more than casinos.
   10 HIGH ROLLERS                                                                     Fukuoka                            City of Substance
                                                                                       (Japan)                            There are many would-be ‘Gateways to Asia.’ This
                                                                                                                          one’s for real.

                                                                                         Munich                           Rich and Richer
                                                                                         (Germany)                        A bright spot in the gloaming, but for how long?

                                                                                                                          Capital of Magnet
                                                                                           London                         London’s gain is Manchester’s loss, but Brits worry
                                                                                           (U.K.)                         more about Shanghai.

                                                                                             Toulouse                     ‘It’s Airbusville’
                                                                                             (France)                     An ancient city has evolved into a new type: the
                                                                                                                          multinational town.

                                                                                               Nanchang                   Welcome, World
                                                                                               (China)                    A star marks the unlikely epicenter of China’s
                                                                                                                          second-city explosion.

                                                                                                   Moscow                 The Great Pump
                                                                                                   (Russia)               Moscow draws all the new arrivals, from babies to
                                                                                                                          fortune seekers.

                                                                                                    Ghaziabad             Ring of Change
                                                                                                    (India)               A factory suburb of Delhi, now surrounded by posh
                                                                                                                          high rises.

                                                                                                      Goyang              Lovely Little Rebels
                                                                                                      (South Korea)       Built by the state, an affluent enclave is now battling
                                                                                                                          it.

                                                                                                        Florianopolis     Bigger yet Better
                                                                                                                          On ‘Magic island,’ a virtuous cycle began with a ban
                                                                                                        (Brazil)
                                                                                                                          on heavy industry.


                                                                                                                                                                                                 63
Presentation of Accounts for Fifth Fiscal Period     Portfolio   Acquisition Strategy   Management   Finance   Compliance   Environmental Analysis and Management Policy   Appendix




                                                   POINT 1
                • Capital investment in the manufacturing
                  industry in Kyushu has grown as fast as
                  52% in recent years
                • Fukuoka residents refer to Kyushu as Car
                  Island, or Silicon Island



                                                   POINT 2
                 • 50% increase in containers handled at
                   Hakata Port, the main port of Fukuoka City,
                   over the past six years
                 • Toyota established its second manufacturing
                   base in Japan in Kyushu and started shipping
                   Lexus models to China from Hakata this year




                                                   POINT 3
                 • Cultural assets and festivals that attract
                   tourists
                 • 50% increase in foreign tourists over the
                   past six years
                 • Consumption propelled by Asian tourists and
                   young visitors from other Kyushu areas


                                                                                                                                                                                      64
Presentation of Accounts for Fifth Fiscal Period         Portfolio                     Acquisition Strategy    Management            Finance          Compliance           Environmental Analysis and Management Policy                 Appendix




                                                      Increasing Number of Foreign Tourists                                                                             Fukuoka Has Strong Asian Features

                                     Fluctuation in the Number of Foreigners                                                                         Regional Breakdown of Foreigners
                                     Entering Japan                                                                                                  Entering Japan
                              (people)                         Breakdown by Principal Seaport                                                                                                               1.0
                                         160,000                                                                                                     100%                3.5
                                                             Port   of   Tokyo
                                                                                                                                                                                                            3.2
                                                             Port   of   Yokohama                                                                                                                           3.0
                                         140,000             Port
                                                             Port
                                                                    of
                                                                    of
                                                                         Osaka
                                                                         Kobe
                                                                                                                                                                         14.1
                                                             Port   of   Shimonoseki
                                                             Port   of   Hakata                                                                      80%
                                         120,000                                                                                                                        12.2

                                                                                                                                                                                                                                   No nationality
                                         100,000
                                                                                                                                                     60%                                                                           Oceania
                                                                                                                                                                                                                                   South America
                                          80,000                                                                                                                                                                                   North America
                                                                                                                                                                                                           92.7                    Africa
                                                                                                                                                     40%                                                                           Europe
                                          60,000
                                                                                                                                                                        68.2                                                       Asia

                                          40,000
                                                                                                                                                     20%

                                          20,000


                                               0                                                                                                      0%
                                                      2000                2001             2002         2003       2004                                              All of Japan                        Fukuoka
                                                                                                                                                                  Source: Immigration Bureau of Japan of the Ministry of Justice
                                                        Source: Immigration Bureau of Japan of the Ministry of Justice



                                                   Cultural Assets and Festivals that Attract Tourists




                                          Hakata Gion Yamagasa Festival                      Hakata Dontaku Festival        Kyushu National Museum   Kyokusui-no-en festival at Dazaifu
                                                                                                                                                            Tenmangu shrine



                                                                                                                                                                                                                                                    65

				
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