1.Financial Policy

Fukuoka REIT dedicates itself to efficiently managing assets including the debt of capital from qualified institutional investors or issuing of investment corporation bonds for the objective of obtaining capital to acquire assets, conduct construction work on for-rent real estate and repay debt. However, the combined total of borrowings and investment corporation bonds shall not surpass a ceiling of 1 trillion yen.

As a financial policy, Fukuoka REIT shall strive to minimize cost increases brought on by hikes in interest rates by obtaining capital primarily through long-term fixed interest loans and by conservatively managing the portfolio with a conservative LTV or low borrowing rate. Additionally, Fukuoka REIT will strive to maximize increases in earnings through the strong economy by increasing rent revenue using sales-linked rents and through external growth at appropriate prices by effectively utilizing the sponsor pipeline. These measures will be used to hedge against the risk of rising interest rates.

2.Financial Strategy

Fukuoka REIT is committed to stabilizing the procurement of capital in the medium to long term by taking out long-term fixed interest loans, entering into loans with a long-term maturity with no collateral and diversifying lenders.

1. Maintaining a ceiling on the ratio of interest-bearing debt
   The ratio of interest-bearing debt (the ratio of the sum total of borrowings and investment corporation bonds to total assets), or LV, is managed as a rule with a ceiling of 60%. Fukuoka REIT is committed to stable finances through management of the LTV within a sound range.
2. Converting interest-bearing debt into long-term and fixed debt
   Fukuoka REIT is committed to stabilizing the cost of raising capital through loans and other means by lengthening the procurement period and pursuing fixed interest rates on raised capital.
3. Spreading out maturities of interest-bearing debt
   Fukuoka REIT will continue to spread out the maturities of interest-bearing debt to reduce the refinancing risk upon maturity of the different debt instruments.
4. Raising capital with no collateral
   Fukuoka REIT as a rule will not procure funds that are secured by capital (only financing with no collateral).
5. Expanding methods and sources for raising capital
   Fukuoka REIT intends to expand the financial institutions it deals with when raising capital. Presently capital is borrowed from the Development Bank of Japan, mega banks, and regional banks primarily in Kyushu, but effort will be devoted to initiating transactions with other financial institutions. Currently capital is borrowed only from the financial institutions, but Fukuoka REIT's expansion of capital-raising methods and sources includes the possibility of floating investment corporation bonds.

4.Maintaining and Improving Our Credit Rating

Fukuoka REIT obtained a long-term company rating of "A-" from Standard & Poor's Rating Service (S&P) in September 2005 soon after listing, and obtained an issuer rating of "A+" from Rating and Investment Information (R&I) in November 2007. The latest assigned rating is a long-term senior debts rating of "AA-" from Japan Credit Rating Agency, Ltd. (JCR) in February 2011.