Fees payable by PLife REIT
Amount payable to the Manager
5 Fee for marketing services
(continued)
If a third party agent secures a lease, the Manager will be responsible for
any marketing services commission payable to such third party agent,
and the Manager will be entitled to a marketing services commission of:
(i) 1.2 months’ gross rent inclusive of service charge for securing or
renewal of a lease of three years or less; and
(ii) 2.4 months’ gross rent inclusive of service charge for securing or
renewal of a lease of more than three years.
The marketing services commission may be adjusted accordingly at
the time of securing or renewal of a lease by the Manager or a third
party agent, to be consistent with and no higher than the prevailing
market rates of such marketing services commission in the country
where the real estate is located.
6 Fee for property management
Property Management Fee
2.0% per annum of the revenue of the real estate held directly or
indirectly by PLife REIT and managed by the Manager (excluding the
Hospital Properties for the duration of the master lease agreements).
For the avoidance of doubt, no Property Management Fee shall be
payable to the Manager in respect of the Hospital Properties for the
duration of the master lease agreements.
The Manager is of the view that the fee structure of PLife REIT promotes alignment of interests between the Manager and
the long-term interests of Unitholders. The rationale for each fee component is elaborated upon below:
Base Fee
As an external manager, the Manager manages the assets and liabilities of PLife REIT for the benefit of its Unitholders and
should be fairly compensated for conducting the overall management of PLife REIT’s various affairs, which includes, among
others, formulation of business plans, execution of PLife REIT’s strategies, performing data analytics, monitoring operating
costs, evaluating asset enhancement initiatives and investment opportunities. Another key responsibility is ensuring that
PLife REIT complies with the applicable provisions of the Securities and Futures Act, Chapter 289 of Singapore (“
SFA
”)
and all other relevant laws and regulations, such as the listing manual of Singapore Exchange Securities Trading Limited
(“
Listing Manual
”), the CIS Code (including the Property Funds Appendix), the Trust Deed, the tax ruling issued by Inland
Revenue Authority of Singapore on the taxation of PLife REIT and its Unitholders and all relevant contracts entered on
behalf of PLife REIT. The Base Fee compensates the Manager for establishing a core team of representatives who are
appointed in accordance with the SFA to execute its responsibilities as manager of a real estate investment trust.
The Base Fee is linked to the value of all the assets of PLife REIT as the complexity and scope of work is commensurate
to the size of PLife REIT’s portfolio. In the event that the portfolio of PLife REIT grows, the degree and complexity of the
Manager’s responsibilities will correspondingly increase and the Manager has to be amply remunerated. This ensures that
the Manager is able to dedicate its efforts to the growth of PLife REIT.
Performance Fees
With effect from 1 January 2016, the Performance Fee in respect of every calendar year shall be paid in arrears, no more
frequent than once a year. The Performance Fee structure of PLife REIT will incentivise the Manager to seek continuous
growth opportunities and encourage the Manager to act in the interests of Unitholders by increasing the rental income
generated from the real estate held directly or indirectly by PLife REIT (the “
Properties of PLife REIT
”) while reducing
property level expenses. Accordingly, the Performance Fee incentivises the Manager to take a holistic and double-pronged
approach towards the management of PLife REIT to improve the operating performance of PLife REIT so that the Manager
may, together with Unitholders, enjoy a higher net property income.
ParkwayLife REIT
Annual Report 2015
71
