Disclosure
On Fees
Acquisition Fee and Divestment Fee
The Acquisition Fee and Divestment Fee are structured in order to incentivise the Manager to source for inorganic growth,
as well as to realise mature assets where suitable in the interests of Unitholders, in accordance with the acquisition
growth and active asset management strategies of PLife REIT. Bearing in mind that the Manager has to undertake
an extensive scope of work over and above the overall management of PLife REIT when undertaking acquisition or
divestment opportunities (including but not limited to compliance with the applicable laws, rules and regulations relating
to the acquisition or divestment, exploring shortlisting and monitoring investment opportunities, conduct of due diligence,
evaluation and in depth assessment of the acquisition or divestment opportunity, negotiations with counterparties,
conduct of board meetings and as the case may be, preparation of circulars and announcements), the Manager should
be compensated fairly to reflect the effort expended and the costs incurred during such undertakings. It should be noted
that the Acquisition Fee and Divestment Fee are only payable where the acquisition or divestment has been successfully
completed.
Lease Management Fee
The Manager is entitled to lease management fee for provision of lease management services to the Properties of PLife
REIT (excluding the Hospital Properties for the duration of the master lease agreements) which includes coordinating
tenant’s fitting-out requirements, administration of rental collection, management of rental arrears and administration
of all property tax matters. In consideration for the provision of such lease management services, the Manager should
be entitled to fair remuneration. For avoidance of doubt, the Manager does not earn any lease management fee for the
Properties of PLife REIT located in Japan whereby the related services are carried out by the Japan asset managers
under the
Tokumei Kumiai
(“
TK
”) structure. The Manager has also excluded the Hospital Properties for the duration of the
master lease agreements to avoid any double counting of fees.
Marketing Services Commission
The Marketing Services Commission is structured to incentivise the Manager to secure longer term leases which in turn
provides stability in the income stream of PLife REIT. Accordingly, the Manager is entitled to a higher commission where
the term of the lease is longer than three years. Higher commissions are payable for securing leases with new tenants as
compared to renewals of existing leases due to the increased effort which has to be expended by the Manager to market,
source for, attract and negotiate with new tenants. The Marketing Services Commission payable to the Manager if a third
party agent secures a lease is higher to take into account the Manager’s expenses as the Manager is responsible for
paying such third party agent. The Manager has to liaise, instruct and oversee the marketing activities of such third party
agent and should be fairly compensated for its efforts. The Marketing Services Commission will serve to ensure that the
Manager secures leases in the interests of PLife REIT and Unitholders.
Property Management Fee
The Manager is entitled to the property management fee for provision of property management services to the Properties
of PLife REIT (excluding the Hospital Properties for the duration of the master lease agreements). Generally, when
providing property management services, the Manager has to ensure compliance with the local regulations, manage
relations with many counterparties, and constantly review and assess the Properties of PLife REIT to ensure that there
is minimal disruption to existing operations. The Manager has to co-ordinate and plan to manage the Properties of PLife
REIT and also ensure that Properties of PLife REIT are well-managed so as to maximise returns for Unitholders.
In return for providing property management services which are beyond the ordinary scope of the Manager’s overall
management services, the Manager should be compensated fairly for its expertise. In addition, the Property Management
Fee has been structured so that the Manager is incentivised to improve the performance of the Properties of PLife REIT
managed by the Manager as these fees are pegged to the gross revenue of the real estate. For avoidance of doubt, the
Manager does not earn any property management fee for the Properties of PLife REIT located in Japan whereby the
related services are carried out by the Japan asset managers under the TK structure. The Manager has also excluded the
Hospital Properties for the duration of the master lease agreements to avoid any double counting of fees.
ParkwayLife REIT
Annual Report 2015
72
