CORPORATE GOVERNANCE
iii.
Acquisition Fee
The Acquisition Fee, as contained in clause 15.2.1 (i) of the Trust Deed, is earned by the Manager upon the successful
completion of an acquisition. The fee seeks to motivate and compensate the Manager for the time and effort spent in
sourcing, evaluating and executing acquisitions that meet A-REIT’s investment criteria and increase long-term returns
for Unitholders. Additional resources and costs incurred by the Manager in the course of seeking out new acquisition
opportunities include, but are not limited to, due diligence efforts and man hours spent in evaluating the transactions.
In accordance with clause 15.2.1 (i) of the Trust Deed, the Acquisition Fee is calculated at 1.0% of the purchase price of
the investment property acquired by the Trustee on behalf of the Trust and subject to the Property Funds Appendix, shall
be paid to the Manager in the form of cash and/or units (as the Manager may elect).
As required by the Property Funds Appendix, where an acquisition constitutes an “interested party transaction”, the
Acquisition Fee payable to the Manager will be in the form of units which shall not be sold within one year from the date
of issuance.
iv.
Divestment Fee
The Divestment Fee, as contained in clause 15.2.1 (ii) of the Trust Deed, is earned by the Manager upon the successful
completion of a divestment. This fee seeks to motivate and compensate the Manager for its efforts in maximising value
for Unitholders by selectively divesting properties that have reached a stage which offers limited scope for further income
growth and to recycle capital and optimise A-REIT’s portfolio. The fee covers additional costs and resources incurred by
the Manager, including but not limited to, due diligence efforts and man hours spent in the course of the transactions.
In accordance with clause 15.2.1 (ii) of the Trust Deed, the Divestment fee is calculated at 0.5% of the sale price of the
investment property sold or divested by the Trustee on behalf of the Trust and subject to the Property Funds Appendix,
shall be paid to the Manager in the form of cash and/or units (as the Manager may elect).
As required by the Property Funds Appendix, where a divestment constitutes an “interested party transaction”, the
Divestment Fee payable to the Manager will be in the form of units, which shall not be sold within one year from the
date of issuance.
The Divestment Fee is lower than the Acquisition Fee because the sourcing, evaluating and executing of potential acquisition
opportunities generally require more resources, effort and time on the part of the Manager as compared to divestments.
v.
Development Management Fee
A development project is a project involving the development of land, or buildings, or part(s) thereof on land which is
acquired, held or leased by the Trust. It does not include refurbishment, retrofitting or renovations.
In accordance with clause 15.6 of the Trust Deed, the Manager is entitled to receive a Development Management
Fee not exceeding 3.0% of the total project costs incurred in development projects undertaken and managed by the
Manager. Any increase in the fees above the permitted limit or any change in the structure of the fees shall be approved
by an Extraordinary Resolution of a meeting of Unitholders duly convened and held in accordance with the provisions
of the Trust Deed. The fee allows the Manager to recover the cost of providing resources to manage the development
projects, which is outside the scope of the usual operations of the Manager. This serves to incentivise the Manager to
undertake development projects that will enhance returns for Unitholders, thereby aligning the Manager’s interests with
the interests of Unitholders.
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A-REIT ANNUAL REPORT
2015/2016
