NOTES TO THE FINANCIAL STATEMENTS Year ended 31 December 2023 1 GENERAL (continued) 1.2 Marketing fees (continued) (ii) Pursuant to the New PMA, in respect of marketing services provided by the Office Property Manager for the leases pertaining to the office premises in the office buildings as well as the office premises in the retail buildings (which may include premises in the properties managed by the Retail Property Manager pursuant to the New PMA), the marketing fees are charged as follows:- (a) in respect of new tenancies: • 0.5 month’s gross rental for securing a tenancy up to 2 years: • 1.2 month’s gross rental for securing a tenancy of 2 years to less than 5 years; • 2 months’ gross rental for securing a tenancy of more than 5 years. (b) in respect of renewal of existing tenancies: • 0.25 month’s gross rental for securing a tenancy up to 2 years: • 0.5 month’s gross rental for securing a tenancy of 2 years to less than 5 years; • 1 month’s gross rental for securing a tenancy of more than 5 years. (iii) Under the Old PMA with the Office Property Manager, in respect of marketing services provided by the Office Property Manager for the leases pertaining to the office premises in the office buildings, the marketing fees are charged as follows:- (a) in respect of new tenancies: • 0.5 month’s gross rental for securing a tenancy up to 2 years: • 1.0 month’s gross rental for securing a tenancy of 2 years to less than 5 years; • 2 months’ gross rental for securing a tenancy of more than 5 years. (b) in respect of renewal of existing tenancies: • 0.25 month’s gross rental for securing a tenancy up to 3 years: • 0.5 month’s gross rental for securing a tenancy of more than 3 years. 1.3 Staff cost reimbursement Similar to the existing arrangement in the various property management agreements for the Trust’s properties in Singapore, the New PMA provides for the reimbursement of the agreed employment and remuneration costs of the personnel of the Retail Property Manager and Office Property Manager (the “Agreed Employee Expenditure”). An additional measure was introduced in the New PMA to provide that the Agreed Employee Expenditure shall not exceed the Reimbursement Cap1. Subsequent to the first fiscal year, the Reimbursement Cap for each fiscal year shall be the same as the preceding fiscal year, and any increase in the Reimbursement Cap shall be subject to the approval of the Independent Directors. With the changes made to marketing fees under Note 1.2, the lease marketing staff costs in relation to the hiring of personnel to handle the work relating to sourcing and negotiation of new and renewed tenancies, but excluding the work relating to lease management and lease administration (such as work relating to the issuance and processing of tenancies) has been removed from the reimbursable staff costs payable to the Retail Property Manager and Office Property Manager. 1 The “Reimbursement Cap” is computed based on a percentage of the net property income (“NPI”) in the relevant fiscal year, and such percentage takes into account the average staff cost reimbursements paid to the Retail Property Manager and Office Property Manager over the past fiscal years over the NPI in the relevant past fiscal years. ANNUAL REPORT 2023 187 Other Information Overview Leadership Performance Framework
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