119 Annual Report 2024 1 GENERAL (continued) 1.2 Marketing fees (continued) (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. 1.4 Management fees Pursuant to the Trust Deed, the management fees shall not exceed 0.70% per annum of the Deposited Property or such higher percentage as may be fixed by an Extraordinary Resolution at a meeting of Unitholders. Deposited Property refers to all the assets of the Trust, including all its Authorised Investments (as defined in the Trust Deed) for the time being held or deemed to be held upon the trusts of the Trust Deed. The management fees comprise: (a) in respect of Authorised Investments which are in the form of real estate, a base component of 0.25% per annum of Deposited Property and a performance component of 4.25% per annum of net property income of the Trust for each financial year; and (b) in respect of all other Authorised Investments which are not in the form of real estate, 0.5% per annum of the investment value of the Authorised Investment, unless such Authorised Investment is an interest in a property fund (either a real estate investment trust or private property fund) wholly managed by a wholly-owned subsidiary of CapitaLand Limited (now known as CapitaLand Group Pte. Ltd.), in which case no management fee shall be payable in relation to such Authorised Investment. In respect of all Authorised Investments which are in the form of real estate acquired by the Trust: (a) the base component shall be paid to the Manager in the form of cash and/or Units (as the Manager may elect); and (b) the performance component shall be paid to the Manager in the form of cash, in the form of Units or a combination of both (as the Manager may elect). When paid in the form of Units, the Manager shall be entitled to receive such number of Units as may be purchased for the relevant amount of the management fee at the market price (as defined in the Trust Deed). The base and performance components of the management fees are payable quarterly and yearly in arrears respectively. 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.
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