149 ANNUAL REPORT 2025 Corporate Governance ADDITIONAL INFORMATION ADDITIONAL DISCLOSURES ON FEES PAYABLE TO THE MANAGER Pursuant to the revised CIS Code which came into effect on 1 January 2016, the methodology and justifications for each type of fees payable to the Manager should be disclosed, where such fees are payable out of the deposited property of UHREIT. The methodology for the computation and payment of fees, with reference to the relevant clauses in the Trust Deed, is disclosed on below and on pages 166 to 168 and 207 under the “Notes to the Financial Statements” section of this Annual Report. The management fees are earned by the Manager for the management of UHREIT’s portfolio of properties. The various fees earned by the Manager and their rationale are further elaborated below. BASE FEE AND PERFORMANCE FEE The Base Fee, as contained in Clause 15.1 of the Trust Deed, covers the day-to-day operational, compliance, monitoring and reporting costs as well as administrative overheads incurred by the Manager. The Base Fee represents the compensation to the Manager for executing its core responsibilities and is based on a percentage of the value of UHREIT’s deposited properties, which is an appropriate metric to determine the resources required for managing UHREIT. As UHREIT grows in portfolio size, the complexity of management increases and the Manager is expected to expend greater effort in fulfilling its responsibilities. The Performance Fee, as contained in Clause 15.1 of the Trust Deed, is based on the growth in distribution per unit (“DPU”), and incentivises the Manager to proactively manage its portfolio, which may include but are not limited to asset enhancement initiatives, repositioning or re-branding of its properties, re-segmentation of its properties’ customer base and driving cost efficiencies to improve profit margins. Such fee methodology aligns the interests of the Manager and Unitholders and ensures the long-term sustainability of the assets, instead of taking on excessive short-term risks to the detriment of the Unitholders. ACQUISITION FEE AND DIVESTMENT FEE The Acquisition Fee and Divestment Fee, which are contained in Clause 15.2 of the Trust Deed, seek to continue delivering long- term sustainable distribution income to the Unitholders. The Manager regularly reviews its portfolio of properties and sources of growth opportunities and yield-accretive acquisitions and efficiently recycles capital through the divestment of underperforming or non-core assets. This involves a thorough review of the exposures, risks and returns as well as the overall value-add of the acquisition or divestment to the existing portfolio and future growth expectations. The Acquisition Fee and Divestment Fee payable to the Manager serve as a form of compensation for the time, effort and resources spent in sourcing, evaluating and executing potential opportunities to acquire new properties or in rebalancing and unlocking the underlying value of the existing properties within its asset portfolio to optimise UHREIT’s returns. The Manager provides these services over and above the provision of ongoing management services with the aim of ensuring income sustainability and achieving the investment objectives of UHREIT. The Acquisition Fee is higher than the Divestment Fee because the time and effort undertaken in terms of sourcing, evaluating and conducting due diligence, and fund-raising for an acquisition, is higher as compared to a divestment. DEVELOPMENT MANAGEMENT FEE A Development Management Fee is provided under Clause 15.3 of the Trust Deed and is payable for new development projects managed by the Manager on behalf of UHREIT. The Development Management Fee compensates the Manager for property development which may require a longer gestation period and involves the supervision of significant construction activity, including extensive liaisons with external parties such as architects, engineers, designers, contractors and the relevant authorities.
RkJQdWJsaXNoZXIy NTM2MDQ5