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EC World Real Estate Investment Trust ANNUAL REPORT 2016
NOTES TO THE
Financial Statements
For the Financial Year ended 31 December 2016
1.
General information (continued)
(c) Acquisition and Divestment fees
The Manager is entitled to receive the following fees:
(i)
An acquisition fee at the rate of 0.75% for acquisitions from Related Parties (as defined in the Trust
Deed) and 1.0% for all other cases (or such lower percentage as may be determined by the Manager in
its absolute discretion).
In respect of any acquisition of real estate assets from related parties, such a fee should be in the form
of units issued by ECW at prevailing market price(s) instead of cash. Such units should not be sold
within 1 year from the date of their issuance; and
(ii)
A divestment fee at the rate of 0.5% (or such lower percentage as may be determined by the Manager
in its absolute discretion) of the sale price of the real estate sold or divested, pro-rated if applicable to
the proportion of ECW’s interest.
In respect of any sale or divestment of real estate assets from related parties, such a fee should be in
the form of units issued by ECW at prevailing market price(s) instead of cash. Such units should not be
sold within 1 year from the date of their issuance.
The acquisition and divestment fees will be paid in the form of cash and/or units and are payable as soon as
practicable after completion of the respective acquisition or disposal.
(d) Development management fee
The Manager is entitled to receive a development management fee equivalent to 3.0% of the total project
costs incurred in a development project undertaken and managed by the Manager on behalf of ECW.
The development management fee is payable in cash and/or units, in equal monthly instalments over the
construction period of each development project based on the Manager’s best estimate of the total project
costs and construction period and, if necessary, a final payment of the balance amount when the total
project costs are finalised.
(e) Fees under the Property Management Agreement
(i)
Property management services
The Trustee will pay Yuntong Property Management Co., Ltd. (the “Property Manager”), for each
fiscal year (as defined in the Property Management Agreement), a fee of 1.5% per annum of the gross
revenue of each property.
(ii)
Marketing services
Under the Property Management Agreement, the Trustee will pay the Property Manager, the following
commissions:
•
1 month’s gross rent for securing a tenancy of 24 months or more; and
•
0.5 month’s gross rent for renewal of existing lease; and
If the new lease secured or lease renewal is for tenure of less than 24 months, the commission shall
be calculated on a pro rata basis.
The lease commission payable to the Property Manager in respect of the marketing services to be provided
for the Properties in the IPO Portfolio or the IPO Properties (Note 14) shall only be payable for new leases
entered into or existing leases renewed in the year commencing from 1 January 2018 and thereafter.