08-06-2024, 04:34 PM
(07-06-2024, 06:08 PM)CY09 Wrote: Thanks hancheng, if there is a conflict of interest in how the REIT manager is acting to the detriment to Unitholders, are there any course of action Unitholders can take besides voting out the REIT manager?
It seems to be a significant conflict of interest if ARA's base fee is indeed based on AUM. This is because they are trying to earn more fees while Unitholders suffer a loss. Even at a cap rate of 3.8%, the sale of a Singapore Office Property could potentially outweigh the interest accurred from the SGD denomianted loan. Something is not right and this is a possible conflict of interest that borders on legal implications or that the Singapore valuer is overstating asset value by too wide a degree
The conflict is always there, is an inherent risk due to external manager model. This will truly eliminate if the manager is internalised but I doubt this will happen in Singapore. Just look at the mess right now with Sabana REIT.
The whole game is grow the AUM and increase DPU, so everyone is happy. just that the manager cannot be too greedy early.