ESR-REIT (formerly Cambridge Industrial Trust)

[Greenrookie]

Took a look at the details of the formula for the management fees.
It looks rather innocuous and aligned to the unitholder's interest at first sight; i think the killer is the high absolute number when the fees==
a) 5% * X * market cap for Tier 1 and
b) 15% * Y *market cap for Tier 2
and given that the market cap right now is 1224mio*0.745=912mio

so performance fee = 0.2*(0.169-0.02)*912= 27mio thereabouts.
The larger the REIT gets (no. of units*price), the higher the fees.

******************
Management Fees — Performance Fee
A Performance Fee, where the total return (comprising
capital gains and accumulated distributions and
assuming all distributions are re-invested in CIT) of the
Units (expressed as the Trust Index) in any Half Year
exceeds the total return (comprising capital gains and
accumulated distributions and assuming re-investment
of all distributions) of the Benchmark Index.
The Performance Fee is calculated in two tiers as
follows:
• a Tier 1 Performance Fee equal to 5.0% of the
amount by which the total return of the Trust Index
exceeds the total return of the Benchmark Index,
multiplied by the Equity Market Capitalisation of
CIT; and
• a Tier 2 Performance Fee which is applicable only
where the total return of the Trust Index is in
excess of 2.0% per annum (1.0% for each Half
Year) above the total return of the Benchmark
Index. This tier of the fee is calculated at 15.0% of
the amount by which the total return of the Trust
Index is in excess of 2.0% per annum above the
total return of the Benchmark Index, multiplied by
the Equity Market Capitalisation of CIT.

where the Benchmark Index refers to:
a performance tracking index comprising all of the real estate investment trusts contained in the
FTSE AllCap Singapore universe (but excluding CIT) provided by FTSE or another index provider
with similar capabilities

What does beating the benchmark index returns mean? It mean the price of Cambridge units rose faster than the index returns? returns include distribution too?

Seems a bit too complicated to me.

Sabana's management fees seem more straight forward and unitholder friendly:

The Manager is entitled, under the Trust Deed, to a management fee comprising:
k a base fee of 0.5% per annum of the value of the Deposited Property; and
k a performance fee of 0.5% per annum of the Net Property Income in each relevant year,
provided Sabana Shari’ah Compliant REIT achieves at least 10.0% in annual growth in
DPU over the previous financial year1 (calculated after accounting for the performance
fee (if any) for that financial year and after adjusting, at the discretion of the Manager, for
any new Units arising from the conversion or exercise of any instruments convertible into
Units which are outstanding at the time of calculation, and any rights or bonus issue,
consolidation, subdivision or buy-back of Units).

Although I have difficulty understanding how the CMF work

(Not vested in both)