NOTES TO THE FINANCIAL STATEMENTS
1
General (Cont’d)
(B)
Management fees (Cont’d)
(ii)
A performance fee (“Performance Fee”), where the total return (comprising capital gains and
accumulated distributions and assuming all distributions are reinvested in CIT) of the Units
(expressed as the Trust Index) in any six-month period ending 30 June or 31 December (“Half-
Year”) exceeds the total return of a benchmark index (the “Cambridge Benchmark Index”).
The Cambridge Benchmark Index, compiled and calculated independently by FTSE, currently
comprises the largest ten Singapore Real Estate Investment Trusts by market capitalisation. 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 Cambridge 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
Cambridge Benchmark Index. This tier of the fee is calculated at 5.0% (2013:15.0%) 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 Cambridge Benchmark Index, multiplied by the equity market
capitalisation of CIT.
The Tier 2 Performance Fee rate was reduced from 15% to 5% by the Manager in favour of
the Unitholders on 17 April 2014.
For the purposes of the Tier 1 Performance Fee and the Tier 2 Performance Fee, the amount by
which the total return of the Trust Index exceeds the total return of the Cambridge Benchmark
Index shall be referred to as “outperformance”.
The outperformance of the Trust Index is assessed on a cumulative basis and any prior
underperformance of CIT will need to be recovered before the Manager is entitled to any
Performance Fee.
The Performance Fee, whether payable in any combination of cash and Units or solely in cash or
Units will be payable six monthly in arrears. If a trigger event occurs in any Half-Year, resulting in
the Manager being removed, the Manager is entitled to payment of any Performance Fee (whether
in cash or in the form of Units) to which it might otherwise have been entitled for that Half-Year
in cash, which shall be calculated, as if the end of the Half-Year was the date of occurrence of
the trigger event, in accordance with the Trust Deed. If a trigger event occurs at a time when
any accrued Performance Fee has not been paid, resulting in the Manager being removed, the
Manager is entitled to payment of such accrued Performance Fee in cash.
Management fees (Base Fee and Performance Fee, including any accrued Performance Fee which
have been carried forward from previous financial years but excluding any acquisition fee or
disposal fee) to be paid to the Manager in respect of a financial year, whether in cash or in Units or
a combination of cash and Units, are capped at an amount equivalent to 0.8% per annum of the
value of Deposited Property as at the end of the financial year (referred to as the “annual fee cap”).
CAMBRIDGE INDUSTRIAL TRUST | A WINNING FORMULA
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