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CIRCULAR DATED 25 MARCH 2013
THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION.
Singapore Exchange Securities Trading Limited assumes no responsibility for the correctness of
any of the statements made, reports contained or opinions expressed in this Circular. If you are
in any doubt as to the course of action you should take, you should consult your stockbroker, bank
manager, solicitor, accountant or other professional adviser immediately.
If you have sold or transferred all your units in Cambridge Industrial Trust, you should immediately
forward this Circular together with the Notice of Extraordinary General Meeting and the
accompanying Proxy Form to the purchaser or the transferee or to the bank, stockbroker or other
agent through whom the sale or transfer was effected for onward transmission to the purchaser
or transferee.
(A unit trust constituted in the Republic of Singapore pursuant to a trust deed dated 31 March 2006 (as amended))
MANAGED BY
CAMBRIDGE INDUSTRIAL TRUST MANAGEMENT LIMITED(Company Registration No.: 200512804G, Capital Markets Services Licence No.: CMS 100132-2)
CIRCULAR TO UNITHOLDERS
IN RELATION TO
(1) THE PROPOSED UNIT ISSUE SUPPLEMENT TO THE TRUST DEED;
(2) THE PROPOSED DEVELOPMENT MANAGEMENT FEE SUPPLEMENT TO THE TRUST
DEED, AN INTERESTED PERSON TRANSACTION AND AN INTERESTED PARTY
TRANSACTION; AND
(3) THE PROPOSED PERFORMANCE FEE SUPPLEMENT TO THE TRUST DEED, AN
INTERESTED PERSON TRANSACTION AND AN INTERESTED PARTY TRANSACTION
IMPORTANT DATES AND TIMES:
Last date and time for lodgment of Proxy Form : 17 April 2013 at 2.30 p.m.
Date and time of Extraordinary General Meeting : 19 April 2013 at 2.30 p.m. (or as soon
thereafter following the conclusion/
adjournment of the Annual General Meeting
of CIT to be held at 2.00 p.m. on the same
day and at the same place)
Place of Extraordinary General Meeting : NTUC Auditorium, Level 7, NTUC Centre,
One Marina Boulevard, Singapore 018989
TABLE OF CONTENTS
CORPORATE INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
LETTER TO UNITHOLDERS
1. INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
2. THE PROPOSED UNIT ISSUE SUPPLEMENT TO THE TRUST DEED . . . . . . . . . . 17
3. THE PROPOSED DEVELOPMENT MANAGEMENT FEE SUPPLEMENT TO THE
TRUST DEED. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
4. THE PROPOSED PERFORMANCE FEE SUPPLEMENT TO THE TRUST DEED. . . 24
5. INTERESTS OF DIRECTORS, SUBSTANTIAL UNITHOLDERS AND THE
MANAGER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
6. RECOMMENDATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
7. EXTRAORDINARY GENERAL MEETING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
8. ABSTENTIONS FROM VOTING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
9. ACTION TO BE TAKEN BY UNITHOLDERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
10. DIRECTORS’ RESPONSIBILITY STATEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
11. CONSENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
12. DOCUMENTS ON DISPLAY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
APPENDIX A – PROPOSED UNIT ISSUE SUPPLEMENT TO THE TRUST DEED . . . . 34
APPENDIX B – PROPOSED DEVELOPMENT MANAGEMENT FEE SUPPLEMENT TO
THE TRUST DEED . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
APPENDIX C – PROPOSED PERFORMANCE FEE SUPPLEMENT TO THE TRUST
DEED . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
APPENDIX D – LETTER OF THE INDEPENDENT FINANCIAL ADVISER . . . . . . . . . . 47
APPENDIX E – INTERESTED PERSON TRANSACTIONS AND INTERESTED PARTY
TRANSACTIONS ENTERED INTO BY CIT . . . . . . . . . . . . . . . . . . . . . . 69
NOTICE OF EXTRAORDINARY GENERAL MEETING . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
PROXY FORM
i
CORPORATE INFORMATION
Directors of Cambridge
Industrial Trust
Management Limited
(the manager of CIT)
(the “Manager”)
: Dr Chua Yong Hai
(Independent Chairman)
Professor Ong Seow Eng
(Independent Director, Chairman of Audit, Risk Management
and Compliance Committee)
Mr Tan Guong Ching
(Independent Director, Member of Audit, Risk Management
and Compliance Committee)
Mr Ooi Eng Peng
(Independent Director, Member of Audit, Risk Management
and Compliance Committee)
Mr Michael Patrick Dwyer
(Non-Executive Director, Member of Audit, Risk Management
and Compliance Committee)
Mr Victor Ong Wei Tak
(Alternate Director to Mr Michael Patrick Dwyer)
Mr Masaki Kurita
(Non-Executive Director)
Mr Ian Andrew Smith
(Non-Executive Director)
Mr Lee Stuart Neibart
(Non-Executive Director)
Mr Christopher Dale Calvert
(Executive Director and Chief Executive Officer)
Registered Office
of the Manager
: 61 Robinson Road
#12-01 Robinson Centre
Singapore 068893
Trustee of CIT
(the “Trustee”)
: RBC Investor Services Trust Singapore Limited, in its capacity
as trustee of CIT
20 Cecil Street
#28-01 Equity Plaza
Singapore 049705
Legal Adviser
to the Manager
: WongPartnership LLP
12 Marina Boulevard Level 28
Marina Bay Financial Centre Tower 3
Singapore 018982
Legal Adviser
to the Trustee
: Lee & Lee
50 Raffles Place
#06-00 Singapore Land Tower
Singapore 048623
Independent Financial
Adviser to the
Independent Directors
of the Manager
: Deloitte & Touche Corporate Finance Pte Ltd
6 Shenton Way
#32-00 Tower Two
Singapore 068809
Unit Registrar and
Unit Transfer Office
: B.A.C.S. Private Limited
63 Cantonment Road
Singapore 089758
1
SUMMARY
The following summary is qualified in its entirety by, and should be read in conjunction with, the
full text of this Circular. Capitalised terms shall have the meanings ascribed to them in the section
titled “Definitions” of this Circular.
SUMMARY OF APPROVALS SOUGHT
The Manager seeks approval from Unitholders for the matters stated below:
(1) The Proposed Unit Issue Supplement to the Trust Deed
The Manager proposes to supplement the Trust Deed with the Unit Issue Supplement, with
the proposed changes summarised in the table below:
Relevant
components
of the Unit
issue
structure
Specific limits under
the current Unit issue
structure
Limits set out in the Listing Manual
under the proposed Unit issue
structure
Issue price of
a Unit for a
rights issue
Must not be less than
50% (or such other
percentage permitted by,
inter alia, the SGX-ST) of
the prevailing Market
Price1.
No distinction is made
between non-
renounceable and
renounceable rights
issue.
Removal of existing specific limits and
replaced by the limits set out in the Listing
Manual2 as revised and updated from time
to time.
As of the Latest Practicable Date, the limits
set out in the Listing Manual on issue price
for rights issues are as follows:
– Non-renounceable Rights Issue:
• Rule 816(2)(a)(i) – no discount
limits if specific Unitholders’
approval is sought.
• Rule 816(2)(a)(ii) – 10% discount
limit if issuance is made in
reliance on general mandate
obtained under Rule 806.
– Renounceable Rights Issue:
• No limits specified as to issuance
price.
1 “Market Price” means the volume weighted average price for a Unit for all trades on the SGX-ST in the ordinary course
of trading on the SGX-ST for the period of 10 Business Days immediately preceding the relevant Business Day or (if
the Manager believes that such calculation does not provide a fair reflection of the market price of a Unit) an amount
as determined by the Manager and the Trustee (after consultation with a stockbroker approved by the Trustee), as
being the fair market price of a Unit.
2 “Listing Manual” means the Listing Manual of the SGX-ST, as the same may be modified, amended, supplemented,
revised or replaced from time to time.
2
Relevant
components
of the Unit
issue
structure
Specific limits under
the current Unit issue
structure
Limits set out in the Listing Manual
under the proposed Unit issue
structure
Issue price of
a Unit for any
reinvestment
of distribution
arrangement
Must not be less than
90% of the prevailing
Market Price.
Removal of existing specific limits and
replaced by the limits set out in the Listing
Manual (applicable under “Scrip Dividend
Schemes”) as revised and updated from
time to time.
As of the Latest Practicable Date, the limits
set out in the Listing Manual on issue price
are as follows:
– Scrip Dividend Schemes (as
applicable to any reinvestment of
distribution arrangement):
• Rule 862(4) – The issue price of
Units allotted pursuant to the
reinvestment of distribution
arrangement must be determined
in accordance with a formula
based on the market price, but
any discount must not exceed
10% of the market price.
Issue price of
new Units
issued other
than by way of
rights issue
offered on a
pro rata basis
to all
Unitholders
Where such an issue is
made at a discount to the
Market Price, the
discount does not exceed
5%.
Removal of existing specific limits and
replaced by the limits set out in the Listing
Manual as revised and updated from time to
time.
As of the Latest Practicable Date, the limits
set out in the Listing Manual on issue price
are as follows:
– Issue of Units other than by way of
rights issue offered on a pro rata basis:
• Rule 811(1) – not more than 10%
discount, unless specific
Unitholders’ approval is obtained
pursuant to Rule 811(3).
3
Relevant
components
of the Unit
issue
structure
Specific limits under
the current Unit issue
structure
Limits set out in the Listing Manual
under the proposed Unit issue
structure
Number of
new Units
issued other
than by way of
rights issue
offered on a
pro rata basis
to all
Unitholders
The issue (together with
any other issue of Units
other than by way of a
rights issue in the same
financial year) must not,
immediately after the
issue, exceed 10% of the
Value3 of Deposited
Property4 provided that
the number of Units
which would be
represented by such
percentage does not
exceed 20% of the total
Units.
Removal of existing specific limits and
replaced by the limits set out in the Listing
Manual as revised and updated from time to
time.
As of the Latest Practicable Date, the limits
set out in the Listing Manual on the number
of new Units to be issued are as follows:
– Issue of Units other than by way of
rights issue offered on a pro rata basis:
• Rule 806(2) – aggregate number
of units shall be not more than
20% of total issued Units
excluding treasury Units.
3 “Value” means except where otherwise expressly stated, means with reference to any Authorised Investment or the
Deposited Property, its value for the time being as determined pursuant to the Trust Deed.
4 “Deposited Property” means all the assets of CIT, including all its Authorised Investments for the time being held or
deemed to be held upon the trusts of the Trust Deed.
4
Relevant
components
of the Unit
issue
structure
Specific limits under
the current Unit issue
structure
Limits set out in the Listing Manual
under the proposed Unit issue
structure
Parties to
whom Units
may be issued
for Units
issued other
than by way of
rights issue
offered on a
pro rata basis
to all
Unitholders
The existing restrictions
provide, inter alia, that
except for an issuance of
Units to the Manager in
payment of its base fee
and/or performance fee,
the following persons
may not participate in an
issue of Units other than
by way of a rights issue
offered on a pro rata
basis:
– the Trustee and/or
its related parties
– the Manager and/or
its related parties
– the directors of the
Trustee, the
directors of
Manager and/or
their immediate
family members,
unless specific
Unitholders’ approval by
Ordinary Resolution5 (at
which certain persons are
to abstain from voting)
has been obtained.
Removal of existing restrictions on
placements of Units to the Manager and/or
its related parties, and the Directors and/or
their immediate family members. Such
persons will be subject to the restrictions
set out in the Listing Manual as revised and
updated from time to time.
As of the Latest Practicable Date, the
Listing Manual restrictions on placements of
Units to certain persons are as follows:
– Issue of Units other than by way of
rights issue:
• Rule 812(1) – an issue must not
be placed to any of the following
persons:
(a) The issuer’s directors and
substantial Unitholders
(b) Immediate family members
of the directors and
substantial Unitholders
(c) Substantial Unitholders,
related companies,
associated companies and
sister companies of the
issuer’s substantial
Unitholders
(d) Corporations in whose
shares the issuer’s directors
and substantial Unitholders
have an aggregate interest
of at least 10%
(e) Any person who, in the
opinion of the SGX-ST, falls
within the abovementioned
categories (a) to (d).
5 “Ordinary Resolution” means a resolution proposed and passed as such by a majority being greater than 50% or more
of the total number of votes cast for and against such resolution at a meeting of Unitholders convened in accordance
with the provisions of the Trust Deed.
5
Relevant
components
of the Unit
issue
structure
Specific limits under
the current Unit issue
structure
Limits set out in the Listing Manual
under the proposed Unit issue
structure
• Rule 812(2) – Rule 812(1) will not
apply if specific Unitholders’
approval for such a placement
has been obtained. The
abovementioned persons, and
their associates (as defined
under the Listing Manual) must
abstain from voting on the
resolution approving the
placement.
• Rule 812(3) – Rule 812(1)(a) will
not apply in certain
circumstances.
• Rule 812(4) – SGX-ST may agree
to a placement to a person in
Rule 812(1)(b), (c) or (d) if it is
satisfied that the person is
independent and is not under the
control or influence of any of the
issuer’s directors or substantial
shareholders.
Level of
Unitholders’
approval
required for
issuance of
Units in
numbers
exceeding the
limit (if any)
set out in any
applicable
laws,
regulations
and the Listing
Rules6
Extraordinary
Resolution7.
Ordinary Resolution unless an
Extraordinary Resolution is required by any
applicable laws, regulations and the Listing
Rules.
Please see paragraph 2 of this Circular and Appendix A for details of the Unit Issue
Supplement.
6 “Listing Rules” means the listing rules for the time being applicable to the listing of CIT as an investment fund on the
SGX-ST as the same may be modified, amended, supplemented, revised or replaced from time to time.
7 “Extraordinary Resolution” means a resolution proposed and passed as such by a majority consisting of 75% or more
of the total number of votes cast for and against such resolution at a meeting of Unitholders convened in accordance
with the provisions of the Trust Deed.
6
(2) The Proposed Development Management Fee Supplement to the Trust Deed
The Manager proposes to supplement the Trust Deed with the Development ManagementFee Supplement for the purpose of facilitating the undertaking of Development Projects8 bythe Manager on behalf of CIT. Under the Development Management Fee Supplement, theManager proposes to charge a Development Management Fee9 of up to 3.0% of the totalproject cost incurred in Development Projects undertaken by CIT subject to the following:
(a) where the estimated total project costs in respect of a Development Project is up toS$50 million, the amount of Development Management Fee to be paid to the Managerin respect of that Development Project shall be reviewed and approved by the ARCC10;
(b) where the estimated total project costs in respect of a Development Project exceedS$50 million, the amount of Development Management Fee to be paid to the Managerin respect of that Development Project shall first be reviewed and approved by theTrustee and the Independent Directors. Where the Trustee and the IndependentDirectors so direct, the Development Management Fee shall be reduced accordingly;
(c) where the market pricing for comparable development management services asdetermined by independent quantity surveyors is materially lower than the DevelopmentManagement Fee, the Manager shall reduce the Development Management Fee tomatch the lower market pricing. To further safeguard Unitholders’ interests, standardoperating procedures for determining the competitiveness of the DevelopmentManagement Fee will also be put in place by the Manager in consultation with theIndependent Directors; and
(d) any increase in the percentage of the Development Management Fee or any change in
the structure of the Development Management Fee shall be approved by an
Extraordinary Resolution.
For the purpose of calculating the Development Management Fee, “total project costs”
means the sum of the construction costs, land costs (where applicable), principal consultants
fees, cost of obtaining all approvals for the Development Project, site staff costs, interest
costs and any other costs which could reasonably be considered to meet the definition of
total project costs and can be capitalised to the Development Project in accordance with
generally accepted accounting principles.
Please see paragraph 3 of this Circular and Appendix B for details of the Development
Management Fee Supplement.
8 “Development Project” means a project involving the development of land, or buildings, or part(s) thereof (including
asset enhancement initiatives) on land which is acquired, held or leased by CIT, provided always that the Property
Funds Appendix shall be complied with for the purposes of such development, but does not include refurbishment,
retrofitting and renovations.
9 “Development Management Fee” means development management fees for Development Projects undertaken and
managed by the Manager on behalf of CIT.
10 “ARCC” means the Audit, Risk Management and Compliance Committee of the Manager.
7
(3) The Proposed Performance Fee Supplement to the Trust Deed
The Manager proposes to supplement the Trust Deed with the Performance Fee
Supplement, with the proposed changes summarised in the table below:
Relevant
components of
the Performance
Fee calculation
formula
Current Performance Fee
calculation formula
Proposed Performance Fee
calculation formula
Closing value of
the Benchmark
Index11 for the
relevant Half Year
Based on the investible (i.e. free
float) market capitalisation
weightings of the securities
comprising the Benchmark Index
recorded on the SGX-ST during
the five Business Days
preceding the last day of the
relevant Half Year (including the
last day of the relevant Half
Year) and the five Business Days
after the last day of the relevant
Half Year (10 Business Days in
total).
Based on the average of the
closing values of the Benchmark
Index for the 10 Business Days
preceding the last day of the
relevant Half Year (including the
last day of the relevant Half
Year).
The closing value of the
Benchmark Index for each
Business Day is based on the
investible (i.e. free float) market
capitalisation weightings of the
securities comprising the
Benchmark Index recorded on
the SGX-ST.
11 “Benchmark Index” means (a) 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 International Limited or
another index provider with similar capabilities; or (b) such other index as may be chosen in accordance with Clause
15 of the Trust Deed.
8
Relevant
components of
the Performance
Fee calculation
formula
Current Performance Fee
calculation formula
Proposed Performance Fee
calculation formula
Closing value of
the Trust Index12
for the relevant
Half Year
Calculated based on the last
Business Day of the relevant
Half Year (i.e. one Business Day
only).
Calculated based on the average
of the closing values of the Trust
Index for the 10 Business Days
preceding the last day of the
relevant Half Year (including the
last day of the relevant Half
Year).
Additionally, if the Manager
believes that the above
calculation does not provide a
fair reflection of the closing value
of the Trust Index for that
Business Day, the closing value
shall be a value as determined
by the Independent Directors
and the Trustee (in consultation
with FTSE International Limited
or another approved index
provider) as being fair closing
value of the Trust Index for that
Business Day, in favour of CIT.
VWAP13 for a Unit
(used to calculate
the equity market
capitalisation of
CIT)
Based on all trades on the
SGX-ST in the ordinary course of
trading during the five Business
Days preceding the last day of
the Half Year and the five
Business Days after the last day
of the relevant Half Year (10
Business Days in total).
Based on all trades on the
SGX-ST in the ordinary course of
trading during the 10 Business
Days preceding the last day of
the Half Year (including the last
day of the relevant Half Year).
Additionally, if the Manager
believes that the above
calculation does not provide fair
reflection of the VWAP of a Unit,
an amount as determined by the
Independent Directors and the
Trustee (after consultation with
an approved stockbroker) as
being the fair VWAP of a Unit in
favour of CIT.
12 “Trust Index” means the performance tracking index for CIT, as calculated by FTSE or another index provider with
similar capabilities, as appointed by the Manager, in consultation with the Trustee. The Trust Index measures the total
return of CIT, combining both capital performance of the security and its reinvested income.
13 “VWAP” means volume weighted average price for that relevant period.
9
Relevant
components of
the Performance
Fee calculation
formula
Current Performance Fee
calculation formula
Proposed Performance Fee
calculation formula
Issue price of the
relevant Units to
be issued to the
Manager as
payment for
Performance
Fees (if any)
The greater of (a) the VWAP for
a Unit for all trades on the
SGX-ST in the ordinary course of
trading during the five Business
Days preceding the last day of
the relevant Half Year (including
the last day of the relevant Half
Year) and the five Business Days
after the last day of the relevant
Half Year (10 Business Days in
total) and (b) Value of the
Deposited Property divided by
the number of Units in
issue/deemed to be in issue at
the end of the Half Year.
The greater of (a) the VWAP for
a Unit for all trades on the
SGX-ST in the ordinary course of
trading during the 10 Business
Days preceding the last day of
the relevant Half Year (including
the last day of the relevant Half
Year), or if the Manager believes
that the above calculation does
not provide fair reflection of the
VWAP of a Unit, an amount as
determined by the Independent
Directors and the Trustee (after
consultation with an approved
stockbroker) as being the fair
VWAP of a Unit and (b) Current
Unit Value14 at the end of the
Half Year.
Note that instances where the values of the Trust Index and the VWAP of a Unit not being
reflective of the fair values or VWAP (as the case may be) are limited to very rare occasions
(such as acts of market manipulation or error trades that might cause an abnormal reflection
of the closing value of the Units).
It is further proposed that the Manager may at its sole discretion waive, partially or fully, its
Performance Fees if the Manager finds the Performance Fee to be overstated, so as to
reflect the impact of the fair market pricing for all closing values relating to the calculation of
the Performance Fees.
Please see paragraph 4 of this Circular and Appendix C for details of the Performance Fee
Supplement.
14 “Current Unit Value” means at any time the Net Asset Value of the Deposited Property at that time divided by the
number of Units in issue and deemed to be in issue at that time.
10
DEFINITIONS
In this Circular, the following definitions shall apply throughout unless the context otherwise
requires or unless otherwise stated:
“ARCC” : The Audit, Risk Management and Compliance Committee of
the Manager
“Authorised Investments” : Has the meaning as defined in the Trust Deed
“Authority” : The Monetary Authority of Singapore
“Base Fee” : The base fee payable to the Manager, determined pursuant to
Clause 15.1.1 of the Trust Deed
“Benchmark Index” : (a) 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
International Limited or another index provider with similar
capabilities; or (b) such other index as may be chosen in
accordance with Clause 15 of the Trust Deed. A link to the
Benchmark Index is available on CIT’s website
“Business Day” : Any day (other than a Saturday, Sunday or gazetted public
holiday) on which commercial banks are generally open for
business in Singapore and the SGX-ST is open for trading
“CDP” : The Central Depository (Pte) Limited
“Circular” : This circular to Unitholders dated 25 March 2013
“CIT” or “Trust” : Cambridge Industrial Trust, a unit trust constituted in the
Republic of Singapore pursuant to a trust deed dated 31
March 2006 (as amended)
“Code” : The Code on Collective Investment Schemes issued by the
Authority, as the same may be modified, amended,
supplemented, revised or replaced from time to time
“Convertible Securities” : Convertible securities (including but not limited to warrants) or
other instruments which may be convertible into Units
“Current Unit Value” : At any time the Net Asset Value of the Deposited Property at
that time divided by the number of Units in issue and deemed
to be in issue at that time
“Deposited Property” All the assets of CIT, including all its Authorised Investments
for the time being held or deemed to be held upon the trusts
of the Trust Deed
“Development
Management Fee”
: Development management fees for Development Projects
undertaken and managed by the Manager on behalf of CIT
11
“Development
Management Fee
Supplement”
: The proposed amendments to the Trust Deed as set out in
Appendix B to this Circular
“Development Project” : A project involving the development of land, or buildings, or
part(s) thereof (including asset enhancement initiatives) on
land which is acquired, held or leased by CIT, provided always
that the Property Funds Appendix shall be complied with for
the purposes of such development, but does not include
refurbishment, retrofitting and renovations
“Directors” : The directors of the Manager
“EGM” : The extraordinary general meeting of Unitholders to be held
on 19 April 2013 at 2.30 p.m. (or as soon thereafter following
the conclusion/adjournment of the Annual General Meeting of
CIT to be held at 2.00 p.m. on the same day and at the same
place), notice of which is set out on page 70 of this Circular
“Extraordinary
Resolution”
: A resolution proposed and passed as such by a majority
consisting of 75% or more of the total number of votes cast for
and against such resolution at a meeting of Unitholders
convened in accordance with the provisions of the Trust Deed
“Half Year” : A period of six months ending 30 June or 31 December in
each year
“IFA” : The independent financial adviser, being Deloitte & Touche
Corporate Finance Pte Ltd
“IFA Letter” : The letter of the IFA as set out in Appendix D to this Circular
“Independent Directors” : The independent directors of the Manager
“Latest Practicable Date” : 15 March 2013, being the latest practicable date prior to the
printing of this Circular
“Liabilities” : All the liabilities of CIT (including liabilities accrued but not yet
paid) and any provision which the Manager decides in
consultation with the auditors of CIT should be taken into
account in determining the liabilities of CIT
“Listing Manual” : The Listing Manual of the SGX-ST, as the same may be
modified, amended, supplemented, revised or replaced from
time to time
“Manager” : Cambridge Industrial Trust Management Limited, solely in its
capacity as manager of CIT
12
“Market Price” : The volume weighted average price for a Unit for all trades on
the SGX-ST in the ordinary course of trading on the SGX-ST
for the period of 10 Business Days immediately preceding the
relevant Business Day or (if the Manager believes that such
calculation does not provide a fair reflection of the market
price of a Unit) an amount as determined by the Manager and
the Trustee (after consultation with a stockbroker approved by
the Trustee), as being the fair market price of a Unit
“Net Asset Value of the
Deposited Property”
: At any time the Value of the Deposited Property, less the
Liabilities
“Ordinary Resolution” : A resolution proposed and passed as such by a majority being
greater than 50% or more of the total number of votes cast for
and against such resolution at a meeting of Unitholders
convened in accordance with the provisions of the Trust Deed
“Performance Fee” : The performance fee payable to the Manager, determined
pursuant to the Trust Deed
“Performance Fee
Supplement”
: The proposed amendments to the Trust Deed as set out in
Appendix C to this Circular
“Preliminary Charge” : A charge upon the issue or sale of a Unit of such amount as
shall from time to time be fixed by the Manager generally or in
relation to any specific or class of transaction provided that it
shall not exceed 5% of the issue price (excluding the
Preliminary Charge) at the time of issue or sale of the Unit;
such expression in the context of a given date shall refer to
the charge or charges fixed by the Manager pursuant to the
Trust Deed and applicable on that date, provided further that
this charge shall not apply while the Units are listed
“Property Funds
Appendix”
: The investment guidelines issued by the Authority regulating
collective investment schemes that invest or propose to invest
in real estate and real estate-related assets in Appendix 6 to
the Code, as the same may be modified, amended,
supplemented, revised or replaced from time to time
“REIT” : Real estate investment trust
“Securities Account” : A securities account maintained by a depositor with CDP but
does not include a securities sub-account maintained with a
depository agent
“SGX-ST” : Singapore Exchange Securities Trading Limited
13
“Trust Deed” : The deed of trust dated 31 March 2006 constituting CIT
entered into between the Manager and the Trustee, as
supplemented and amended by a first supplemental deed
dated 15 August 2007, a second supplemental deed dated 28
January 2009, a third supplemental deed dated 13 November
2009, a fourth supplemental deed dated 27 January 2010, a
fifth supplemental deed dated 22 April 2010 and a sixth
supplemental deed dated 2 February 2012
“Trust Index” : The performance tracking index for CIT, as calculated by
FTSE or another index provider with similar capabilities, as
appointed by the Manager, in consultation with the Trustee.
The Trust Index measures the total return of CIT, combining
both capital performance of the security and its reinvested
income. A link to the Trust Index is available on CIT’s website
“Trustee” : RBC Investor Services Trust Singapore Limited, in its capacity
as trustee of CIT
“Unit” : A unit representing an undivided interest in CIT
“Unit Issue Supplement” : The proposed amendments to the Trust Deed as set out in
Appendix A to this Circular
“Unitholder” : The registered holder for the time being of a Unit, including
persons so registered as joint holders, except where the
registered holder is CDP, the term “Unitholder” shall, in
relation to Units registered in the name of CDP, mean, where
the context requires, the Depositor whose Securities Account
with CDP is credited with Units
“Value” : Except where otherwise expressly stated, means with
reference to any Authorised Investment or the Deposited
Property, its value for the time being as determined pursuant
to the Trust Deed
“VWAP” : Volume weighted average price for that relevant period
“%” : Per centum or percentage
“S$” and “cents” : Singapore dollars and cents, respectively, the lawful currency
of the Republic of Singapore
The terms “depositor”, “depository agent” and “Depository Register” shall have the meanings
ascribed to them respectively in Section 130A of the Companies Act, Chapter 50 of Singapore.
The terms “associate” and “interested person” shall have the meanings ascribed to them
respectively in the Listing Manual.
Words importing the singular shall, where applicable, include the plural and vice versa and words
importing any one gender shall, where applicable, include the other genders where applicable.
References to persons shall, where applicable, include corporations.
14
Any reference to a time of day in this Circular shall be a reference to Singapore time unless
otherwise stated.
Any reference in this Circular to any enactment is a reference to that enactment as for the time
being amended or re-enacted. Any term defined under the Code or the Listing Manual and used
in this Circular shall, where applicable, have the meaning ascribed to it under the Code or the
Listing Manual, as the case may be, unless otherwise provided. Summaries of the provisions of
any laws and regulations (including the Code and the Listing Manual) contained in this Circular are
of such laws and regulations (including the Code and the Listing Manual) as at the Latest
Practicable Date.
Any discrepancies in the tables in this Circular between the listed amounts and the totals thereof
are due to rounding.
15
CAMBRIDGE INDUSTRIAL TRUST(A unit trust constituted in the Republic of Singapore
pursuant to a trust deed dated 31 March 2006 (as amended))
Directors of the Manager: Registered Office:
Dr Chua Yong Hai (Independent Chairman) 61 Robinson Road
#12-01
Robinson Centre
Singapore 068893
Professor Ong Seow Eng (Independent Director, Chairman of Audit,
Risk Management and Compliance
Committee)
Mr Tan Guong Ching (Independent Director, Member of Audit,
Risk Management and Compliance
Committee)
Mr Ooi Eng Peng (Independent Director, Member of Audit,
Risk Management and Compliance
Committee)
Mr Michael Patrick Dwyer (Non-Executive Director, Member of Audit,
Risk Management and Compliance
Committee)
Mr Victor Ong Wei Tak (Alternate Director to Mr Michael Patrick
Dwyer)
Mr Masaki Kurita (Non-Executive Director)
Mr Ian Andrew Smith (Non-Executive Director)
Mr Lee Stuart Neibart (Non-Executive Director)
Mr Christopher Dale
Calvert
(Executive Director and Chief Executive
Officer)
25 March 2013
To: Unitholders of Cambridge Industrial Trust
Dear Sir/Madam
1. INTRODUCTION
1.1 Summary of Approvals Sought
The Manager is seeking approval from Unitholders on each of the following resolutions,
which shall be proposed as Extraordinary Resolutions at the EGM:
(a) the proposed Unit Issue Supplement to the Trust Deed;
(b) the proposed Development Management Fee Supplement to the Trust Deed; and
(c) the proposed Performance Fee Supplement to the Trust Deed,
as further explained in paragraphs 2, 3 and 4 respectively below.
The SGX-ST assumes no responsibility for the correctness of any of the statements made,
reports contained or opinions expressed in this Circular.
16
1.2 Supplemental Deed
Unitholders’ approval is being sought for the above resolutions as the Manager is proposing
to amend the Trust Deed. Subject to approval from the Unitholders in respect of all or any of
the resolutions set out in the notice of the EGM, the Manager intends to enter into a
supplemental deed with the Trustee to amend the Trust Deed and also to take this
opportunity to streamline and rationalise certain other provisions in the Trust Deed.
2. THE PROPOSED UNIT ISSUE SUPPLEMENT TO THE TRUST DEED
2.1 The Unit Issue Supplement
The Trust Deed currently provides, among others, that for so long as CIT is listed, without
prior approval of Unitholders:
(a) the issue price of a Unit for a rights issue offered on a pro rata basis to all Unitholders
must not be less than 50% (or such other percentage as may be permitted by, inter alia,
the SGX-ST) of the prevailing Market Price;
(b) the issue price of a Unit for any reinvestment of distribution arrangement must not be
less than 90% of the prevailing Market Price;
(c) new Units may be issued other than by way of a rights issue offered on a pro rata basis
to all Unitholders provided that:
(i) the issue (together with any other issue of Units other than by way of a rights issue
offered on a pro rata basis to all Unitholders in the same financial year) would not,
immediately after the issue, exceed 10% of the Value of the Deposited Property
provided that the number of Units which would be represented by such percentage
does not exceed 20% of the total Units; and
(ii) where such an issue is made at a discount to the market price, the discount does
not exceed 5%; and
(d) except in the case of an issue of Units to the Manager in payment of the Manager’s base
fee and/or Performance Fee:
(i) the Trustee and/or its related parties;
(ii) the Manager and/or its related parties; and
(iii) the directors of the Trustee, the Directors and/or their immediate family members,
may not participate in the issue of Units other than by way of a rights issue offered on
a pro rata basis to all existing Unitholders.
In addition, the Trust Deed also provides that where specific approval of Unitholders is
required in respect of the issue of Units in certain circumstance (such as where the
thresholds under paragraph 2.1(c) above are exceeded), the Manager is required to obtain
Unitholders’ approval by way of an Extraordinary Resolution instead of an Ordinary
Resolution.
17
In connection with the above, the Manager proposes to supplement the Trust Deed with the
Unit Issue Supplement by:
(A) removing the existing specific limits on the issue price of a Unit offered by way of a pro
rata rights issue, a distribution reinvestment plan or otherwise and instead requiring the
Manager to comply with the Listing Manual as revised and updated from time to time,
when determining the issue price of a Unit;
(B) removing the provisions which restrict the number of Units, which may be issued without
Unitholders’ approval, to 10% of the Value of the Deposited Property and the
corresponding discount, if any, to 5% of the market price of a Unit. The Manager will
instead be required to comply with the Listing Manual which sets out when specific
Unitholders’ approval is required for an issue of new Units and/or Convertible
Securities;
(C) removing the provisions which restrict the issue of Units to the Manager and/or its
related parties, and the Directors and/or their immediate family members. The Manager
will instead be required to comply with the Listing Manual which sets out when
placements of Units may be made to certain restricted placees; and
(D) removing the provisions which require specific approval of Unitholders in respect of an
issue of Units to be by way of an Extraordinary Resolution.
For so long as CIT is listed, the Manager will comply with any applicable laws, regulations
and the rules of the SGX-ST for the time being applicable in relation to issuances of Units.
For the avoidance of doubt, the current provisions in the Trust Deed restricting the issue of
Units to the Trustee and/or its related parties and the directors of the Trustee and/or their
immediate family members remain unchanged.
In the event that CIT is delisted, Clause 5.4 of the Trust Deed currently provides, inter alia,
that the Manager may issue Units at an issue price equal to the Current Unit Value on the
date of the issue of the Unit plus, if so determined by the Manager, an amount equal to the
Preliminary Charge and an amount to adjust the resultant total upwards to the nearest whole
cent. The Preliminary Charge shall be retained by the Manager for its own benefit and the
amount of the adjustment shall be retained as part of the Deposited Property. There are no
proposed amendments to Clause 5.4 of the Trust Deed.
2.2 Rationale for the Unit Issue Supplement
The Manager proposes to supplement the Trust Deed with the Unit Issue Supplement to
provide the Manager with the flexibility to, among others:
(a) determine the issue price for new Units offered by way of a pro rata rights issue or
otherwise so long as such issue price complies with the Listing Manual;
(b) determine the number of new Units issued by way of a pro rata rights issue or otherwise
so long as such issuance of new Units complies with the Listing Manual; and
(c) obtain Unitholders’ approval for the issue of Units, where such approval is required by
way of an Extraordinary Resolution, by way of an Ordinary Resolution instead.
The Manager is of the view that the proposed amendments are consistent with the industry’s
best practices and will also serve to align the provisions of the Trust Deed to the Listing
Manual. This is intended to enable CIT to raise funds in a prompt and efficient manner and
to better handle its capital requirements, as well as to avoid any potentially confusing
situations where the requirements under the Trust Deed and the Listing Manual differ.
Please see Appendix A for details of the Unit Issue Supplement.
18
3. THE PROPOSED DEVELOPMENT MANAGEMENT FEE SUPPLEMENT TO THE TRUST
DEED
3.1 The Development Management Fee Supplement
The Manager proposes to supplement the Trust Deed with the Development Management
Fee Supplement for the purpose of facilitating the undertaking of Development Projects by
the Manager on behalf of CIT. In this regard, the Manager proposes to charge a Development
Management Fee of up to 3.0% of the total project cost incurred in Development Projects
undertaken by CIT subject to the following:
(a) where the estimated total project costs in respect of a Development Project is up to
S$50 million, the amount of Development Management Fee to be paid to the Manager
in respect of that Development Project shall be reviewed and approved by the ARCC;
(b) where the estimated total project costs in respect of a Development Project exceed
S$50 million, the amount of Development Management Fee to be paid to the Manager
in respect of that Development Project shall first be reviewed and approved by the
Trustee and the Independent Directors. Where the Trustee and the Independent
Directors so direct, the Development Management Fee shall be reduced accordingly;
(c) where the market pricing for comparable development management services as
determined by independent quantity surveyors is materially lower than the Development
Management Fee, the Manager shall reduce the Development Management Fee to
match the lower market pricing. To further safeguard Unitholders’ interests, standard
operating procedures for determining the competitiveness of the Development
Management Fee will also be put in place by the Manager in consultation with the
Independent Directors; and
(d) any increase in the percentage of the Development Management Fee or any change in
the structure of the Development Management Fee shall be approved by an
Extraordinary Resolution.
For the purpose of calculating the Development Management Fee, “total project costs”
means the sum of the construction costs, land costs (where applicable)15, principal
consultants fees, cost of obtaining all approvals for the Development Project, site staff costs,
interest costs and any other costs which could reasonably be considered to meet the
definition of total project costs and can be capitalised to the Development Project in
accordance with generally accepted accounting principles.
The Development Management Fee will only be payable in respect of Development Projects
actually undertaken by the Trust. As such, the Manager will not charge a Development
Management Fee for sourcing and conducting feasibility studies on development
opportunities which do not eventually materialise into Development Projects.
The Development Management Fee will be paid to the Manager in cash 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, in the event
of any overpayment or underpayment, a final adjustment of the balance when the total
project costs are finalised. If the total project costs have been over-estimated, a refund of the
excess Development Management Fee will be made by the Manager to CIT.
15 For redevelopment of existing properties, land cost refers to all costs associated with land such as any payment of
additional premium or amounts to the regulatory authorities in connection with the redevelopment, but does not
include the value of the land. For avoidance of doubt, there will be no land cost component for land which has been
allocated at no cost to CIT for built-to-suit developments.
19
For any development management services provided by any third party service providers in
connection with a Development Project, any payment to such third party service providers
shall be borne by the Manager, and not additionally out of the Trust. CIT shall bear all
applicable goods and services tax and all other applicable sales tax, governmental
impositions, duties and levies whatsoever imposed on the Development Management Fee by
the relevant authorities in Singapore or elsewhere.
Please see Appendix B for details of the Development Management Fee Supplement.
3.2 Responsibility of Manager as Development Manager
As development manager, the Manager shall be responsible for providing development
management services such as:
(a) sourcing for and conducting feasibility studies on development opportunities and
coordinating with consultants to perform technical due diligence;
(b) overall responsibility for the planning, control and monitoring of the progress of the
Development Project from conception to completion to ensure that the Development
Project is completed within the stipulated time and budget and to the stipulated quality;
(c) working closely with and overseeing the appointed project manager16, architect and
consultants to carry out relevant value engineering to ensure a cost-efficient building;
(d) reporting to the Trustee on a regular basis, in particular, on the cost and progress of the
Development Project;
(e) representing the Trustee in all site meetings during the construction period, and to
advise on any variation works and (where applicable) make appropriate
recommendations to the Trustee for consideration;
(f) establishing the prospective tenant’s real estate requirements, make site selection,
negotiate with government authorities on land allocation and conditions;
(g) providing value-added inputs on the concept and schematic plans by engaging the
Trustee’s service providers, namely property managers and marketers and involving the
Manager’s asset managers to ensure an efficient, functional and marketable end
product;
(h) liaising with the prospective tenant for acceptance of concept and schematic plans and
building specifications;
(i) establishing and ensuring agreement with the prospective tenant on the overall
milestones for the delivery of the Development Project; and
(j) finalising with the prospective tenant the architectural schematic plans/specifications
for use as the basis for calling of tender(s).
16 The role of the project manager is distinct from that of the development manager and includes the preparation of
tender documents, evaluating tender submissions, programme management and scheduling, contract administration
and regular reporting of cost, time, quality and project concerns to the development manager.
20
3.3 Rationale for the Development Management Fee Supplement
The Manager intends to complement its existing strategy of organic growth and acquisition
growth by undertaking development activities, subject to the limit imposed by the Property
Funds Appendix (i.e. the total contract value of the property development activities
undertaken and investments in uncompleted property developments at any one time, is
limited to 10% of the Deposited Property).
In this connection, the Manager proposes to amend the Trust Deed with the Development
Management Fee Supplement for the following reasons:
(a) the Manager believes that having a development strategy is beneficial to Unitholders as
Development Projects can potentially provide greater returns compared to outright
acquisitions of income-producing properties and thus may improve the net asset value
of CIT’s portfolio and enhance distributions to Unitholders.
Table 3.3(a) below shows three recently completed Development Projects and the only
Development Project currently in progress undertaken by CIT. No Development
Management Fees are payable to the Manager for these projects. For illustration
purposes, the table shows the gross yield on cost for each project, where no
Development Management Fee was paid, as well as on the assumption that a
Development Management Fee of 3.0% is payable.
The development cost of a property is usually lower than an outright acquisition due to
the absence of developer’s profit which is payable to the developer as part of the
purchase price in an outright acquisition. Hence, CIT may benefit from a larger
unrealised valuation gain (if there is an uplift of valuation in the property after
development) than an outright acquisition and this may in turn result in an improvement
in the net asset value of CIT. In turn, this may result in an uplift in CIT’s unit price as a
consequence of CIT’s underlying asset value increasing.
Unitholders may receive a savings benefit if the total construction cost is lower than the
cost of acquiring the properties at completion from a developer, assuming that the price
paid to the developer for these properties was the valuation amount. In addition, the
gross yield on cost is likely to be higher than the gross yield on the valuation amount,
which would potentially result in increased distributions to Unitholders;
21
Table 3.3(a) − CIT’s Development Projects
Project
Description
Completed
On
Total Project
Cost
(excluding
Development
Management
Fee)
(S$ million)
Valuation
as at
31 December
2012
(S$ million)
Capital Value
Appreciation
(S$ million)
Gross
Yield on
Cost
(%)
Development
Management
Fee (for
illustrative
purposes
only)
(S$ million)
Gross Yield
on Cost
(assuming a
Development
Management
Fee is
payable)
(%)
43 Tuas View
Circuit
3Q2012 13.5 14.7 1.2 9.5 0.4 9.2
70 Seletar
Aerospace
4Q2012 8.6 8.8 0.2 10.8 0.3 10.5
30 Toh Guan
Road
4Q2012 8.1 9.6 1.5 10.4 0.2 10.1
88 International
Road
Targeted
2Q2013
23.4(1)(2) 28.2(2) 4.8 7.7 0.5 7.5
(1) Consists of initial building carrying value of S$6.6 million and an estimated total project cost of S$16.8 million for
full completion of the project.
(2) Estimated cost/valuation based on full completion of project.
(b) unlike outright acquisitions of completed income-producing properties, the process of
property development is more complex as it requires a longer “gestation” period and
involves the management and supervision of significant construction activity. The
“gestation” period (i.e. from the time taken between identification of development
opportunities and the confirmation of a deal) may take up to a year and sometimes
longer. From confirmation of a deal to the completion of the construction of the
Development Project, the development management process typically takes 18 to 30
months depending on the size of the Development Project. In contrast, the time frame
for outright acquisitions may be as short as three to four months from the initial
inspection until the completion of the acquisition;
(c) development management usually involves more extensive liaisons with external
parties such as architects, engineers and the relevant authorities. The amount of
services rendered for a Development Project is significantly more than the amount of
services rendered for an acquisition; and
(d) not all development opportunities may result in confirmed Development Projects. Any
costs incurred during the period when the Manager identifies a development opportunity
to the time when confirmation of the Development Project is sought (i.e. the pre-
construction phase) will be borne by the Manager, if such confirmation of the
Development Project is not subsequently obtained.
The Manager has in-house project and property development capabilities. The team is led by
Mr Michael Long, an experienced development manager with over 20 years of experience in
the real estate development and construction industries in, among others, the large-scale
industrial, residential and commercial sectors. During his career in project development and
construction, Mr Michael Long has successfully delivered premium quality developments
working as a Senior Project Manager for Confluence Project Management in Singapore and
Bovis Lend Lease in Singapore, London and Sydney. He holds a Clerk of Works, Building
Diploma from Sydney TAFE and is an active member of the Project Managers Institute of
Australia.
22
CIT will only undertake developments on a selective basis to ensure they are value
enhancing to the existing portfolio. For example, the Manager believes that development
activities such as built-to-suit developments could be undertaken to cater to a prospective
tenant’s operational requirements and specifications. Such developments may generate long
term master leases to enable CIT to extend its lease expiry profile.
In carrying out development activities, the Manager will consider, among other things,
development and construction risks, as well as the overall benefits to Unitholders and the
tenants.
3.4 Application of the Development Management Fee
Subject to approval by Unitholders for the Development Management Fee Supplement, the
Development Management Fee will be chargeable in respect of all current and future
Development Projects of CIT managed by the Manager. In respect of current Development
Projects, the Development Management Fee will be charged with effect from the date of
amendment to the Trust Deed (assuming Unitholders’ approval is obtained at the EGM) on
a pro rata basis over the remaining construction period of such projects. However, in respect
of the current Development Project at 88 International Road, the Manager has agreed to
waive the Development Management Fee because the project is nearing completion. Save
for the abovementioned project at 88 International Road, there are no other current projects
undergoing development as of the Latest Practicable Date.
No acquisition fees and other additional fees will be paid to the Manager for development
management services which are rendered for Development Projects if the Manager receives
the Development Management Fee. For instance, if CIT invests in real estate to be built on
vacant land that has been approved for development or other uncompleted property
developments, CIT will pay to the Manager a Development Management Fee for the
Development Project. CIT will not have to pay to the Manager an acquisition fee in respect
of its investment in the Development Project.
A Development Management Fee is chargeable for redevelopment of an existing property.
However, the Manager will not receive a Development Management Fee for activities
involving refurbishment, retrofitting and renovations.
3.5 Applicability of Rules Relating to Interested Person Transactions and Interested Party
Transactions
Under Chapter 9 of the Listing Manual, where CIT proposes to enter into a transaction with
an interested person and the value of the transaction (either in itself or when aggregated with
the value of other transactions, each a value equal to or greater than S$100,000, with the
same interested person during the same financial year) is equal to or exceeds 5% of the
latest audited net tangible assets of CIT and its subsidiaries, Unitholders’ approval is
required in respect of the transaction.
Paragraph 5 of the Property Funds Appendix also imposes a requirement for Unitholders’
approval for an interested party transaction by CIT which value is equal to or exceeds 5% of
CIT’s net asset value.
As the Manager is an interested person of CIT under the Listing Manual and an interested
party of CIT under the Property Funds Appendix, the proposed Development Management
Fee Supplement is an interested person transaction under the Listing Manual and an
interested party transaction under the Property Funds Appendix.
23
Although the Development Management Fee together with the Performance Fee is unlikely
to exceed 5% of CIT’s latest audited net tangible assets or net asset value in any given
financial year, the Manager is nonetheless seeking Unitholders’ approval for the
Development Management Fee Supplement as a matter of good corporate governance
practice. Further, should such approval be obtained, the payment of Development
Management Fees to the Manager in accordance with the Development Management Fee
Supplement shall not be subject to aggregation or further Unitholders’ approval requirements
under Rules 905 and 906 of the Listing Manual and under paragraph 5 of the Property Funds
Appendix, to the extent that there is no subsequent increase in the rates of, or change in the
structure of, the Development Management Fee.
As the quantum of any Development Management Fees payable to the Manager will be
determined based on the total costs incurred in the Development Projects undertaken by the
Manager on behalf of CIT, the Manager will disclose the aggregate Development
Management Fees paid to the Manager during the financial year in CIT’s annual report each
year.
Details of interested person transactions and interested party transactions entered into by
CIT for the financial year ended 31 December 2012 and for the current financial year are set
out in Appendix E to the Circular.
3.6 Advice of the Independent Financial Adviser
The IFA has been appointed to advise the Independent Directors in relation to the proposed
Development Management Fee Supplement.
Having considered the terms of reference, the principal terms of the proposed Development
Management Fee Supplement, evaluation of the proposed Development Management Fee
Supplement and the assumptions set out in the IFA Letter, and subject to the qualifications
set out therein, the IFA is of the opinion that the proposed Development Management Fee
Supplement is on normal commercial terms and not prejudicial to CIT and its Unitholders who
are not interested persons.
The IFA has therefore advised the Independent Directors to recommend that Unitholders
vote in favour of the Development Management Fee Supplement.
The IFA Letter, containing its advice in full, is set out in Appendix D of this Circular.
4. THE PROPOSED PERFORMANCE FEE SUPPLEMENT TO THE TRUST DEED
4.1 The Performance Fee Supplement
The Manager earns a performance fee if the total return (combining both capital performance
of a Unit and its reinvested income) of the Trust Index outperforms the total return of the
Benchmark Index, currently consisting of the eight largest REITs in Singapore. The
Performance Fee is calculated in two tiers based on a fixed percentage of the
outperformance multiplied by the equity market capitalisation of CIT. The Manager may opt
to receive the Performance Fees in Units or cash or a combination thereof. Unitholders may
refer to Appendix C of this Circular for an understanding of how the Performance Fee is
calculated.
24
The Trust Deed currently provides, amongst others, that for the purposes of calculating the
Performance Fee of the Manager (if any) in respect of a Half Year:
(a) the closing value of the Benchmark Index for the relevant Half Year will be based on the
investible (i.e. free float) market capitalisation weightings of the securities comprising
the Benchmark Index recorded on the SGX-ST (or other exchange on which such
securities are quoted) during the five Business Days preceding the last day of the
relevant Half Year (including the last day of the relevant Half Year) and the five Business
Days after the last day of the relevant Half Year (10 Business Days in total);
(b) the Trust Index will be calculated in accordance with the index provider’s standard
practices in relation to index calculation;
(c) the VWAP for a Unit used to calculate the market capitalisation of CIT shall be based
on all trades on the SGX-ST in the ordinary course of trading during the five Business
Days preceding the last day of the Half Year (including the last day of the relevant Half
Year) and the five Business Days after the last day of the relevant Half Year (10
Business Days in total); and
(d) where the whole or part of the Performance Fee is to be paid in the form of Units, the
issue price of the Units to be issued, shall be the greater of (i) the VWAP for a Unit for
all trades on the SGX-ST in the ordinary course of trading during the five Business Days
preceding the last day of the relevant Half Year (including the last day of the relevant
Half Year) and the five Business Days after the last day of the relevant Half Year (10
Business Days in total) and (ii) the Value of the Deposited Property divided by the
number of Units in issue or deemed to be in issue at the end of the Half Year. The
number of Units to be issued will thereafter be determined based on the issue price of
the Units to be issued.
Issue of Units at Market Price
For so long as CIT is listed, the Manager may, subject to the provisions of the Listing Manual
and the Trust Deed, issue further Units on any Business Day at the Market Price. Market
Price is defined in Clause 5.3.1 of the Trust Deed as follows:
“(i) the volume weighted average price for a Unit (if applicable, of the same Class) for all
trades on the SGX-ST, or such other Recognised Stock Exchange on which the Trust is
listed, in the ordinary course of trading on the SGX-ST or, as the case may be, such
other Recognised Stock Exchange, for the period of 10 Business Days (or such other
period as may be prescribed by the SGX-ST or relevant Recognised Stock Exchange)
immediately preceding the relevant Business Day; or
(ii) if the Manager believes that the calculation in Clause 5.3.1(i) does not provide a fair
reflection of the market price of a Unit, an amount as determined by the Manager and
the Trustee (after consultation with a Stockbroker approved by the Trustee), as being
the fair market price of a Unit.”
This residual ability of the Manager to investigate whether the VWAP is a fair reflection of the
market price for a Unit and if not, to determine an amount (after consultation with a
stockbroker approved by the Trustee), as being the fair market price of a Unit has been
termed as a “recourse option” by some professionals in the REIT industry. Such a “recourse
option” is a common provision in the trust deeds of most REITs in Singapore (please refer to
section 6.3 of the IFA Letter).
25
Differences between issue price of Units for payment of Base Fee and Performance Fee
The management fees payable to the Manager comprise the Base Fee and Performance
Fee. There are some differences between the applicable provisions in the Trust Deed for
payment of Base Fee and Performance Fee to the Manager.
First, the issue price of Units for payment of Base Fee is taken with reference to Clause 5.3.1
of the Trust Deed (please refer to the extract reproduced above). However, the issue price
of Units for payment of Performance Fee is taken with reference to Clause 15.1.2(iv) of the
Trust Deed (please refer to Appendix C of this Circular). The latter contains a “greater of”
provision while the former does not. Next, the issue price of Units for payment of Base Fee
takes reference from the “relevant Business Day”, while the issue price of Units for payment
of Performance Fee takes reference from the end of the Half Year. Finally, the issue price of
Units for payment of Base Fee contains a “recourse option” pursuant to which the Manager
and the Trustee may determine the fair market price of a Unit. On the other hand, the issue
price of Units for payment of Performance Fee currently does not contain any “recourse
option”. As explained further below, the Manager is proposing that a “recourse option” be
introduced for the latter, with the Independent Directors and the Trustee to be given the
ability to determine the fair market price of a Unit.
In connection with the above, the Manager proposes to supplement the Trust Deed with the
Performance Fee Supplement by providing that, for the purposes of calculating its
Performance Fee (if any) in respect of a Half Year:
(1) the calculations for the values of the Benchmark Index and the Trust Index, as at the
close of the Half Year, shall be aligned and based on the average of the closing values
of the Benchmark Index or, as the case may be, the Trust Index, for the 10 Business
Days preceding the last day of the relevant Half Year (including the last day of the
relevant Half Year). If the Manager believes that the foregoing calculation for the Trust
Index does not provide a fair reflection of the closing value of the Trust Index for that
Business Day, the closing value shall be a value as determined by the Independent
Directors and the Trustee (after consultation with FTSE International Limited or another
index provider approved by the Manager and Trustee), as being the fair closing value
of the Trust Index for that Business Day in favour of CIT. The closing value of the
Benchmark Index for each Business Day will be based on the investible (i.e. free float)
market capitalisation weightings of the securities comprising the Benchmark Index
recorded on the SGX-ST (or other exchange on which such securities are quoted);
(2) the VWAP for a Unit used to calculate the market capitalisation of CIT shall be based
on all trades on the SGX-ST in the ordinary course of trading during the 10 Business
Days preceding the last day of the Half Year (including the last day of the relevant Half
Year), or if the Manager believes that the foregoing calculation does not provide a fair
reflection of the VWAP of a Unit, an amount as determined by the Independent Directors
and the Trustee (after consultation with a stockbroker approved by the Trustee), as
being the fair VWAP of a Unit in favour of CIT; and
(3) where the whole or part of the Performance Fee is to be paid in the form of Units, the
issue price of the Units to be issued shall be the greater of (A) the VWAP for a Unit for
all trades on the SGX-ST in the ordinary course of trading during the 10 Business Days
preceding the last day of the relevant Half Year (including the last day of the relevant
Half Year), or if the Manager believes that the foregoing calculation does not provide a
fair reflection of the VWAP of a Unit, an amount as determined by the Independent
Directors and the Trustee (after consultation with a stockbroker approved by the
26
Trustee), as being the fair VWAP of a Unit and (B) the Current Unit Value, at the end of
the Half Year. The number of Units to be issued will thereafter be determined based on
the issue price of the Units to be issued.
Note that instances where the values of the Trust Index and the VWAP of a Unit not being
reflective of the fair values or VWAP (as the case may be) are limited to very rare occasions
(such as acts of market manipulation or error trades that might cause an abnormal reflection
of the closing value of the Units).
It is further proposed that the Manager may at its sole discretion waive, partially or fully, its
Performance Fees if the Manager finds the Performance Fee to be overstated, so as to
reflect the impact of the fair market pricing for all closing values relating to the calculation of
the Performance Fees.
4.2 Rationale for the Proposed Performance Fee Supplement
(a) Alignment of Benchmark Index and Trust Index
The Manager wishes to align the calculations of the Benchmark Index and the Trust
Index to make them less susceptible to erratic market fluctuations and consistent with
each other. Currently, the closing value of the Benchmark Index for the Half Year is
based on an average of 10 Business Days, whereas the closing value of the Trust Index
is based on one Business Day only.
The Manager is therefore proposing the Performance Fee Supplement to provide that
the closing value of the Trust Index for the relevant Half Year shall be calculated based
on the average of the closing values of the Trust Index for the 10 Business Days
preceding the last day of the relevant Half Year (including the last day of the relevant
Half Year). The Manager believes that the Trust Index calculated based on the
10-Business Day average is more representative of the Trust Index as at the close of
a Half Year, as it will not be wholly dependent on the closing price of the Units as at the
last Business Day of a Half Year, and is consistent with the calculation of the Benchmark
Index.
In addition, the closing value of the Benchmark Index for the relevant Half Year is
currently calculated based on the average of the Benchmark Index values for 10
Business Days being the five Business Days preceding the last day of the relevant Half
Year (including the last day of the relevant Half Year) and the five Business Days after
the last day of the relevant Half Year. The Manager is therefore also proposing to align
the period for the calculations of the closing value of the Benchmark Index with that of
the proposed calculation period of the closing value of the Trust Index, for the relevant
Half Year for consistency. In addition, the Manager is of the view that the proposed
reference period of 10 Business Days preceding the last day of the relevant Half Year
(including the last day of the relevant Half Year), is more appropriate and relevant as
such reference period will fall within the Half Year which the Performance Fee is being
computed for, and also appears to be more common amongst REITs.
By adjusting the calculation methods, the Manager believes that the performance
measurements will be more consistent and the Trust Index will be less susceptible to
erratic market fluctuations. The current calculation of the Trust Index, which is based on
one Business Day only, will be subject to the impact of market price fluctuations for that
day. Hence, the proposed calculation of the Trust Index, which is based on the
10-Business Day average, aims to reduce the impact of market price fluctuations of any
particular day during the period through averaging.
27
The amendment to the calculation for market capitalisation is also for the purposes of
consistency with the proposed amendments to the calculations for the Benchmark Index
and Trust Index.
(b) Proposed inclusion of “recourse options” for calculation of Performance Fee and
Manager’s discretion to waive Performance Fees payable
There may be rare occasions where the values of the Trust Index and the VWAP of a
Unit are not fairly reflective of the values of the Trust Index or VWAP (as the case may
be) due to acts of market manipulation or error trades and this impacts the computation
of the Performance Fee.
Hence, the Manager believes that it is desirable to introduce “recourse options” for the
calculation of the Performance Fee such that if the Manager believes that the
calculation does not provide a fair reflection of the closing value of the Trust Index or
the VWAP of a Unit (as the case may be), the Independent Directors and the Trustee
may, after consultation with the index provider or a stockbroker (as the case may be),
determine a value or amount, in favour of CIT, as being the fair closing value of the Trust
Index or the fair VWAP of a Unit (as the case may be). The index provider or the
stockbroker (as the case may be) will recommend a fair value, which the Independent
Directors and the Trustee will consider when determining the fair closing value of the
Trust Index or the fair VWAP of a Unit (as the case may be). This is to ensure that the
quantum of the Manager’s Performance Fee is fairly and reasonably determined in the
interests of CIT and ultimately, the Unitholders.
Currently, the provisions of the Trust Deed relating to the calculation of the Performance
Fee payable to the Manager do not contain any “recourse options”.
The Manager is of the opinion that instances where the values of the Trust Index and
the VWAP of a Unit not being reflective of the fair values or VWAP (as the case may be)
are limited to very rare occasions (such as acts of market manipulation or error trades
that might cause an abnormal reflection of the closing value of the Units). Accordingly,
the “recourse options” are expected to be applicable only in very limited situations.
The Manager will only use the “recourse options” if it believes that the daily value
of the Trust Index or the VWAP of a Unit for the reference period are higher than
the fair closing values of the Trust Index and VWAP. Therefore, the Manager will
only use the “recourse options” to adjust the quantum of the Performance Fee
lower and not higher, such that the adjustments will only be made in the interests
of CIT and ultimately, the Unitholders.
The Manager may at its sole discretion waive, partially or fully, its Performance Fees if
the Manager finds the Performance Fee to be overstated, so as to reflect the impact of
the fair market pricing for all closing values relating to the calculation of the
Performance Fees.
(c) Issue price formula for Performance Fee to be paid in Units
The amendment to the calculation of the issue price of the Units to be issued where the
whole or part of the Performance Fee is to be paid in the form of Units is for the purpose
of alignment with best practices and consistency with other REITs in Singapore. In this
regard, the Manager is proposing to substitute the current reference to the “Value of the
Deposited Property” per Unit with a reference to the “Current Unit Value” instead. The
former definition is based on the total assets of CIT while the latter definition is based
on the net asset value of CIT. The Manager is of the view that under the current mode
28
of computation, it is unlikely for the Manager to elect to receive its Performance Fee in
Units. By way of illustration, under the current computation method, if the Manager
elects to receive its Performance Fee in Units, the Units will be issued to the Manager
based on the higher of the VWAP for a Unit (being approximately S$0.672, as at 31
December 2012) and the Value of the Deposited Property per Unit (being approximately
S$1.073, based on the reported financial statements of CIT for the financial year ended
31 December 2012). Under such a situation, the Manager will not elect to receive its
Performance Fee in Units as it will be paying a substantial premium over what it would
have paid had it purchased Units directly from the market instead.
If the proposed amendment is approved by Unitholders at the EGM, the computation will
then be based on the higher of the VWAP for a Unit (being approximately S$0.672, as
at 31 December 2012) and the Current Unit Value (being approximately S$0.647, based
on the reported financial statements of CIT for the financial year ended 31 December
2012). Under such a situation, the Manager will be more likely to elect to receive its
Performance Fee in Units as the issue price of such Units will more accurately reflect
the prevailing market price. At the same time, Unitholders’ interests are still protected
as the Manager will not enjoy any discount to the current traded price of a Unit.
Furthermore, the Manager is of the view that it is beneficial for Unitholders if the
Manager were to receive its Performance Fees in Units for the following reasons: (a) it
would not decrease the amount of cash that CIT has for distribution or reinvestment
purposes; (b) the cash retained could be used as part of CIT’s working capital; and (c)
it would align the interests of the Manager and Unitholders.
Please see Appendix C for details of the Performance Fee Supplement.
4.3 Applicability of Rules Relating to Interested Person Transactions and Interested Party
Transactions
Under Chapter 9 of the Listing Manual, where CIT proposes to enter into a transaction with
an interested person and the value of the transaction (either in itself or when aggregated with
the value of other transactions, each a value equal to or greater than S$100,000, with the
same interested person during the same financial year) is equal to or exceeds 5% of the
latest audited net tangible assets of CIT and its subsidiaries, Unitholders’ approval is
required in respect of the transaction.
Paragraph 5 of the Property Funds Appendix also imposes a requirement for Unitholders’
approval for an interested party transaction by CIT which value is equal to or exceeds 5% of
CIT’s net asset value.
As the Manager is an interested person of CIT under the Listing Manual and an interested
party of CIT under the Property Funds Appendix, the proposed Performance Fee Supplement
is an interested person transaction under the Listing Manual and an interested party
transaction under the Property Funds Appendix.
Although the Performance Fee together with the Development Management Fee is unlikely
to exceed 5% of CIT’s latest audited net tangible assets or net asset value in any given
financial year, the Manager is nonetheless seeking Unitholders’ approval for the
Performance Fee Supplement as a matter of good corporate governance practice. Further,
should such approval be obtained, the payment of Performance Fees to the Manager in
accordance with the Performance Fee Supplement shall not be subject to aggregation or
further Unitholders’ approval requirements under Rules 905 and 906 of the Listing Manual
and under paragraph 5 of the Property Funds Appendix, to the extent that there is no
subsequent increase in the rates of, or change in the structure of, the Performance Fee.
29
The Manager will disclose the aggregate Performance Fees paid to the Manager during the
financial year in CIT’s annual report each year.
Details of interested person transactions and interested party transactions entered into by
CIT for the financial year ended 31 December 2012 and for the current financial year are set
out in Appendix E to the Circular.
4.4 Advice of the Independent Financial Adviser
The IFA has been appointed to advise the Independent Directors in relation to the proposed
Performance Fee Supplement.
Having considered the terms of reference, the principal terms of the proposed Performance
Fee Supplement, evaluation of the proposed Performance Fee Supplement and the
assumptions set out in the IFA Letter, and subject to the qualifications set out therein, the IFA
is of the opinion that the proposed Performance Fee Supplement is on normal commercial
terms and not prejudicial to CIT and its Unitholders who are not interested persons.
The IFA has therefore advised the Independent Directors to recommend that Unitholders
vote in favour of the Performance Fee Supplement.
The IFA Letter, containing its advice in full, is set out in Appendix D of this Circular.
5. INTERESTS OF DIRECTORS, SUBSTANTIAL UNITHOLDERS AND THE MANAGER
5.1 Directors’ Interests
The interests of the Directors in Units, as recorded in the Register of Directors’ Unitholdings
as at the Latest Practicable Date, are set out below.
Directors
Direct Interest Deemed Interest Total Interest
No. of
Units %
No. of
Units %
No. of
Units %
Dr Chua Yong Hai – – – – – –
Professor Ong Seow Eng 63,000 0.01 – – 63,000 0.01
Mr Tan Guong Ching – – – – – –
Mr Ooi Eng Peng – – – – – –
Mr Michael Patrick Dwyer(1) – – 8,839,295 0.72 8,839,295 0.72
Mr Victor Ong Wei Tak(2)
(Alternate Director to
Mr Michael Patrick Dwyer) – – 8,839,295 0.72 8,839,295 0.72
Mr Masaki Kurita – – – – – –
Mr Ian Andrew Smith – – – – – –
Mr Lee Stuart Neibart – – – – – –
Mr Christopher Dale Calvert 64,125 0.01 – – 64,125 0.01
Notes:
(1) Mr Michael Patrick Dwyer is deemed to be interested in the 8,839,295 Units held by the Manager by virtue
of his interest in Cambridge Real Estate Investment Management Pte. Ltd., which holds 80% interest in the
Manager.
(2) Mr Victor Ong Wei Tak is deemed to be interested in the 8,839,295 Units held by the Manager by virtue of his
interest in Cambridge Real Estate Investment Management Pte. Ltd., which holds 80% interest in the
Manager.
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5.2 Interests of Substantial Unitholders
The interests of the substantial Unitholders in Units as recorded in the Register of
Substantial Unitholders as at the Latest Practicable Date are set out below.
Substantial
Unitholders
Direct Interest Deemed Interest Total Interest
No. of Units % No. of Units % No. of Units %
Mr Chan Wai Kheong 56,349,536 4.60 41,770,085(1) 3.41 98,119,621 8.01
Franklin Resources, Inc – – 96,076,663(2) 7.85 96,076,663 7.85
Notes:
(1) Chan Wai Kheong is deemed to be interested in the 62,582 Units held by Oakgrove Pte Ltd, 41,644,921
Units held by Splendid Asia Macro Fund and 62,582 Units held by Sym Asia.
(2) Franklin Resources, Inc. is deemed to be interested in the Units held by funds and managed accounts
that are managed by investment advisers directly or indirectly owned by Franklin Resources, Inc.
5.3 Interests of the Manager and its Associates
The interests of the Manager and its associates in Units as at the Latest Practicable Date are
set out below.
Manager and its
Associates
Direct Interest Deemed Interest Total Interest
No. of Units % No. of Units % No. of Units %
The Manager 8,839,295 0.72 – – 8,839,295 0.72
nabInvest Capital
Partners Pty Limited 15,795,000 1.29 8,839,295 0.72 24,634,295 2.01
6. RECOMMENDATIONS
6.1 The Unit Issue Supplement
The Directors (including members of the ARCC) have considered the relevant factors,
including the terms of the Unit Issue Supplement, the rationale for the Unit Issue Supplement
as set out in paragraph 2.2 above, and recommend that Unitholders vote in favour of the
resolution relating to the Unit Issue Supplement.
6.2 The Development Management Fee Supplement
The Independent Directors have considered the relevant factors, including the terms of the
Development Management Fee Supplement, the rationale for the Development Management
Fee Supplement as set out in paragraph 3.3 above, the opinion of the IFA (as set out in the
letter from the IFA in Appendix D to this Circular), and recommend that Unitholders vote in
favour of the resolution relating to the Development Management Fee Supplement.
6.3 The Performance Fee Supplement
The Independent Directors have considered the relevant factors, including the terms of the
Performance Fee Supplement, the rationale for the Performance Fee Supplement as set out
in paragraph 4.2 above, the opinion of the IFA (as set out in the letter from the IFA in
Appendix D to this Circular) and recommend that Unitholders vote in favour of the resolution
relating to the Performance Fee Supplement.
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7. EXTRAORDINARY GENERAL MEETING
The EGM, notice of which is set out on page 70 of this Circular, will be held at NTUC
Auditorium, Level 7, NTUC Centre, One Marina Boulevard, Singapore 018989 on 19 April
2013 at 2.30 p.m. (or as soon thereafter following the conclusion/adjournment of the Annual
General Meeting of CIT to be held at 2.00 p.m. on the same day and at the same place) for
the purpose of considering and, if thought fit, passing, the Extraordinary Resolutions set out
in the notice of EGM.
A depositor shall not be regarded as a Unitholder entitled to attend the EGM and to speak
and vote thereat unless he is shown to have Units entered against his name in the Depository
Register, as certified by CDP as at 48 hours before the EGM.
8. ABSTENTIONS FROM VOTING
The Manager and its associates (including nabInvest Capital Partners Pty Limited), the
Directors and Mitsui & Co., Ltd. will abstain from voting on the Extraordinary Resolution in
respect of the Development Management Fee Supplement and the Performance Fee
Supplement. Further, each of them shall decline to accept appointment as proxy to attend
and vote at the EGM in respect of the Extraordinary Resolution relating to the Development
Management Fee Supplement and the Performance Fee Supplement unless the Unitholder
concerned has given specific instructions in his proxy form as to the manner in which his
votes are to be cast.
Cambridge Real Estate Investment Management Pte. Ltd. and Mitsui & Co., Ltd., have
shareholding interests of 80% and 20% in the Manager, respectively. Cambridge Real Estate
Investment Management Pte. Ltd. is a wholly-owned subsidiary of nabInvest Oxley
Singapore Pte. Ltd. who in turn is a subsidiary of nabInvest Capital Partners Pty Limited.
Accordingly, nabInvest Capital Partners Pty Limited is an “associate” of the Manager as
defined under paragraph 1.2(a) of the Property Funds Appendix, and shall abstain from
voting and decline to accept appointment as proxy as aforesaid.
Mitsui & Co., Ltd. is not an “associate” of the Manager as defined under paragraph 1.2(a) of
the Property Funds Appendix. However, pursuant to paragraph 5.2(b) of the Property Funds
Appendix, a person who “has an interest, whether commercial, financial or personal, in the
outcome of the transaction, other than in his capacity as a participant, will not be allowed to
vote on the resolution to approve the transaction”. As at the Latest Practicable Date, Mitsui
& Co., Ltd. has a direct shareholding interest of 20% in the Manager. Accordingly, Mitsui &
Co., Ltd. shall abstain from voting and decline to accept appointment as proxy as aforesaid.
9. ACTION TO BE TAKEN BY UNITHOLDERS
A Unitholder who is unable to attend the EGM and wishes to appoint a proxy to attend and
vote on his behalf, may complete, sign and return the proxy form attached to the notice of
EGM in accordance with the instructions printed thereon as soon as possible and in any
event so as to reach the CIT’s Unit Registrar’s office at 63 Cantonment Road, Singapore
089758 not later than 2.30 p.m. on 17 April 2013. The completion and return of the proxy form
by a Unitholder will not prevent him from attending and voting at the EGM, if he wishes to do
so, in place of his proxy.
Persons who have an interest in the approval of one or more of the resolutions must decline
to accept appointment as proxies unless the Unitholder concerned has specific instructions
in his proxy form as to the manner in which his votes are to be cast in respect of such
resolutions.
32
10. DIRECTORS’ RESPONSIBILITY STATEMENT
The Directors collectively and individually accept full responsibility for the accuracy of the
information given in this Circular and confirm after making all reasonable enquiries that, to
the best of their knowledge and belief, this Circular constitutes full and true disclosure of all
material facts about the Unit Issue Supplement, the Development Management Fee
Supplement, the Performance Fee Supplement, CIT and its subsidiaries, and the Directors
are not aware of any facts the omission of which would make any statement in this Circular
misleading.
Where information contained in this Circular has been extracted from published or otherwise
publicly available sources or obtained from a named source, the sole responsibility of the
Directors has been to ensure that such information has been accurately and correctly
extracted from these sources and/or reproduced in this Circular in its proper form and
context.
11. CONSENT
The IFA has given and has not withdrawn its written consent to the issue of this Circular with
the inclusion of its name and the letter dated 25 March 2013 from the IFA to the Independent
Directors (reproduced in Appendix D to this Circular) and all references thereto, in the form
and context in which they appear in this Circular.
12. DOCUMENTS ON DISPLAY
A copy of the letter from the IFA is available for inspection during normal business hours
(prior appointment will be appreciated) at the registered office of the Manager at 61 Robinson
Road, #12-01 Robinson Centre, Singapore 068893 from the date of this Circular up to and
including the date falling three months after the date of this Circular.
The Trust Deed will be available for inspection during normal business hours (prior
appointment will be appreciated) at the registered office of the Manager at 61 Robinson
Road, #12-01 Robinson Centre, Singapore 068893 for so long as CIT is in existence.
Yours faithfully,
Cambridge Industrial Trust Management Limited
(Company Registration No.: 200512804G, Capital Markets Services Licence No.: CMS 100132-2)
As manager of Cambridge Industrial Trust
Christopher Calvert
Chief Executive Officer and Executive Director
Singapore
25 March 2013
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APPENDIX A
PROPOSED UNIT ISSUE SUPPLEMENT TO THE TRUST DEED
The proposed form of the amendments to the Trust Deed upon Unitholders’ approval of the Unit
Issue Supplement is as follows:
• that Clause 5.3.2 of the Trust Deed (as shown by the strikethrough below) be deleted in its
entirety and replaced with the underlined text below:
“5.3.2 Subject to the Listing Rules and this Clause 5 and for so long as the Trust is Listed,
the Manager may issue Units at an Issue Price other than calculated in accordance
with Clause 5.3.1 without prior approval of Holders in a meeting of Holders
PROVIDED THAT:
(i) the Issue Price of a Unit for a rights issue offered on a pro rata basis to all
existing Holders must not be less than 50% (or such other percentage as may
be permitted by the SGX-ST or relevant Recognised Stock Exchange) of the
Market Price of Units determined pursuant to Clause 5.3.1 (if applicable, of
the same Class) on the Business Day preceding the day on which the
intention to make the offer or issue is announced. Any such rights entitlement
must be tradable on the SGX-ST or any other Recognised Stock Exchange
on which the Trust is Listed, unless the Authority by notice in writing allows
otherwise. The Trustee must ensure that such a rights issue is made at a
price that is in accordance with the terms specified in this Clause 5.3.2(i);
(ii) the Issue Price of a Unit for any reinvestment of distribution arrangement
under Clause 11.11 must not be less than 90% (or such other percentage as
may be permitted by the SGX-ST or relevant Recognised Stock Exchange) of
the Market Price of a Unit determined pursuant to Clause 5.3.1 as at the
Business Day immediately following the Record Date for the determination of
Distribution Entitlements. The Trustee must ensure that such an issue is
made at a price that is in accordance with the terms specified in this Clause
5.3.2(ii);
(iii) the Issue Price of a Unit issued other than by way of a rights issue offered on
a pro rata basis to all existing Holders must be determined in accordance with
the conditions set out in Clauses 5.3.3 and 5.3.4; and
(iv) where Units are issued as full or partial consideration for the acquisition of an
Authorised Investment by the Trust in conjunction with an issue of Units
pursuant to Clause 5.3.2(i) or Clause 5.3.3 to raise cash for the balance of
the consideration for the said Authorised Investment (or part thereof) or to
acquire other Authorised Investments in conjunction with the said Authorised
Investment, the Manager shall have the discretion to determine that the Issue
Price of a Unit so issued as partial consideration shall be the same as the
Issue Price for the Units issued in conjunction therewith pursuant to Clause
5.3.2(i) or (as the case may be) Clause 5.3.3.
Subject to the Listing Rules and for so long as the Trust is Listed, the Manager may
issue Units at an Issue Price other than as calculated in accordance with Clause
5.3.1 without prior approval of Holders in a meeting of Holders, provided that the
Manager complies with the Listing Rules in determining the Issue Price, including
the Issue Price of a Unit for a rights issue offered on a pro rata basis to all existing
34
Holders, the Issue Price of a Unit issued other than by way of a rights issue offered
on a pro rata basis to all existing Holders, and the Issue Price of a Unit for any
reinvestment or distribution arrangement.”
• that Clause 5.3.3 of the Trust Deed (as shown by the strikethrough below) be deleted in its
entirety and replaced with the underlined text below:
“5.3.3 Subject to Clause 5.3.5, for so long as the Trust is Listed, new Units may be issued
other than by way of a rights issue offered on a pro rata basis to all existing Holders
without the prior approval of Holders in a meeting of Holders PROVIDED THAT:
(i) the issue (together with any other issue of Units other than by way of a rights
issue offered on a pro rata basis to all existing Holders in the same Financial
Year, including Units issued to the Manager in payment of the Manager’s
Base Fee and/or Performance Fee) would not, immediately after the issue,
exceed 10% (or such other percentage as may, from time to time, be
prescribed by the Authority) of the Value of the Deposited Property including
any Authorised Investment acquired or to be acquired by the Trust, for which
the new Units are to be issued PROVIDED THAT the number of Units which
would be represented by such percentage does not exceed the number of
Units represented by 20% of the outstanding Units (or such other percentage
of outstanding Units as may, from time to time, be prescribed by the SGX-ST
or relevant Recognised Stock Exchange); and
(ii) where such an issue is made at a discount to the Market Price, the discount
does not exceed 5% or such other percentage as may, from time to time, be
prescribed by the Authority.
For the purposes of this Clause 5.3.3, Market Price shall mean the volume
weighted average price for trades done on the SGX-ST or relevant Recognised
Stock Exchange on the day the placement agreement (or equivalent agreement) is
signed. The volume weighted average price shall be calculated based on the trades
done for a full market day, or if trading in the Listed Units is not available for a full
market day, the volume weighted average price shall be calculated based on the
trades done on the preceding market day up to the time the placement agreement
(or equivalent agreement) is signed.
The Trustee must ensure that an issue of new Units other than by way of a rights
issue offered on a pro rata basis to all existing Holders without the prior approval of
Holders in a meeting of Holders complies with the terms specified in this Clause
5.3.3.
Where Units are issued as full or partial consideration for the acquisition of an
Authorised Investment by the Trust in conjunction with an issue of Units to raise
cash for the balance of the consideration for the said Authorised Investment (or part
thereof) or to acquire other Authorised Investments in conjunction with the said
Authorised Investment, the Manager shall have the discretion to determine that the
Issue Price of a Unit so issued as full or partial consideration shall be the same as
the Issue Price for the Units issued in conjunction with an issue of Units to raise
cash for the aforesaid purposes.”
35
• that Clause 5.3.4 of the Trust Deed (as shown by the strikethrough below) be deleted in its
entirety and replaced with the underlined text below:
“5.3.4 Subject to Clause 5.3.5, for so long as the Trust is Listed, an issue of Units (other
than by way of rights issue offered on a pro rata basis to all existing Holders)
exceeding any of the above thresholds in Clauses 5.3.3(i) and 5.3.3(ii) will require
specific prior approval of Holders by Extraordinary Resolution at a meeting of
Holders to be convened by the Manager in accordance with Schedule 1. If relevant
in the circumstances, specific prior approval of Holders by Extraordinary Resolution
must also have been obtained to permit the issue of Units to the Manager in
payment of the Manager’s Base Fee and/or Performance Fee if the issue of Units
contemplated thereunder exceeds any of the thresholds in Clauses 5.3.3(i) and
5.3.3(ii). For the avoidance of doubt, any issue of Units pursuant to:
(i) such approval of Holders; and
(ii) Clause 5.2.4,
shall not be taken into account in determining whether a subsequent proposed issue
of Units in the same financial year will exceed any of the thresholds in Clauses
5.3.3(i) and 5.3.3(ii).
For so long as the Trust is Listed, subject to any applicable laws, regulations and the
Listing Rules, the Manager shall not issue any Units in numbers exceeding the limit
(if any) set out in any applicable laws, regulations and the Listing Rules, relating to
the issue of Units unless the Holders approve the issue of Units exceeding the
aforesaid limit in general meeting.”
• that Clause 5.3.5 of the Trust Deed be amended in accordance with the following deletions
indicated by the text in strikethrough and additions indicated by the underlined text below:
“5.3.5 (Except in the case of an issue of Units to the Manager in payment of the Manager’s
Base Fee and/or Performance Fee) fFor so long as the Trust is Listed:
(i) the Trustee and/or its related parties; and
(ii) the Manager and/or its related parties; and
(iii)(ii) the directors and/or immediate family members of the directors of the Trustee
and the Manager,
(unless otherwise permitted by the Authority in writing) may only participate in the
issue of Units pursuant to Clauses 5.3.3 or 5.3.4 (which, for the avoidance of doubt,
shall not include any issue of Units by way of a preferential offering of Units on a pro
rata basis to all existing Holders or an offering of Units to the public through the
internet or through the automated teller machines of participating banks which is
carried out without preference to any particular group of investors) with the prior
specific approval of Holders by Ordinary Resolution at a meeting to be convened by
the Manager in accordance with Schedule 1 at which the following persons (unless
otherwise permitted by the Authority in writing) must abstain from voting:
(aa) the person to which the issue is to be made;
(bb) where such person is a corporation, its directors and the immediate family
members of its directors; and
36
(cc) where such person is a corporation, its related parties.
For the purpose of this Clause 5.3.5, related parties in relation to an entity shall
mean its related corporations (as defined in the Companies Act) and companies in
which at least 20% but not more than 50% of its shares are held by such entity and
its related corporations.”
• that Clause 15.1.1(iv) of the Trust Deed be amended in accordance with the following
deletion indicated by the text in strikethrough below:
“(iv) The Base Fee may at the discretion of the Manager be structured at the initial public
offering of Units and subsequently as payable in the form of cash or Units or a
combination of both cash and Units in such proportions as may be determined at the
option of the Manager, and be based generally in relation to the Value of the
Deposited Property as a whole. If payment is in the form of Units, the Manager shall
be entitled to receive such number of Units as may be purchased for the relevant
amount of the Base Fee at the Issue Price with reference to the Market Price
determined under Clause 5.3.1 or, if applicable, Clause 5.3.3 determined as at the
end of each calendar quarter. In the event the payment or part thereof is to be made
in the form of Units and Holders’ prior approval is required for the issue of such
Units pursuant to Clause 5.3.4 but is not obtained, then the payment to the Manager
for that portion of the Base Fee shall be made in the form of cash.”
• that Clause 15.1.1(vi) of the Trust Deed be amended in accordance with the following
deletion indicated by the deleted text below:
“(vi) Subject to the restriction under Clause 5.3.4 and to the Base Fee remaining within
the permitted limit, tThe Manager may at any time determine or change the
structure of the payment of the Base Fee between cash and Units without the
requirement of obtaining approval by an Extraordinary Resolution of a meeting of
Holders or (as the case may be) Depositors.”
• that Clause 15.1.2(iii) of the Trust Deed be amended in accordance with the following
deletion indicated by the deleted text below:
“(iii) The Performance Fee may at the discretion of the Manager be structured as
payable in the form of cash or Units or a combination of both cash and Units in such
proportion as may be determined at the option of the Manager and, subject to the
restrictions under Clause 5.3.4, to the Performance Fee being determined in
accordance with formula calculated in accordance with Clause 15.1.2(ii) and to the
total of the Base Fee and the Performance Fee not exceeding the limit for that
Financial Year calculated in accordance with Clause 15.1.3(i), the Manager may at
any time change the structure of the payment of the Performance Fee between cash
and Units without the requirement of obtaining approval by an Extraordinary
Resolution of a meeting of the Holders or (as the case may be) Depositors Provided
That the Manager is entitled to payment of the Performance Fee for any Half Year
in cash (with the amount of the cash payment to be calculated in accordance with
Clause 15.1.4) if a Trigger Event occurs within that Half Year. In the event the
payment or part thereof is to be made in the form of Units and the Holders’ prior
approval is required for the issue of such Units pursuant to Clause 5.3.4 but is not
obtained, then the payment to the Manager for that portion of the Performance Fee
shall be made in the form of cash.”
37
• that Clause 15.2.4 of the Trust Deed be amended in accordance with the following deletion
indicated by the deleted text below:
“15.2.4 The Manager may opt to receive the Acquisition Fee in the form of cash or Units or
a combination of both cash and Units, Provided that in respect of any acquisition
under Clause 15.2.1 from a Related Party such Acquisition Fee shall be in the form
of Units. Where the Acquisition Fee is to be received in the form of Units, the
Manager shall be entitled to receive such number of Units as may be purchased for
the relevant amount of the Acquisition Fee at the Issue Price with reference to the
Market Price determined under Clause 5.3.1. or, if applicable, Clause 5.3.3. In the
event the payment or part thereof is to be made in the form of Units and the Holders
prior approval was required for the issue of such Units pursuant to Clause 5.3.4 but
was not obtained, then the payment to the Manager for that portion of that
Acquisition Fee shall be made in the form of cash.”
• that Clause 15.3.4 of the Trust Deed be amended in accordance with the following deletion
indicated by the deleted text below:
“15.3.4 The Manager may opt to receive the Disposal Fee in the form of cash or Units or a
combination of both cash and Units, Provided that in respect of any disposal under
Clause 15.3.1 from a Related Party such Disposal Fee shall be in the form of Units.
Where the Disposal Fee is to be received in the form of Units, the Manager shall be
entitled to receive such number of Units as may be purchased for the relevant
amount of the Disposal Fee at the Issue Price with reference to the Market Price
determined under Clause 5.3.1 or, if applicable, Clause 5.3.3. In the event the
payment or part thereof is to be made in the form of Units and the Holders prior
approval was required for the issue of such Units pursuant to Clause 5.3.4 but was
not obtained, then the payment to the Manager for that portion of that Disposal Fee
shall be made in the form of cash.”
• that Paragraph 5 of Schedule 1 to the Trust Deed be amended in accordance with the
following deletions indicated by the text in strikethrough and additions indicated by the
underlined text below:
“5. A meeting of Holders duly convened and held in accordance with the provisions of
this Schedule shall be competent by:
(i) Extraordinary Resolution to:
(a) sanction any modification, alteration or addition to the provisions of
this Deed which shall be agreed by the Trustee and the Manager as
provided in Clause 28 of this Deed;
(b) sanction a supplemental deed increasing the maximum permitted limit
or any change in the structure of the Management Fee (including the
Base Fee and the Performance Fee), the Acquisition Fee, the Disposal
Fee and the Trustee’s remuneration as provided in Clause 156 of this
Deed;
(c) sanction any issue of Units by the Manager under the circumstances
set out for an issue of Units other than by way of an issue of Units
pursuant to Clauses 5.2 to 5.4 of this Deed;
(d)(c) remove the Auditors as provided in Clause 22.1 of this Deed;
38
(e)(d) remove the Trustee as provided in Clause 23.3.4 of this Deed; and
(f)(e) direct the Trustee to take any action pursuant to Section 295 of the
Securities and Futures Act; and
(ii) an Ordinary Resolution to remove the Manager as provided in Clause 24.1.4
of this Deed;
(iii) a resolution duly proposed and passed as such by a majority representing
80% or more of the total number of votes cast for and against such resolution
to delist the Trust after it has been Listed as provided in Clause 9.2 of this
Deed,
and shall have such further or other powers under such terms and conditions as
may be determined by the Manager with the prior written approval of the Trustee.
Any decision to be made by resolution of the Holders other than those specified in
this paragraph 5(i) to (iii), shall be made by Ordinary Resolution, unless an
Extraordinary Resolution is required by the (where applicable) Securities and
Futures Act, the Regulations, the Property Funds Guidelines, the Code or the
Listing Rules.”
39
APPENDIX B
PROPOSED DEVELOPMENT MANAGEMENT FEE SUPPLEMENT
TO THE TRUST DEED
The proposed form of the amendments to the Trust Deed upon Unitholders’ approval of the
Development Management Fee Supplement is as follows:
• that Clause 1.1 of the Trust Deed be amended by inserting the following definitions of
“Development Management Fee” and “Development Project” immediately after the definition
of “Depository Services Agreement”:
“Development Management Fee” means the development management fee in respect of
Development Projects undertaken on behalf of the Trust by the Manager, which is calculated
in accordance with Clause 15.6;
“Development Project” means a project involving the development of land, or buildings, or
part(s) thereof (including asset enhancement initiatives) on land which is acquired, held or
leased by the Trust, provided always that the Property Funds Guidelines shall be complied
with for the purposes of such development, but does not include refurbishment, retrofitting
and renovations;”
• that Clause 1.1 of the Trust Deed be amended by inserting the following definition of “Total
Project Costs” immediately after the definition of “Tax Ruling”:
“Total Project Costs” means the sum of the following:
(a) construction cost based on the project final account prepared by the project quantity
surveyor;
(b) land cost including differential premium or development charge where applicable. For
land acquired on land rent basis, only the total amount of land rent payable during the
development period will be included. For redevelopment of existing properties, land
cost refers to all costs associated with land such as any payment of additional premium
or amounts to the regulatory authorities in connection with the redevelopment, but does
not include the value of the land. For avoidance of doubt, there will be no land cost
component for land which has been allocated at no cost to the Trust for built-to-suit
developments;
(c) principal consultants fees including payments to the Development Project’s architect,
civil and structure engineer, mechanical and electrical engineer, quantity surveyor and
project manager;
(d) the cost of obtaining all approvals for the Development Project;
(e) site staff costs;
(f) interest costs on borrowings used to finance project cashflows that are capitalised to
the project in line with generally accepted accounting principles; and
(g) any other costs which could reasonably be considered to meet the definition of total
project costs and can be capitalised to the Development Project in accordance with
generally accepted accounting principles;”
40
• that Clause 4.3.16 of the Trust Deed be amended by inserting the following addition indicated
by the underlined text below:
“4.3.16 the Management Fee comprising the Base Fee and the Performance Fee, the
Acquisition Fee, the Disposal Fee, the Development Management Fee and the
remuneration of the Trustee pursuant to Clause 15;”
• that Clause 15 of the Trust Deed be amended by inserting the following clause after Clause
15.5, and Clause 15.6 of the Trust Deed be renumbered accordingly:
“15.6 Development Management Fees
15.6.1 The Manager is entitled to receive a Development Management Fee of up
to 3.0 per cent. of the Total Project Costs incurred in a Development
Project undertaken on behalf of the Trust subject to the following:
(i) where the estimated Total Project Costs in respect of a Development
Project is up to S$50 million, the amount of Development
Management Fee to be paid to the Manager in respect of that
Development Project shall be reviewed and approved by the Audit,
Risk Management and Compliance Committee of the Manager;
(ii) where the estimated Total Project Costs in respect of a Development
Project exceed S$50 million, the amount of Development
Management Fee to be paid to the Manager in respect of that
Development Project shall first be reviewed and approved by the
Trustee and the independent directors of the Manager. Where the
Trustee and the independent directors of the Manager so direct, the
Development Management Fee shall be reduced accordingly;
(iii) where the market pricing for comparable development management
services as determined by independent quantity surveyors is
materially lower than the Development Management Fee calculated
in accordance with this Clause 15.6.1, the Manager shall reduce the
Development Management Fee to match the lower market pricing;
and
(iv) any increase in the percentage of the Development Management
Fee or any change in the structure of the Development Management
Fee shall be approved by an Extraordinary Resolution of a meeting
of Holders or (as the case may be) Depositors duly convened and
held in accordance with the provisions of the Schedule hereto.
15.6.2 Subject to the Property Funds Guidelines, the Development Management
Fee shall be paid to the Manager in the form of cash. For any
development management services provided by any third party service
providers in connection with a Development Project, any payment to such
third party service providers shall be borne by the Manager, and not
additionally out of the Trust. In addition, the Development Management
Fee shall be payable in equal monthly instalments over the construction
period of each Development Project undertaken by the Manager on
behalf of the Trust based on the Manager’s best estimate of the Total
Project Costs and construction period and, in the event of any
overpayment or underpayment, a final adjustment of the balance amount
when the Total Project Costs are finalised. If the Total Project Costs have
41
been over-estimated, a refund of the excess Development Management
Fee will be made by the Manager to the Trust. The Trust shall bear all
applicable GST and all other applicable sales tax, governmental
impositions, duties and levies whatsoever imposed on the Development
Management Fee by the relevant authorities in Singapore or elsewhere.
15.6.3 No Acquisition Fees and other additional fees will be paid to the Manager
for development management services which are rendered for
Development Projects if the Manager receives the Development
Management Fee.
15.6.4 A Development Management Fee is chargeable for redevelopment of an
existing property. However, the Manager will not receive a Development
Management Fee for activities involving refurbishment, retrofitting and
renovations.”
• that Clause 19.1 of the Trust Deed be amended by inserting the following clause after Clause
19.1.24, and Clause 19.1.25 of the Trust Deed be renumbered accordingly:
“19.1.25 provide development management services to the Trust in respect of Development
Projects. For the avoidance of doubt, the Manager may at its sole discretion
appoint one or more service providers to perform all or some of the development
management services provided that the Manager remains at all times responsible
for the development management services provided by the service provider(s) and
the Manager shall be entitled to the full Development Management Fee
notwithstanding the appointment of such service provider(s):”
• that Paragraph 5(i)(b) of Schedule 1 to the Trust Deed be amended in accordance with the
following deletions indicated by the text in strikethrough and additions indicated by the
underlined text below:
“5. A meeting of Holders duly convened and held in accordance with the provisions of
this Schedule shall be competent by:
(i) Extraordinary Resolution to:
(b) sanction a supplemental deed increasing the maximum permitted limit
or any change in the structure of the Management Fee (including the
Base Fee and the Performance Fee), the Acquisition Fee, the Disposal
Fee, the Development Management Fee and the Trustee’s remuneration
as provided in Clause 156 of this Deed;”
42
APPENDIX C
PROPOSED PERFORMANCE FEE SUPPLEMENT TO THE TRUST DEED
The proposed form of the amendments to the Trust Deed upon Unitholders’ approval of the
Performance Fee Supplement is as follows:
• that Clause 15.1.2 to the Trust Deed be amended in accordance with the following deletions
indicated by the text in strikethrough and additions indicated by the underlined text below:
“15.1.2 Performance Fee
(i) Subject to Clause 15.1.3, the Manager, in addition to its remuneration under
clause 15.1.1, will be entitled to receive for its own account out of the
Deposited Property a Performance Fee, which the Manager may at its sole
discretion waive, partially or fully, if the Manager finds the Performance Fee to
be overstated, so as to reflect the impact of the fair market pricing for all
closing values relating to the calculation of the Performance Fees;
(ii) The formula for determining the Performance Fee (if any) to be paid to the
Manager in respect of a Half Year is set out below. If the TR (as defined below)
for the Trust for a Half Year is negative, the Performance Fee to which the
Manager would have been entitled will not be paid to the Manager until the end
of the first succeeding Half Year in which the TR is positive.
Performance Fee to be paid to the Manager = PF + EPF
Where
PF (Tier 1 Performance Fee) = NPc x MCo x 5%, but equals zero if NPc
is not greater than zero;
EPF (Tier 2 Performance Fee) = (NPc − EPb) x MCo x 15% but equals
zero if NPc is not greater than EPb;
NPc = TR − BM (in percentage);
NPo (Opening Net Performance) = NPc of prior Half Year except in the
first Half Year when NPo = 0;
TR (Trust Return percentage) =(Tc − To) x 100
To
where
Tc = Trust Index at the close of the Half Year; and
To = Opening Trust Index being the Trust Index at close of the prior
Half Year or if NPo<0 then To = the Trust Index used as the
opening Trust Index (To) for the previous period,
43
BM (Benchmark Return percentage) =(Bc − Bo) x 100
Bo
where
Bc = Benchmark Index at the end of the Half Year; and
Bo = Opening Benchmark Index being the Benchmark Index at
close of the prior Half Year or if NPo<0 the Bo = the
Benchmark Index used as the opening Benchmark Index (Bo)
for the previous period;
MCo (Equity Market Capitalisation) = Po x Uo
where
Po = the volume weighted average price for a Unit for all trades on
the SGX-ST in the ordinary course of trading during the five10
Business Days preceding the last day of the relevant Half Year
(including the fast day of the relevant Half Year) and the five
Business Days after the last day of the relevant Half Year (ten
Business Days in total), or if the Manager believes that the
foregoing calculation does not provide a fair reflection of the
volume weighted average price of a Unit (note that instances
where the volume weighted average price of a Unit not being
reflective of the fair volume weighted average price are limited
to very rare occasions (such as acts of market manipulation or
error trades that might cause an abnormal reflection of the
closing value of the Units)), an amount as determined by the
independent directors of the Manager and the Trustee (after
consultation with a Stockbroker approved by the Trustee), as
being the fair volume weighted average price of a Unit in
favour of the Trust; and
Uo = Units on issue at the close of the last day of the prior Half
Year;
For avoidance of doubt, any adjustments to the volume weighted
average price of a Unit for Po will only be made to adjust the
quantum of the Performance Fee lower and not higher.
EPb (Tier 2 Performance Benchmark, in percentage) = 2% nominal per
annum outperformance for the Half Year; and
(iii) The Performance Fee may at the discretion of the Manager be structured as
payable in the form of cash or Units or a combination of both cash and Units
in such proportion as may be determined at the option of the Manager and,
subject to the restrictions under Clause 5.3.4, to the Performance Fee being
determined in accordance with formula calculated in accordance with Clause
15.1.2(ii) and to the total of the Base Fee and the Performance Fee not
exceeding the limit for that Financial Year calculated in accordance with
Clause 15.1.3(i), the Manager may at any time change the structure of the
payment of the Performance Fee between cash and Units without the
requirement of obtaining approval by an Extraordinary Resolution of a meeting
of the Holders or (as the case may be) Depositors Provided That the Manager
is entitled to payment of the Performance Fee for any Half Year in cash (with
the amount of the cash payment to be calculated in accordance with Clause
15.1.4) if a Trigger Event occurs within that Half Year. In the event the payment
or part thereof is to be made in the form of Units and the Holders’ prior
44
approval is required for the issue of such Units pursuant to Clause 5.3.4 but is
not obtained, then the payment to the Manager for that portion of the
Performance Fee shall be made in the form of cash.
(iv) Where the whole or part of the Performance Fee is to be paid in the form of
Units, the Performance Fee for that Half Year reduced by the amount of any
Performance Fee received in cash in respect of that Half Year shall be divided
by “Pc” to determine the number of Units to be issued where:
Pc = the greater of (A) the volume weighted average price for a Unit for
all trades on the SGX-ST in the ordinary course of trading during
the five10 Business Days preceding the last day of the relevant Half
Year (including the last day of the relevant Half Year), or if the
Manager believes that the foregoing calculation does not provide a
fair reflection of the volume weighted average price of a Unit (note
that instances where the volume weighted average price of a Unit
not being reflective of the fair volume weighted average price are
limited to very rare occasions (such as acts of market manipulation
or error trades that might cause an abnormal reflection of the
closing value of the Units)), an amount as determined by the
independent directors of the Manager and the Trustee (after
consultation with a Stockbroker approved by the Trustee), as being
the fair volume weighted average price of a Unit and the five
Business Days after the last day of the relevant Half Year (ten
Business Days in total) and the Value of the Deposited Property
divided by the number of Units in issue or deemed to be in issue (B)
the Current Unit Value at the end of the Half Year. This will be the
issue price of the relevant Units to be issued.
(v) If and when the Performance Fee is paid in the form of Units in respect of a
Half Year where the Trust Index is below its historical Half Year end high
achieved since listing of the Units, the Manager may not sell or otherwise
dispose of such Units until a time after the Trust Index equals or exceeds that
prior peak, and until the time the Manager is entitled to sell such Units, all
distributions in respect of such Units must, if a distribution reinvestment plan
then applies, be reinvested pursuant to the distribution reinvestment plan and
the Units received pursuant to the reinvestment will be subject to the same
restriction on sale or disposal. The restriction on sale or disposal will cease if
a Trigger Event occurs.
(vi) Any payment of the Performance Fee whether in the form of cash or Units shall
be payable out of the Deposited Property in arrears within 30 days after the
last day of each Half Year. Such payment shall be made out of whichever bank
account of the Trust the Manager in its discretion shall decide.
(vii) The amount of the Performance Fee (if any) payable to the Manager shall
exclude all applicable GST and all other applicable sales tax, governmental
impositions, duties and levies whatsoever imposed thereon by the relevant
authorities in Singapore or elsewhere, which shall be borne by the Trust and
paid in cash.
(viii) If the Benchmark Index referred to in paragraph (a) of the definition of
Benchmark Index in Clause 1.1 is, in the opinion of the Manager, in
consultation with the Trustee, not practical or relevant, the Benchmark Index
shall be a similar index calculated by FTSE International Limited or another
index provider with similar capabilities (the composition of which shall be
45
determined by the Manager after consultation with the Trustee) which the
Manager, after consultation with the Trustee, determines is more appropriate
for measuring the performance of the Trust.
(ix) Each of the Manager and the Trustee acknowledges as follows: (a) if the
Benchmark Index is to be changed pursuant to the above, the new index shall
be adopted as the new Benchmark Index as soon as practicable, if possible,
for the following Half-Year; (b) the Benchmark Index will commence at a base
value of 100 on the Listing Date, based upon the closing value of the securities
comprising the Benchmark Index on the Business Day preceding the Listing
Date; (c) the closing value of the Benchmark Index for the relevant Half-Year
will be computed based on the average of the closing values of the Benchmark
Index for the 10 Business Days preceding the last day of the relevant Half-Year
(including the last day of the relevant Half-Year). The closing value of the
Benchmark Index for each Business Day will be based on the investible (i.e.
free float) market capitalisation weightings of the securities comprising the
Benchmark Index recorded on the SGX-ST (or other exchange on which such
securities are quoted) during the five Business Days preceding the last day of
the relevant Half-Year (including the last day of the relevant Half-Year) and the
five Business Days after the last day of the relevant Half-Year (ten Business
Days in total); (d) if the Trust is included in the Benchmark Index, the
Benchmark Index will be adjusted by the index provider by removing the Trust
from the Benchmark Index; and (e) any change in the Benchmark Index will be
announced to the public by the Manager via SGXNet with a posting of the
announcement on the internet at the SGX-ST website.
(x) The Manager and Trustee shall procure that the Trust Index will be calculated
by FTSE International Limited or another index provider approved by the
Manager and Trustee. The Manager and the Trustee acknowledges that (a) the
Trust Index will be calculated in accordance with the index provider’s standard
practices in relation to index calculation. The Trust Index will measure the total
return of the Trust, combining both capital performance of the security and its
reinvested income; (b) the closing value of the Trust Index for the relevant
Half-Year will be computed based on the average of the closing values of the
Trust Index for the 10 Business Days preceding the last day of the relevant
Half-Year (including the last day of the relevant Half-Year), or if the Manager
believes that the foregoing calculation does not provide a fair reflection of the
closing value of the Trust Index for that Business Day (note that instances
where the values of the Trust Index not being reflective of the fair values are
limited to very rare occasions (such as acts of market manipulation or error
trades that might cause an abnormal reflection of the closing value of the
Units)), a value as determined by the independent directors of the Manager
and the Trustee (after consultation with FTSE International Limited or another
index provider approved by the Manager and Trustee), as being the fair closing
value of the Trust Index for that Business Day in favour of the Trust; (c) the
Trust Index will be calculated daily using declared dividends; (cd) the
calculation method will be adjusted according to whether any dividends are
declared ex-dividend on a given day; and (de) the ex-dividend adjustment
represents the value of dividends declared by the security on the ex-dividend
date expressed in index points.
For avoidance of doubt, any adjustments to the closing value of the Trust Index
will only be made to adjust the quantum of the Performance Fee lower and not
higher.
(xi) The Trust Index will commence at 100 on the Listing Date based on the initial
amount paid for each Unit pursuant to the Prospectus as at the Listing Date.”
46
APPENDIX D
LETTER OF THE INDEPENDENT FINANCIAL ADVISER
25 March 2013
The Independent Directors
Cambridge Industrial Trust Management Limited
(The Manager of Cambridge Industrial Trust)
61 Robinson Road
#12-01 Robinson Centre
Singapore 068893
Dear Sirs
PROPOSED DEVELOPMENT MANAGEMENT FEE SUPPLEMENT AND PROPOSED
PERFORMANCE FEE SUPPLEMENT ENTERED INTO BETWEEN RBC INVESTOR SERVICES
TRUST SINGAPORE LIMITED, IN ITS CAPACITY AS TRUSTEE OF CAMBRIDGE INDUSTRIAL
TRUST (“CIT”), AND CAMBRIDGE INDUSTRIAL TRUST MANAGEMENT LIMITED, IN ITS
CAPACITY AS MANAGER OF CIT
For the purpose of this letter, capitalised terms not otherwise defined shall have the meaning given
to them in the circular dated 25 March 2013 on the Proposed Development Management Fee
Supplement and Proposed Performance Fee Supplement, (the “Circular”) to the Unitholders of CIT.
1. INTRODUCTION
Cambridge Industrial Trust Management Limited, the manager of CIT (“CITM” or the
“Manager”), proposes to supplement the Trust Deed:
(a) to allow the Manager to receive development management fees for Development
Projects undertaken and managed by the Manager on behalf of CIT (the “Proposed
Development Management Fee Supplement”); and
(b) to (i) align the calculations of (aa) the Benchmark Index for Performance Fees
calculation, (bb) the Trust Index for Performance Fees calculation, (cc) the calculated
VWAP for a Unit used to determine market capitalisation for Performance Fees
calculation, and (dd) the market price to calculate the number of units to be issued to
the Manager (the “Issue Price”) in relation to the Performance Fees payment, to make
them more robust and consistent with each other, (ii) align the calculation of the issue
price of the Units to be issued as Performance Fees calculation with other Singapore
REITs, and (iii) propose “recourse options” for (aa) the calculated Trust Index value for
Performance Fees calculation, and (bb) the calculated VWAP for a Unit used to
determine the market capitalisation for Performance Fees calculation, and (cc) Issue
Price for Performance Fees payment (collectively, the “Proposed Performance Fee
Supplement”).
CITM, being the manager of CIT, is considered an interested person of CIT for the purpose
of Chapter 9 of the Listing Manual and an “interested party” of CIT for the purpose of
guidelines relating to interested party transactions under the Property Funds Appendix.
Paragraph 5 of the Property Funds Appendix also imposes a requirement for Unitholders’
approval for an interested party transaction by CIT which value is equal to or exceeds 5% of
CIT’s net asset value. Although the Development Management Fee together with the
Performance Fee is unlikely to exceed 5% of CIT’s latest audited net tangible assets or net
47
asset value in any given financial year, the Manager is nonetheless seeking Unitholders’
approvals for both the Proposed Development Management Fee Supplement and the
Proposed Performance Fee Supplement as a matter of good corporate governance practice.
Further, should such approval be obtained, the payment of Development Management Fees
and Performance Fees to the Manager in accordance with the Development Management
Fee Supplement and the Performance Fee Supplement shall not be subject to aggregation
or further Unitholders’ approval requirements under Rules 905 and 906 of the Listing Manual
and under paragraph 5 of the Property Funds Appendix, to the extent that there is no
subsequent increase in the rates of, or change in the structure of, the Development
Management Fee or the Performance Fee respectively.
For the purpose of Chapter 9 of the Listing Manual, we, Deloitte & Touche Corporate Finance
Pte Ltd (“DTCF”), have been appointed as independent financial adviser to the Independent
Directors in respect of the Proposed Development Management Fee Supplement and the
Proposed Performance Fee Supplement and this letter sets out our evaluation.
2. TERMS OF REFERENCE
Our responsibility is to provide our opinion as to whether each of the Proposed Development
Management Fee Supplement and the Proposed Performance Fee Supplement are on normal
commercial terms and will not be prejudicial to the interests of CIT and its Unitholders who are
not interested persons. The Property Funds Appendix require that we make our assessment
based on the impact of each of the Proposed Development Management Fee Supplement and
the Proposed Performance Fee Supplement on CIT on an overall basis and that we draw
Unitholders’ attention to any possible disadvantages of each of the Proposed Development
Management Fee Supplement and the Proposed Performance Fee Supplement.
We were neither a party to the negotiations entered into in relation to the Proposed
Development Management Fee Supplement and the Proposed Performance Fee
Supplement nor were we involved in the deliberations leading up to the decision on the part
of the Directors to enter into these transactions.
We do not, by this letter or otherwise, advise or form any judgement on the strategic,
commercial or financial merits or risks of each of the Proposed Development Management
Fee Supplement and the Proposed Performance Fee Supplement. All such evaluations,
advice, judgements or comments remain the sole responsibility of the Directors and their
advisers. We have however, drawn upon such evaluations, judgements and comments as we
deem necessary and appropriate in arriving at our opinion.
The scope of our appointment does not require us to express, and nor do we express, a view
on the future growth prospects, earnings potential or value of CIT. We do not express any view
as to the price at which the Units may trade nor on the future value, financial performance or
condition of CIT as a result of future proposed development projects or performance fee.
It is also not within our terms of reference to compare the merits of either the Proposed
Development Management Fee Supplement or the Proposed Performance Fee Supplement
to any alternative transactions that were or may have been available to CIT. Such
comparison and consideration remain the responsibility of the Directors and their advisers.
We have relied upon the assurances of the Directors who have accepted full responsibility for
the accuracy and completeness of the information provided to us. The Directors have
confirmed to us that to the best of their knowledge, information and belief, all material
information available to them in connection with the Proposed Development Management Fee
Supplement and the Proposed Performance Fee Supplement have been disclosed to us and
that such information constitutes full and true disclosure of all material information relating to
48
such transactions and that there is no other information the omission of which would cause any
of the information disclosed to us or relied on by us in making our recommendation to be
inaccurate, incomplete, untrue or misleading in any material respect. We have assumed that
all statements of fact, belief, opinion and intention made by the Directors in the Circular have
been reasonably made after due and careful enquiry. Accordingly, no representation or
warranty (whether express or implied) is made and no responsibility is accepted by us
concerning the accuracy, completeness or adequacy of such information. We have
nonetheless made reasonable enquiries and used our judgement in assessing such
information and have found no reason to doubt the reliability of such information.
We have not made any independent evaluation or appraisal of the assets and liabilities
(including, without limitation, the real properties) of CIT.
Our views are based on market, economic, industry, monetary and other conditions (where
applicable) prevailing on and our analysis of the information made available to us as at the
Latest Practicable Date. We assume no responsibility to update, revise or reaffirm our
opinion, factors or assumptions in light of any subsequent development after the Latest
Practicable Date that may affect our opinion or factors or assumptions contained herein.
Unitholders should take note of any announcements relevant to their considerations of the
Proposed Development Management Fee Supplement and the Proposed Performance Fee
Supplement which may be released by the Manager after the Latest Practicable Date.
The Manager has been separately advised by its own legal adviser in the preparation of the
Circular other than this letter. We have had no role or involvement and have not provided any
advice whatsoever in the preparation, review and verification of the Circular other than this
letter. Accordingly, we take no responsibility for, and express no views, whether express or
implied, on the contents of the Circular except as for this letter.
Our opinion in relation to the Proposed Development Management Fee Supplement and the
Proposed Performance Fee Supplement as set out under Section 7 of this letter should be
considered in the context of the entirety of our advice. While a copy of this letter may be
reproduced in the Circular, the Manager may not reproduce, disseminate or quote this letter
or any part thereof for any purpose, other than for the purpose stated herein, without our prior
written consent in each instance.
We have not had regard to the general or specific investment objectives, financial situation,
tax position, risk profiles or unique needs and constraints of any Unitholder. As Unitholders
will have different investment objectives, we advise the Independent Directors to recommend
that any Unitholder who may require specific advice in relation to his or her specific
investment objectives or portfolio should consult his or her stockbroker, bank manager,
solicitor, accountant, tax adviser or other professional advisers.
3. DETAILS OF THE PROPOSED DEVELOPMENT MANAGEMENT FEE SUPPLEMENT TO
THE TRUST DEED
3.1 Principal Terms of the Proposed Development Management Fee Supplement
The Manager proposes to charge a development management fee of up to 3.0% of the total
project costs incurred in Development Projects undertaken by the Manager on behalf of CIT
(the “Development Management Fee”). The Manager shall reduce the Development
Management Fee to match the lower market pricing in circumstances where market pricing
for comparable development management services as determined by independent quantity
surveyors is materially lower. To further safeguard Unitholders’ interests, standard operating
procedures for determining the competitiveness of the Development Management Fee will
also be put in place by the Manager in consultation with the Independent Directors. Where
49
the estimated total project costs in respect of a Development Project is up to S$50 million,
the amount of Development Management Fee to be paid to the Manager in respect of that
Development Project shall be reviewed and approved by the ARCC1. For Development
Project(s) having estimated total project costs greater than S$50 million, the Trustee and the
Independent Directors will need to review and approve the quantum of the Development
Management Fee. Where the Trustee and the Independent Directors so direct, the
Development Management Fee shall be reduced accordingly. Any increase in the percentage
of the Development Management Fee or change in the structure of the Development
Management Fee shall be approved by an Extraordinary Resolution.
For the purpose of calculating the Development Management Fee, “total project costs”
means the sum of the construction costs, land costs (where applicable)2, principal
consultants fees, cost of obtaining all approvals for the Development Project, site staff costs,
interest costs and any other costs which could reasonably be considered to meet the
definition of total project costs and can be capitalised to the Development Project in
accordance with generally accepted accounting principles. Further details of components of
total project costs are set out in Appendix B of the Circular.
The Development Management Fee will only be payable in respect of Development Projects
actually undertaken by the Trust. As such, the Manager will not charge a Development
Management Fee for sourcing and conducting feasibility studies on development
opportunities which do not eventually materialise into Development Projects.
The Development Management Fee will be paid in cash to the Manager 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, in the event
of any overpayment or underpayment, a final adjustment of the balance amount when the
total project costs are finalised. If the total project costs have been over-estimated, a refund
of the excess Development Management Fee will be made by the Manager to CIT. For any
development management services provided by any third party service providers in
connection with a Development Project, any payment to such third party service providers
shall be borne by the Manager, and not additionally out of the Trust. CIT shall bear all
applicable goods and services tax and all other applicable sales tax, governmental
impositions, duties and levies whatsoever imposed on the Development Management Fee by
the relevant authorities in Singapore or elsewhere.
3.2 Responsibilities of the Manager In Respect Of Development Management Services
We reproduce below the responsibilities of the Manager in respect of development
management services as set out in paragraph 3.2 of the Circular. The Manager shall be
responsible for providing development management services such as:
(i) sourcing for and conducting feasibility studies on development opportunities and
coordinating with consultants to perform technical due diligence;
(ii) overall responsibility for the planning, control and monitoring of the progress of the
Development Project from conception to completion to ensure that the Development
Project is completed within the stipulated time and budget and to the stipulated quality;
1 “ARCC” means the Audit, Risk Management and Compliance Committee of the Manager.
2 For redevelopment of existing properties, land cost refers to all costs associated with land such as any payment of
additional premium or amounts to the regulatory authorities in connection with the redevelopment, but does not
include the value of the land. For avoidance of doubt, there will be no land cost component for land which has been
allocated at no cost to CIT for built-to-suit developments.
50
(iii) working closely with and overseeing the appointed project manager, architect and
consultants to carry out relevant value engineering to ensure a cost-efficient building;
(iv) reporting to the Trustee on a regular basis, in particular, on the cost and progress of the
Development Project;
(v) representing the Trustee in all site meetings during the construction period, and to
advise on any variation works and (where applicable) make appropriate
recommendations to the Trustee for consideration;
(vi) establishing the prospective tenant’s real estate requirements, make site selection,
negotiate with government authorities on land allocation and conditions;
(vii) providing value-add inputs on the concept and schematic plans by engaging the
Trustee’s service providers, namely property managers and marketers and involving the
Manager’s asset managers to ensure an efficient, functional and marketable end
product;
(viii) liaising with the prospective tenant for acceptance of concept and schematic plans and
building specifications;
(ix) establishing and ensuring agreement with the prospective tenant on the overall
milestones for the delivery of the Development Project; and
(x) finalising with the prospective tenant the architectural schematic plans/specifications
for use as the basis for calling of tender(s).
The role of the project manager is distinct from that of the development manager and
includes the preparation of tender documents, evaluating tender submissions, programme
management and scheduling, contract administration and regular reporting of cost, time,
quality and project concerns to the development manager.
The Manager has in-house project and property development capabilities. The team is led by
Mr Michael Long, an experienced development manager with over 20 years of experience in
the real estate development and construction industries in, among others, the large-scale
industrial, residential and commercial sectors. During his career in project development and
construction, Mr Michael Long has successfully delivered premium quality developments
working as a Senior Project Manager for Confluence Project Management in Singapore and
Bovis Lend Lease in Singapore, London and Sydney. He holds a Clerk of Works, Building
Diploma from Sydney TAFE and is an active member of the Project Managers Institute of
Australia.
CIT will only undertake developments on a selective basis to ensure they are value
enhancing to the existing portfolio. For example, the Manager believes that development
activities such as built-to-suit developments could be undertaken to cater to a prospective
tenant’s operational requirements and specifications. Such developments may generate long
term master leases and enable CIT to extend its lease expiry profile.
4. EVALUATION OF THE PROPOSED DEVELOPMENT MANAGEMENT FEE SUPPLEMENT
In reaching our recommendation in respect of the Proposed Development Management Fee
Supplement, we have given due consideration to the following factors:
(1) Rationale for the Proposed Development Management Fee Supplement.
51
(2) Comparison of the Development Management Fee with development management fees
payable by selected trusts and real estate investment trusts (“REITs”) that are listed on
the SGX-ST.
(3) Selected other relevant factors.
4.1 Rationale for the Proposed Development Management Fee Supplement
The Manager’s rationale for the Proposed Development Management Fee Supplement is set
out in paragraph 3.3 of the Circular.
4.2 Comparison of the Development Management Fee with Development Management
Fees payable by selected trusts and REITs that are listed on the SGX-ST
We have considered publicly available information for selected trusts and REITs that are
listed in Singapore.
We present in the table below, information on selected trusts and REITs listed in Singapore
that have development management agreements or arrangements. The list of selected trusts
and REITs presented in the table below is for illustration purpose only and is by no means
exhaustive.
Name of
Trust or REIT
Country of
Listing
Market
Cap(1)
(S$ Million)
Total
Assets(2)
(S$ Million)
Development
Management Fee Scope
Cambridge
Industrial Trust
(“CIT”)
Singapore 936.3 1,305.3 Up to 3.0% of total
project costs.(3)
Development management
services (including asset
enhancement initiatives)
including deal sourcing and
structuring, project
planning, control and
monitoring from conception
to completion, but does not
include refurbishment,
retrofitting and renovations.
Ascendas
REIT
(“A-REIT”)
Singapore 5,709.3 6,686.0 Up to 3.0% of total
project costs.(4)
(project costs
includes land cost,
no exceptions
noted)
Development management
services including deal
sourcing and structuring,
project planning, control
and monitoring from
conception to completion
but does not include
refurbishment, retrofitting
and renovations.
Mapletree
Logistics Trust
(“MLT”)
Singapore 2,845.5 2,774.8 3.0% of total project
costs.(5)
(project
costs includes land
cost, no exceptions
noted)
Development management
services including deal
sourcing and structuring,
project planning, control
and monitoring from
conception to completion
but does not include
refurbishment, retrofitting
and renovations.
52
Name of
Trust or REIT
Country of
Listing
Market
Cap(1)
(S$ Million)
Total
Assets(2)
(S$ Million)
Development
Management Fee Scope
Mapletree
Industrial Trust
(“MIT”)
Singapore 2,265.2 2,818.5 3.0% of total project
costs.(6)
Development of land, or
buildings, or part(s) thereof
on land which is acquired,
held or leased by MIT and
does not include
refurbishment, retrofitting
and renovations.
Ascendas
Hospitality
Trust
(“A-HREIT”)
Singapore 852.6 1,079.7 3.0% of total project
costs.(7)
(applicability
of land cost in
project cost is very
similar to that in
CIT’s Proposed
Development
Management
Supplement)
Development of land, or
buildings, or part(s) thereof
on land which is acquired,
held or leased by A-HREIT,
but does not include
refurbishment, retrofitting
and renovations.
Far East
Hospitality
Trust
(“Far East
H-REIT”)
Singapore 1,960.5 2,215.0 3.0% of total project
costs.(8)
(Total
project cost for Far
East H-REIT does
not reference land
costs)
Development of land, or
buildings, or part(s) thereof
on land which is acquired,
held or leased by Far East
H-REIT, including major
development,
re-development,
refurbishment, retrofitting,
addition and alteration and
renovations works.
Religare
Health Trust
Singapore 697.5 897.5 2.0% of total project
costs. (Total project
costs for Religare
Health Trust
excludes land costs
and interests costs)
Development or
redevelopment of medical
and healthcare assets
which are acquired or held
by the trust. This includes
any redevelopment
undertaken on the initial
portfolio after the listing
date.
Notes:
1. Market capitalisation as at 15 March 2013.
2. Total assets based on latest announced financial results as at 15 March 2013.
3. Where the market pricing for comparable management services is materially lower than the Development
Management Fee, the Manager shall reduce the Development Management Fee to match the lower market
pricing. In addition, where the estimated total project costs in respect of a Development Project exceed S$50
million, the amount of Development Management Fee to be paid to the Manager in respect of that
Development Project shall first be reviewed and approved by the Trustee and the Independent Directors.
Where the Trustee and the Independent Directors so direct, the Development Management Fee shall be
reduced accordingly.
4. Ascendas-MGM Funds Management Limited (“AMFM”), manager for A-REIT, will reduce the development
management fee to less than 3.0% of total project costs in cases where market pricing for comparable
services is materially lower. In addition, when the estimated total project cost is greater than S$100 million,
the trustee and the independent directors of AMFM will first review and approve the quantum of the
development management fee.
5. Mapletree Logistics Trust Management Limited (“MLTM”), manager for MLT, has the discretion to reduce the
development management fee to less than 3.0% of total project costs in cases where market pricing for
comparable services is materially lower. In addition, when the estimated total project cost is greater than
S$100 million, the trustee and the independent directors of MLTM will first review and approve the quantum
of the development management fee, and may direct MLTM to reduce the development management fee.
53
6. Mapletree Industrial Trust Management Limited (“MITM”), manager for MIT, has the discretion to reduce the
development management fee to less than 3.0% of total project costs in cases where market pricing for
comparable services is materially lower. In addition, when the estimated total project cost is greater than
S$100 million, the trustee and the independent directors of MITM will first review and approve the quantum
of the development management fee, whereupon MITM may be directed to reduce the development
management fee.
7. When the estimated total project costs are greater than S$200 million, The Trust Company (Asia) Limited (the
“A-HREIT Trustee”) and the independent directors of Ascendas Hospitality Fund Management Pte Ltd
(“AHFM”), manager for A-HREIT, will first review and approve the quantum of the development management
fee, whereupon AHFM may be directed by its board of directors to reduce the development management fee.
Approval to reduce the development management fee shall be obtained from the independent directors of
AHFM. Further, in cases where AHFM is of the view that the market pricing for comparable services is
materially lower than the development management fee, it shall have the discretion to accept a development
management fee which is less than 3.0% of the total project costs incurred in a development project
undertaken by AHFM on behalf of A-HREIT.
8. When the estimated total project costs are greater than S$100 million, DBS Trustee Limited (the “Far East
H-REIT Trustee”) and the independent directors of FEO Hospitality Asset Management Pte Ltd (“FHAM”),
manager for Far East H-REIT, will first review and approve the quantum of the development management fee,
whereupon the FHAM may be directed to reduce the development management fee. Further, in cases where the
market pricing for comparable services is, in FHAM’s view, materially lower than the development management
fee, FHAM will have the discretion to accept a development management fee which is less than 3.0% of the total
project costs incurred in a development project undertaken by FHAM on behalf of Far East H-REIT.
Based on table above, we note the following:
(i) All the 6 trusts or REITs use total project costs as a basis for calculation of development
management fees (“Comparable Property Trusts”).
(ii) For both A-REIT and MLT, the definition of land cost in total project costs excludes the
redevelopment provision3 found in the Proposed Development Management Supplement.
(iii) A-HREIT’s applicability of land cost in total project cost is very similar to that defined in
CIT’s Proposed Development Management Supplement.
(iv) We are not able to obtain MIT’s definition of total project costs from publicly available
information.
(v) We note that Far East H-REIT’s total project costs definition does not have any
reference to land costs.
(vi) We note that Religare Health Trust’s total project costs definition excludes the purchase
price of the land and financing costs relating to the development project. Furthermore,
Religare Health Trust’s development management fee is 2.0% of its definition of total
project costs.
(vii) The proposed Development Management Fee of up to 3.0% of total project costs is
within the range of development management fees paid by the Comparable Property
Trusts which ranges from 2.0% to 3.0%.
(viii) 3 of the 6 trusts or REITs are industrial trusts and they use total project costs as a basis
for calculation of development management fees (“Comparable Industrial Property
Trusts”). The proposed Development Management Fee of up to 3.0% of total project
costs is in line with the percentage paid by the Comparable Industrial Property Trusts.
3 For redevelopment of existing properties, land cost refers to all costs associated with land such as any payment of
additional premium or amounts to the regulatory authorities in connection with the redevelopment, but does not
include the value of the land. For avoidance of doubt, there will be no land cost component for land which has been
allocated at no cost to CIT for built-to-suit developments.
54
(ix) Based on our research of publicly available information, we note that both A-REIT and
MLT have comparable scope of services under its development management services
to that of CIT as provided under section 3.2 of this Circular.
(x) We note that the REITs such as, Cache Logistics Trust, Sabana Shari’ah Compliant
REIT and AIMS AMP Capital Industrial REIT are directly comparable to Cambridge
Industrial Trust in terms of size and sub sector focus. Based on publicly available
information, we are not aware of Cache Logistics Trust, Sabana Shari’ah Compliant
REIT or AIMS AMP Capital Industrial REIT undertaking development management for
their respective REITs and as such, we are not able to use these REITs for our
benchmarking purposes.
Based on our findings above, CIT’s definition of “total project costs” is within the range of
observable market practice. As such, CIT’s definition of “total project costs” is on normal
commercial terms and not prejudicial to the interests of CIT and its Unitholders who are not
interested persons. Our opinion on the entire Development Management Fee would
encompass the definition of “total project costs” as well as other relevant components of the
Development Management Fee.
We would like to highlight that, majority of the details of roles and responsibilities of the
development managers for the trusts and REITs listed in the table above are not publicly
available. Differences in roles and responsibilities of the development manager, in addition
to factors such as nature, size, complexity of the developments and regulatory environment
could be a reason for the differing fee structures.
4.3 Selected Other Relevant Factors
(i) Manager bears the upfront risk of Development Projects that fail to reach the
construction phase
The Development Management Fee will only be payable in respect of Development Projects
actually undertaken by the Trust. As such, the Manager will not charge a Development
Management Fee for sourcing and conducting feasibility studies on development
opportunities which do not eventually materialise into Development Projects. As such no
Development Management Fee will be payable should a Development Project be aborted
prior to commencement of construction. Therefore, the Manager bears the upfront risk in
respect of the Development Projects that fail to reach the construction phase.
(ii) Development Management Fees for project costs of up to S$50 million shall be
reviewed and approved by the ARCC
We note that where the estimated total project costs in respect of a Development Project is
up to S$50 million, the amount of Development Management Fee to be paid to the Manager
in respect of that Development Project shall be reviewed and approved by the ARCC.
(iii) Reduction of Development Management Fee under certain circumstances
We note that the Manager shall reduce the Development Management Fee to match the
lower market pricing in circumstances where market pricing for comparable management
services as determined by independent quantity surveyors is materially lower than the
Development Management Fee. To further safeguard Unitholders’ interests, standard
operating procedures for determining the competitiveness of the Development Management
Fee will also be put in place by the Manager in consultation with the Independent Directors.
This ensures that the Development Management Fee charged by the Manager is consistent
with market pricing for comparable services.
55
We also note that, the Trustee and the Independent Directors shall review and approve the
quantum of the Development Management Fee for any Development Project having total
project costs greater than S$50 million. Where the Trustee and the Independent Directors so
direct, the Development Management Fee shall be reduced accordingly. This specific
oversight role of the Trustee and the Independent Directors should ensure that the
Development Management Fee paid to the Manager for larger Development Projects is
commensurate to services provided by the Manager, taking into consideration the nature,
scale and complexity of the Development Project.
(iv) Manager is responsible for payment for development management services provided
by unrelated third party service provider(s) appointed by the Manager, if any
We note that the Manager may at its sole discretion appoint one or more unrelated third party
service providers to perform all or some of the development management services provided
that the Manager remains at all times responsible for the development management services
provided by the unrelated third party service provider(s) and the Manager shall be entitled to
the full Development Management Fee from CIT notwithstanding the appointment of such
unrelated third party service provider(s). For the avoidance of doubt, the payment of fees to
such unrelated third party service providers will be borne by the Manager and not by CIT.
(v) Application of Development Management Fee
We note that no acquisition fees and other additional fees will be paid to the Manager for
development management services which are rendered for Development Projects if the
Manager receives the Development Management Fee. For instance, if CIT invests in real
estate to be built on vacant land that has been approved for development or other
uncompleted property developments, CIT will pay to the Manager a Development
Management Fee for the Development Project. CIT will not have to pay the Manager an
acquisition fee in respect of its investment in the Development Project.
A Development Management Fee is chargeable for redevelopment of an existing property.
However, the Manager will not receive a Development Management Fee for activities
involving refurbishment, retrofitting and renovations.
(vi) Land Costs
For redevelopment of existing properties, land cost refers to all costs associated with land
such as any payment of additional premium or amounts to the regulatory authorities in
connection with the redevelopment, but does not include the value of the land. For avoidance
of doubt, there will be no land cost component for land which has been allocated at no cost
to CIT for built-to-suit developments.
5. PRINCIPAL TERMS OF THE PROPOSED PERFORMANCE FEE SUPPLEMENT TO THE
TRUST DEED
The Manager earns a performance fee if the total return (combining both capital performance
of a Unit and its reinvested income) of the Trust Index outperforms the total return of the
Benchmark Index, currently consisting of the eight largest REITs in Singapore. The
Performance Fee is calculated in two tiers based on a fixed percentage of the
outperformance multiplied by the equity market capitalisation of CIT. The Manager may opt
to receive the Performance Fees in Units or cash or a combination thereof.
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The below is extracted from the Circular:
“The Manager proposes to supplement the Trust Deed with the Performance Fee
Supplement, with the proposed changes summarised in the table below:
Relevant components of
the Performance Fee
calculation formula
Current Performance Fee
calculation formula
Proposed Performance Fee
calculation formula
Closing value of the
Benchmark Index4 for the
relevant Half Year
Based on the investible (i.e.
free float) market capitalisation
weightings of the securities
comprising the Benchmark
Index recorded on the
SGX-ST during the five
Business Days preceding the
last day of the relevant Half
Year (including the last day of
the relevant Half Year) and the
five Business Days after the
last day of the relevant Half
Year (10 Business Days in
total).
Based on the average of the
closing values of the Benchmark
Index for the 10 Business Days
preceding the last day of the
relevant Half Year (including the
last day of the relevant Half
Year).
The closing value of the
Benchmark Index for each
Business Day is based on the
investible (i.e. free float) market
capitalisation weightings of the
securities comprising the
Benchmark Index recorded on
the SGX-ST.
Closing value of the Trust
Index5 for the relevant Half
Year
Calculated based on the last
Business Day of the relevant
Half Year (i.e. one Business
Day only).
Calculated based on the average
of the closing values of the Trust
Index for the 10 Business Days
preceding the last day of the
relevant Half Year (including the
last day of the relevant Half
Year).
Additionally, if the Manager
believes that the above
calculation does not provide a
fair reflection of the closing value
of the Trust Index for that
Business Day, the closing value
shall be a value as determined
by the Independent Directors and
the Trustee (in consultation with
FTSE International Limited or
another approved index provider)
as being fair closing value of the
Trust Index for that Business
Day, in favour of CIT.
4 “Benchmark Index” means (a) 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 International Limited or
another index provider with similar capabilities; or (b) such other index as may be chosen in accordance with Clause
15 of the Trust Deed.
5 “Trust Index” means the performance tracking index for CIT, as calculated by FTSE or another index provider with
similar capabilities, as appointed by the Manager, in consultation with the Trustee. The Trust Index measures the total
return of CIT, combining both capital performance of the security and its reinvested income.
57
Relevant components of
the Performance Fee
calculation formula
Current Performance Fee
calculation formula
Proposed Performance Fee
calculation formula
VWAP for a Unit (used to
calculate the equity market
capitalisation of CIT)
Based on all trades on the
SGX-ST in the ordinary course
of trading during the five
Business Days preceding the
last day of the Half Year and
the five Business Days after
the last day of the relevant
Half Year (10 Business Days
in total).
Based on all trades on the
SGX-ST in the ordinary course of
trading during the 10 Business
Days preceding the last day of
the Half Year (including the last
day of the relevant Half Year).
Additionally, if the Manager
believes that the above
calculation does not provide fair
reflection of the VWAP of a Unit,
an amount as determined by the
Independent Directors and the
Trustee (after consultation with
an approved stockbroker) as
being the fair VWAP of a Unit in
favour of CIT.
Issue Price of the relevant
Units to be issued to the
Manager as payment for
Performance Fees (if any)
The greater of (a) the VWAP
for a Unit for all trades on the
SGX-ST in the ordinary course
of trading during the five
Business Days preceding the
last day of the relevant Half
Year (including the last day of
the relevant Half Year) and the
five Business Days after the
last day of the relevant Half
Year (10 Business Days in
total) and (b) Value of the
Deposited Property divided by
the number of Units in
issue/deemed to be in issue at
the end of the Half Year.
The greater of (a) the VWAP for
a Unit for all trades on the
SGX-ST in the ordinary course of
trading during the 10 Business
Days preceding the last day of
the relevant Half Year (including
the last day of the relevant Half
Year), or if the Manager believes
that the above calculation does
not provide fair reflection of the
VWAP of a Unit, an amount as
determined by the Independent
Directors and the Trustee (after
consultation with an approved
stockbroker) as being the fair
VWAP of a Unit and (b) Current
Unit Value6 at the end of the Half
Year.”
“Note that instances where the values of the Trust Index and the VWAP of a Unit not being
reflective of the fair values or VWAP (as the case may be) are limited to very rare occasions
(such as acts of market manipulation or error trades that might cause an abnormal reflection
of the closing value of the Units).”
“The Manager will only use the “recourse options” if it believes that the daily value of the
Trust Index or the VWAP of a Unit for the reference period are higher than the fair closing
values of the Trust Index and VWAP. Therefore, the Manager will only use the “recourse
options” to adjust the quantum of the Performance Fee lower and not higher, such that the
adjustments will only be made in the interests of CIT and ultimately, the Unitholders.”
6 “Current Unit Value” means at any time the Net Asset Value of the Deposited Property at that time divided by the
number of Units in issue and deemed to be in issue at that time.
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“The Manager may at its sole discretion waive, partially or fully, its Performance Fees if the
Manager finds the Performance Fee to be overstated, so as to reflect the impact of the fair
market pricing for all closing values relating to the calculation of the Performance Fees.”
Based on the above, the Proposed Performance Fee Supplement in essence revises the
current performance fee calculation and payment as follows:
(i) aligning the reference time-period for the calculations of the values of (aa) the
Benchmark Index for Performance Fees calculation, (bb) the Trust Index for
Performance Fees calculation, (cc) the calculated VWAP for a Unit used to determine
the market capitalisation for Performance Fees calculation, and (dd) Issue Price for
Performance Fees payment (the “Reference Time-period”);
(ii) the Reference Time-period being 10 Business Days preceding the last day of the
relevant Half Year (including the last day of the relevant Half Year) (the “10-day Prior
Time-period”);
(iii) the number of Units to be issued as Performance Fee will be determined based on the
issue price of the Units which is the greater of (i) the VWAP for a Unit for all trades on
the SGX-ST during the 10-day Prior Time-period, and (ii) the Current Unit Value (i.e. the
Net Asset Value per Unit) (the “Issue Price Formula”); and
(iv) if the Manager believes that the calculation for the Trust Index value (for Performance Fee
calculation) or calculated VWAP for a Unit (used to calculate VWAP for a Unit used to
determine the market capitalisation for Performance Fees calculation and for Issue Price
for Performance Fees payment) do not provide a fair reflection of the closing value of the
Trust Index for that Business Day, or does not provide a fair reflection of the market price
of a Unit, such value or market price shall be a value or a market price as determined by
the Independent Directors and the Trustee (after consultation with FTSE International
Limited or another index provider approved by the Manager and Trustee or stockbroker
approved by the Trustee, as the case may be), as being the fair closing value of the Trust
Index for that Business Day or the fair market price of a Unit (the “Recourse Option”). The
Manager will only use the Recourse Options in respect of the Trust Index value (for
Performance Fee calculation) and VWAP for a Unit used to determine the market
capitalisation (for Performance Fees calculation), to adjust the quantum of the
Performance Fee lower and not higher, such that the adjustments will only be made in the
interests of CIT and ultimately, the Unitholders. Furthermore, the Manager may at its sole
discretion waive, partially or fully, its Performance Fees if the Manager finds the
Performance Fee to be overstated, so as to reflect the impact of the fair market pricing
for all closing values relating to the calculation of the Performance Fees.
6. EVALUATION OF THE PROPOSED PERFORMANCE FEE SUPPLEMENT
In reaching our recommendation in respect of the Proposed Performance Fee Supplement,
we have given due consideration to the following factors:
(1) Rationale for the Proposed Performance Fee Supplement.
(2) Comparison of the Reference Time-period and 10-day Prior Time-period with
comparable terms for performance fee calculation of selected property funds, trusts and
REITs listed in Singapore and Australia.
(3) Comparison of the Issue Price Formula and the Recourse Option for determining the Unit
market price for Issue Price calculation (for Performance Fee payment), with comparable
terms of issue price calculation of selected trusts and REITs listed in Singapore.
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(4) Comparison of the Recourse Option for determining the Trust Index value (for
Performance Fee calculation) and calculated VWAP for a Unit used to determine the
market capitalisation (for Performance Fees calculation) with selected trusts and REITs
in Singapore.
(5) Selected other factors.
6.1 Rationale for the Proposed Performance Fee Supplement
The full text of the Manager’s rationale for the Proposed Performance Fee Supplement is set
out in paragraph 4.2 of the Circular.
6.2 Comparison of the Reference Time-period and 10-day Prior Time-period with
comparable terms for performance fees calculation of selected property funds, trusts
and REITs listed in Singapore and Australia
We have considered publicly available information for selected property funds, trusts and
REITs that are listed in Singapore, Malaysia, Hong Kong, Australia and New Zealand. Based
on our research of public information, we note that selected property funds, trusts and REITs
listed in Singapore and Australia, do have comparable terms in their performance fees
calculation to compare with the Reference Time-period and 10-day Prior Time-period
proposed in the Proposed Performance Fee Supplement. We note that property funds,
trusts and REITs in Singapore would generally provide for a performance fee
component for their respective managers; however we note that only CitySpring
Infrastructure Trust and Starhill Global REIT calculate their performance fees on
comparable terms as that in the Proposed Performance Fee Supplement, using
Benchmark Index and Trust Index.
We present in the table below, information on selected property funds, trusts and REITs listed
in Singapore and Australia that have comparable terms in their performance fees
calculation to compare with the Reference Time-period and 10-day Prior Time-period
proposed in the Proposed Performance Fee Supplement. The list of selected property funds,
trusts and REITs presented in the table below is for illustration purpose only and is by no
means exhaustive.
Name of
Property Fund,
Trust or REIT
Reference Time-Period
Trust Index/Unit Price Benchmark Index Market Capitalisation
Singapore property funds, trusts and REITs
Cambridge
Industrial Trust
Average of the 10
Business Days
preceding the last day
of the relevant Half
Year (including the last
day of the relevant Half
Year).
Average of the 10
Business Days
preceding the last day
of the relevant Half
Year (including the last
day of the relevant Half
Year).
The VWAP for a unit
based on all trades on
the SGX-ST, in the
ordinary course of
trading, during the 10
Business Days
preceding the last day
of the relevant Half
Year (including the last
day of the relevant Half
Year) multiplied by the
number of Units on
issue at the close of
the last day of the prior
Half Year.
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Name of
Property Fund,
Trust or REIT
Reference Time-Period
Trust Index/Unit Price Benchmark Index Market Capitalisation
CitySpring
Infrastructure
Trust
Based on the average
daily closing value over
the last 15 trading
days of the quarter.
Based on the average
daily closing value over
the last 15 trading
days of the quarter.
The weighted average
number of units on
issue at closing during
the last 15 trading
days of the quarter
multiplied by the VWAP
trading price of all
units traded on the
SGX-ST over those 15
trading days.
Starhill Global
REIT
N.A The VWAP of the
securities comprising
the benchmark index
recorded on the SGX-
ST, during the 5
business days
preceding the last day
of the relevant half
year (including the last
day of the relevant half
year) and the 5
business days after the
last day of the relevant
half year.
The VWAP for a unit
for all trades on the
SGX-ST in the ordinary
course of trading
during the 5 business
days preceding the last
day of the relevant
half-year (including the
last day of the relevant
half year), and the 5
business days after the
last day of the relevant
half year (10 business
days in total),
multiplied by the
number of units on
issue at the close of
the last day of the prior
half year.
Australian property funds, trusts and REITs
Colonial First
State Retail
Property Trust
20-day VWAP. 20-day VWAP. N.A(1)
Commonwealth
Property Office
Fund
20-day VWAP. 20-day VWAP. N.A(1)
Source: Prospectuses, company circulars and annual reports.
Notes:
1. Outperformance basis is based on gross asset value.
Based on the table above, we note the following:
(i) CitySpring Infrastructure Trust uses a uniform reference time-period for the trust index
benchmark index and market capitalisation, similar to the Proposed Performance Fee
Supplement. However CitySpring Infrastructure Trust uses a 15-day reference time-
period instead of the 10-day Prior Time-period.
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(ii) Starhill Global REIT adopts a uniform reference time-period for its benchmark index and
market capitalisation but not for its trust index. Starhill Global REIT’s reference
time-period is similar to CIT’s currently existing reference time-period.
(iii) Colonial First State Retail Property Trust and Commonwealth Property Office Fund use
a 20-day VWAP as the reference time period for both the trust index and the benchmark
index. Colonial First State Retail Property Trust and Commonwealth Property Office
Fund do not use market capitalisation in the calculation of Performance Fees and as
such, there is no comparable data. We would like to highlight that not all details on the
trust index and benchmark index reference time periods, for the property funds, trusts
or REITs, are publicly available.
6.3 Comparison of the Issue Price Formula and the Recourse Option for determining the
Unit market price for Issue Price calculation (for Performance Fee payment), with
comparable terms of issue price calculation of REITs listed in Singapore.
We have considered publicly available information for selected REITs that are listed in
Singapore. Based on our research of public information, we note that selected trusts and
REITs listed in Singapore do have comparable terms in their issue price calculation (for
Performance Fee payment) to compare with the Issue Price Formula proposed in the
Proposed Performance Fee Supplement.
We present in the table below, information on selected REITs listed in Singapore that have
comparable terms in their issue price calculation (for Performance Fee payment) to compare
with the Issue Price Formula in the Proposed Performance Fee Supplement. The list of
selected REITs presented in the table below is for illustration purpose only and is by no
means exhaustive.
Name of Trusts and REITs
Issue price of Units based on 10
Business Day VWAP
immediately preceding the end
of the relevant period Recourse Options
Cambridge Industrial Trust The issue price will be the greater
of the 10 Business Day VWAP
and the trust’s Current Unit Value
at the end of the Half Year
Recourse option(1)
AIMS AMP Capital Industrial REIT u Recourse Options(2)
Ascendas Hospitality Trust u Recourse Options(2)
Ascendas REIT u Recourse Options(2)
Ascott Residence Trust N.A(3) Recourse Options(2)
Cache Logistics Trust u Recourse Options(2)
CapitaCommercial Trust u Recourse Options(2)
CapitalRetail China Trust u N.A
CapitaMall Trust u Recourse Options(2)
CDL Hospitality Trust u N.A
Far East Hospitality Trust u Recourse Options(2)
First REIT u Recourse Options(2)
Fortune REIT u Recourse Options(2)
Frasers Centrepoint Trust u Recourse Options(2)
Frasers Commercial Trust u Recourse Options(2)
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Name of Trusts and REITs
Issue price of Units based on 10
Business Day VWAP
immediately preceding the end
of the relevant period Recourse Options
K-REIT Asia u Recourse Options(2)
Lippo Malls Indonesian Retail Trust u Recourse Options(2)
Mapletree Commercial Trust u Recourse Options(2)
Mapletree Industrial Trust u Recourse Options(2)
Mapletree Logistics Trust u Recourse Options(2)
Parkway Life REIT u Recourse Options(2)
Sabana Shari’ah Compliant REIT u Recourse Options(2)
Saizen REIT u Recourse Options(2)
Starhill Global REIT The issue price will be the greater
of the 10 Business Day VWAP
and the value of trust property per
unit at the end of the half year.(4)
N.A
Suntec REIT u Recourse Options(2)
Notes:
1. If the Manager believes that the VWAP per Unit for all trades on the SGX-ST in the ordinary course of trading
during the 10 Business Days preceding the last day of the Half Year (including the last day of the relevant Half
Year), does not provide a fair reflection of the market price of a Unit, an amount as determined by the
Independent Directors and the Trustee (after consultation with a stockbroker approved by the Trustee), as
being the fair market price of a Unit.
2. If the manager believes that the VWAP per unit for all trades on the SGX-ST for the period of 10 business days
immediately preceding the end of the period, but including the last day of the period, does not provide a fair
reflection of the market price of a unit, an amount as determined by the manager and the Trustee (after
consultation with a stockbroker approved by the Trustee), as being the fair market price of the unit.
3. The issue price is determined based on the VWAP price per unit for all trades done on SGX-ST in the ordinary
course of trading for 5 business days immediately preceding the respective date of issue of the new units.
4. The issue price is based on the VWAP for a unit for all trades on the SGX-ST in the ordinary course of trading
during the 5 business days preceding the last day of the relevant half year, including the last day of the
relevant half year and the 5 business days after the last day of the relevant half year (10 business days in
total).
Based on the table above, we note the following:
(i) 22 of the 24 REITs reviewed calculate issue price of units (for Performance Fee
payment) based on the 10 Business Day VWAP immediately preceding the end of the
relevant period. This is consistent with CIT’s proposed method of calculating issue price
of units (for Performance Fee payment).
(ii) Ascott Residence Trust calculates issue price of units (for Performance Fee payment)
based on trailing 5 day VWAP.
(iii) Starhill Global REIT calculates issue price (for Performance Fee payment) based on the
VWAP during the 5 business days before and 5 business days after relevant half year
(10 business days in total).
(iv) Starhill Global REIT is the only REIT in the sample to have a “greater of” provision in
its issue price formula (for Performance Fee payment), similar to CIT’s, although CIT’s
provision references Current Unit Value (i.e. the Net Asset Value per Unit) while Starhill
Global REIT’s provision references the value of trust property per unit which is similar
to CIT’s currently existing formula.
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(v) 21 of the 24 REITs have a “recourse option” whereby if the manager believes that the
VWAP of the preceding 10 days before the end of the period, but including the last day
of the period, does not provide a fair reflection of the market price of a unit, an amount
as determined by the manager and the Trustee (after consultation with a stockbroker
approved by the Trustee), as being the fair market price of a unit. CIT’s trust deed does
not currently contain such a “recourse option” in relation to the Performance Fee but the
Manager has proposed such a “recourse option” in its Proposed Performance Fee
Supplement.
Please note that the Recourse Option for determining the Unit market price for Issue Price
calculation (for Performance Fee payment) is a mechanism which is intended to provide a
fair reflection of unit price and as such, it is not meant to be advantageous or
disadvantageous to either Unitholders or the Manager. However, as any adjustment will have
to be as directed by the Independent Directors and the Trustee (after consultation with an
approved stockbroker), this Recourse Option should be on normal commercial terms and not
prejudicial to the interests of Unitholders who are not interested persons.
6.4 Comparison of the Recourse Option for determining Trust Index value (for
Performance Fee calculation) and calculated VWAP for a Unit used to determine the
market capitalisation (for Performance Fee calculation) with selected trusts and REITs
in Singapore
We have considered publicly available information for selected trusts and REITs that are
listed in Singapore. We present in the table below, information on selected trusts and REITs
listed in Singapore and the availability of recourse options when determining the closing
value of the trust index (for Performance Fee calculation) and calculated VWAP for a Unit
used to determine the market capitalisation (for Performance Fee calculation). The list of
selected trusts and REITs presented in the table below is for illustration purpose only and is
by no means exhaustive.
Name of Trust or REIT
Recourse Option for Trust Index and
calculation of VWAP for a Unit used to
determine the market capitalisation
Cambridge Industrial Trust u(1)(2)
CitySpring Infrastructure Trust N.A.
Starhill Global REIT N.A.
Notes:
1. If the Manager believes that the calculation for the Trust Index does not provide a fair reflection of the closing
value of the Trust Index for that Business Day, the closing value shall be a value as determined by the
Independent Directors and the Trustee (after consultation with FTSE International Limited or another index
provider approved by the Manager and Trustee), as being the fair closing value of the Trust Index for that
Business Day.
2. The Manager will only use the “recourse options” to adjust the quantum of the Performance Fee lower and
not higher, such that the adjustments will only be made in the interests of CIT and ultimately, the Unitholders.
Furthermore, the Manager may at its sole discretion waive, partially or fully, its Performance Fees if the
Manager finds the Performance Fee to be overstated, so as to reflect the impact of the fair market pricing for
all closing values relating to the calculation of the Performance Fees.
Based on the table above, we note the following:
(i) Only CitySpring Infrastructure Trust and Starhill Global REIT have been included as
they are the only trust and REIT listed in Singapore that base their performance fee
calculation on total returns or accumulated returns respectively of their respective trust
indices against their respective benchmark indices.
64
(ii) From the table above, if the Proposed Performance Fee Supplement is approved and
implemented, CIT will be the only REIT (or trust listed above) to have recourse options
for determining the trust index value (for Performance Fee calculation) and calculation
of VWAP for a Unit used to determine the market capitalisation (for Performance Fees
calculation).
Please note that the recourse option for Trust Index and calculation of VWAP for a Unit used
to determine the market capitalisation will only be used to adjust the quantum of the
Performance Fee lower and not higher, such that the adjustments will only be made in the
interests of CIT and ultimately, the Unitholders.
6.5 Selected other factors
(i) The Issue Price Formula reduces the potential issue price (for Performance Fee
payment) but not below that of the VWAP of Units in the preceding 10 days immediately
before the end of the half year
The current formula in calculating the Issue Price (for Performance Fee payment) based on
Deposited Property7 per Unit would result in a higher Issue Price (for Performance Fee
payment) than that estimated based on Current Unit Value8. However, the issue price (for
Performance Fee payment) cannot be lower than the VWAP of Units in the preceding 10 days
immediately before the end of the half year.
(ii) The Issue Price Formula encourages the Manager to elect to structure the payment of
the Performance Fee wholly or partially in Units
Manager has the discretion to structure the payment of the Performance Fee in the form of
cash or Units or a combination of both cash and Units.
The current formula in calculating the Issue Price (being the greater of (i) the VWAP for a
Unit for all trades on the SGX-ST in the ordinary course of trading during the 5 Business Days
preceding the last day of the relevant Half Year (including the last day of the relevant Half
Year) and the 5 Business Days after the last day of the relevant Half Year (10 Business Days
in total) and (ii) Deposited Property divided by the number of Units), and consequently the
number of Units to be issued for Performance Fee payment, would very likely result in the
issue price based on Deposited Property divided by the number of Units (i.e. total assets per
Unit). This would likely be a relatively high Issue Price (compared to market price) and
compels the Manager to elect to structure the payment of the Performance Fee in cash. The
proposed Issue Price Formula (being the greater of (i) the VWAP for a Unit for all trades on
the SGX-ST during the 10-day period before the end of the relevant half year, and (ii) the
Current Unit Value) would likely result in the Issue Price (for Performance Fee payment)
either at market price or a slight premium to market price which would be more attractive to
the Manager and consequently encourages the Manager to elect to structure the payment of
the Performance Fee wholly or partially in Units.
Should the Manager elect to structure the payment of the Performance Fee wholly or partially
in Units, there will be more cash available in CIT for distribution or re-investment.
7 Deposited Property means “All the assets of CIT, including all its Authorized Investments for the time being held or
deemed to be held upon the trusts of the Trust Deed”. As such, “the value of the Deposited Property divided by the
number of Units” is effectively “total assets per Unit”.
8 Current Unit Value (i.e. Net Asset Value of Deposited Property) refers to “At any time the Value of the Deposited
Property, less the Liabilities”. As such “the Current Unit Value divided by the number of Units” is effectively “net assets
value per Unit”.
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(iii) Recourse Option is determined by the Independent Directors and the Trustee
CIT’s Recourse Option is determined by the Independent Directors and the Trustee, after
consultation with FTSE International Limited or another index provider approved by the
Manager and Trustee or stockbroker approved by the Trustee, as the case may be. This is
a safeguard to ensure that the Recourse Option will be on normal commercial terms and not
prejudicial to interests of CIT and its Unitholders who are not interested persons.
(iv) Recourse Option for Trust Index value (Performance Fee calculation) or the VWAP for
a Unit to determine the market capitalisation (for Performance Fee calculation) only in
favour of CIT and the Unitholders
The Manager will only use the Recourse Option in respect of the Trust Index value (for
Performance Fee calculation) and VWAP for a Unit used to determine the market
capitalisation (for Performance Fees calculation), if it believes that the daily value of the Trust
Index or the VWAP of a Unit for the reference period are higher than the fair closing values
of the Trust Index and VWAP. Therefore, the Manager will only use the Recourse Options to
adjust the quantum of the Performance Fee lower and not higher, such that the adjustments
will only be made in the interests of CIT and ultimately, the Unitholders.
(v) Manager may at its sole discretion waive, partially or fully, its Performance Fees
The Manager may at its sole discretion waive, partially or fully, its Performance Fees if the
Manager finds the Performance Fee to be overstated, so as to reflect the impact of the fair
market pricing for all closing values relating to the calculation of the Performance Fees.
7. OUR RECOMMENDATIONS
In arriving at our recommendation, we have taken into account the factors which we consider
have a significant bearing on our assessment of the Proposed Development Management
Fee Supplement including:
1. the rationale for the Proposed Development Management Fee Supplement;
2. the Development Management Fee is within the range of development management
fees paid by the Comparable Property Trusts;
3. the Development Management Fee is in line with the development management fees
paid by the Comparable Industrial Property Trusts;
4. the Development Management Fee will only be payable in respect of Development
Projects actually undertaken by the Trust. As such, the Manager will not charge a
Development Management Fee for sourcing and conducting feasibility studies on
development opportunities which do not eventually materialise into Development
Projects;
5. the Manager will not receive any Development Management Fee for Development
Projects that are aborted prior to the construction phase;
6. the Manager will reduce the Development Management Fee to the lower market pricing
for circumstances where market pricing for comparable management services as
determined by independent quantity surveyors is materially lower;
7. standard operating procedures for determining the competitiveness of the Development
Management Fee will also be put in place by the Manager in consultation with the
Independent Directors to further safeguard Unitholders’ interests;
66
8. Development Management Fees for project costs of up to S$50 million shall be
reviewed and approved by the ARCC;
9. for any Development Project having total project costs greater than S$50 million, the
Trustee and the Independent Directors shall review and approve the quantum of the
Development Management Fee and where the Trustee and the Independent Directors
so direct, the Development Management Fee shall be reduced accordingly;
10. the Manager is responsible for payment of fees to unrelated third party service
providers which are appointed by the Manager to perform all or some of the
development management services;
11. no acquisition fees and other additional fees will be paid to the Manager for
development management services which are rendered for Development projects if the
Manager receives the Development Management Fee;
12. a Development Management Fee is chargeable for redevelopment of an existing
property;
13. the Manager will not receive a Development Management Fee for activities involving
refurbishment, retrofitting and renovations;
14. the Development Management Fee will be charged with effect from the date of
amendment to the Trust Deed (assuming Unitholders’ approval is obtained at the EGM)
on a pro rata basis over the remaining construction period of current Development
Projects. However, in respect of the current Development Project at 88 International
Road, the Manager has agreed to waive the Development Management Fee because
the project is nearing completion. Save for the abovementioned project at 88
International Road, there are no other current projects undergoing development as of
the Latest Practicable Date; and
15. for redevelopment of existing properties, land cost refers to all costs associated with
land such as any payment of additional premium or amounts to the regulatory
authorities in connection with the redevelopment, but does not include the value of the
land. For avoidance of doubt, there will be no land cost component for land which has
been allocated at no cost to CIT for built-to-suit developments.
In arriving at our recommendation, we have taken into account the factors which we consider
have a significant bearing on our assessment of the Proposed Performance Fee Supplement
including:
1. the rationale for the Proposed Performance Fee Supplement;
2. while the comparables are limited, the analysis undertaken in Section 6.2 indicates that
it is commercially acceptable to (i) align the Reference Time-period for Benchmark
Index, Trust Index and VWAP per Unit used for market capitalisation calculations, and
(ii) use the 10-day Prior Time-period;
3. 22 of the 24 REITs reviewed calculate issue price of units (for Performance Fee
payment) based on the 10 Business Day VWAP immediately preceding the end of the
relevant period. This is consistent with CIT’s proposed method of calculating issue price
of units (for Performance Fee payment);
4. Starhill Global REIT is the only REIT in the sample to have a “greater of” provision in
its issue price formula (for Performance Fee payment), similar to CIT’s, although CIT’s
proposed provision (under the Proposed Performance Fee Supplement) references to
67
Current Unit Value (i.e. The Net Asset Value per Unit) while Starhill Global REIT’s
provision references to the value of trust property per unit which is similar to CIT’s
currently existing formula;
5. if the Proposed Performance Fee Supplement is approved and implemented, CIT will be
the only REIT or trust to have Recourse Options for determining the trust index value
(for Performance Fees calculation) and calculation of VWAP for a Unit used to
determine the market capitalisation (for Performance Fees calculation);
6. the Issue Price Formula reduces the potential issue price (for Performance Fee
payment) but not below that of the VWAP of Units in the preceding 10 days before the
end of the half year;
7. the Issue Price Formula encourages the Manager to elect to structure the payment of
the Performance Fee wholly or partially in Units, which would result in more cash
available in CIT for distribution or re-investment;
8. CIT’s Recourse Option is determined by the Independent Directors and the Trustee,
after consultation with FTSE International Limited or another index provider approved
by the Manager and Trustee or stockbroker approved by the Trustee, as the case may
be. This is a safeguard to ensure that the Recourse Option will be on normal commercial
terms and not prejudicial to interests of CIT and its Unitholders who are not interested
persons;
9. Recourse Option for Trust Index value (Performance Fee calculation) or the VWAP for
a Unit to determine the market capitalisation (for Performance Fee calculation) only in
favour of CIT and the Unitholders; and
10. Manager may at its sole discretion waive, partially or fully, its Performance Fees.
Having considered the above and subject to the assumptions and qualifications set out
herein and taking into account the prevailing conditions as at the Latest Practicable Date, we
are of the opinion that the Proposed Development Management Fee Supplement and the
Proposed Performance Fee Supplement are on normal commercial terms and will not be
prejudicial to CIT and its Unitholders who are not interested persons. Accordingly, we advise
that the Independent Directors recommend that the Unitholders vote in favour of the
Proposed Development Management Fee Supplement and the Proposed Performance Fee
Supplement.
Our recommendations are addressed to the Independent Directors for their benefit, in
connection with and for the purposes of their consideration of the Proposed Development
Management Fee Supplement and the Proposed Performance Fee Supplement. Any
recommendations made by the Independent Directors in respect of the Proposed
Development Management Fee Supplement and the Proposed Performance Fee
Supplement shall remain their responsibility.
Our recommendations are governed by the laws of Singapore and are strictly limited to the
matters stated herein and does not apply by implication to any other matter.
Yours faithfully,
Deloitte & Touche Corporate Finance Pte Ltd
Andrew Ooi
Executive Director
68
APPENDIX E
INTERESTED PERSON TRANSACTIONS AND
INTERESTED PARTY TRANSACTIONS ENTERED INTO BY CIT
Interested person transactions and interested party transactions (collectively referred to as
“IPTs”) entered into by CIT during the financial year ended 31 December 2012 (“FY2012”) and the
period from 1 January 2013 to the Latest Practicable Date are as follows:
Interested persons/parties
IPTs forFY2012
(S$ million)
IPTs for the periodfrom 1 Jan 2013
to the LatestPracticable Date
(S$ million)
Cambridge Industrial Trust Management Limited(the Manager)
Management fees paid and payable 5.9 1.1
Performance fees paid and payable 3.6 –
Acquisition fee paid relating to the purchase ofinvestment properties 1.7 0.9
Disposal fee paid relating to the divestment ofinvestment properties 0.1 –
Cambridge Industrial Property Management Pte.Ltd. (Subsidiary of immediate holding companyof the Manager)
Property Manager’s fees paid and payable 2.7 0.5
Lease marketing services commission paid andpayable 0.2 0.03
Project management fees paid and payable 0.8 0.1
RBC Investor Services Trust Singapore Limited(the Trustee of Cambridge Industrial Trust)
Trustee fees paid and payable 0.3 0.06
Oxley Opportunity #9 Pte. Ltd.(Related company of the Manager)(Note a)
Acquisition of 25 Pioneer Crescent Singapore628554 15.3 −
National Australia Bank Limited(Related company of the Manager)(Note b)
Net loan disbursed/(repaid) 34.1 (15.0)
Loan transaction costs paid and payable 1.0 –
Commitment fee paid and payable 0.4 0.1
Interest expense paid and payable 5.3 1.0
Notes:
a. Oxley Opportunity #9 Pte. Ltd., which is a subsidiary of the Oxley Global Limited (“Oxley Global”) (formerly known
as Oxley Holdings Limited), is related to the Manager by virtue of Oxley Global’s deemed equity interest in the
Manager of 24%.
b. National Australia Bank Limited (“NAB”) is the ultimate holding company of nabInvest Capital Partners Pty Limited
(“nabInvest Capital”). NAB is hence related to the Manager by virtue of nabInvest Capital’s deemed equity interest
of 56% in the Manager.
69
CAMBRIDGE INDUSTRIAL TRUST(A unit trust constituted in the Republic of Singapore
pursuant to a trust deed dated 31 March 2006 (as amended))
NOTICE OF EXTRAORDINARY GENERAL MEETING
NOTICE IS HEREBY GIVEN that an EXTRAORDINARY GENERAL MEETING of the holders of
units of Cambridge Industrial Trust (“CIT”, and the holders of units of CIT, “Unitholders”) will be
held at NTUC Auditorium, Level 7, NTUC Centre, One Marina Boulevard, Singapore 018989 on 19
April 2013 at 2.30 p.m. (or as soon thereafter following the conclusion/adjournment of the Annual
General Meeting of CIT to be held at 2.00 p.m. on the same day and at the same place) to consider
and, if thought fit, to pass, with or without any modifications, the following resolutions:
EXTRAORDINARY RESOLUTION 1: THE PROPOSED UNIT ISSUE SUPPLEMENT TO THE
TRUST DEED
That:
(a) approval be and is hereby given to amend CIT’s trust deed dated 31 March 2006 (as
amended) (the “Trust Deed”) with the Unit Issue Supplement (as defined in the circular to
Unitholders dated 25 March 2013 (the “Circular”)) in the manner set out in Appendix A to the
Circular; and
(b) Cambridge Industrial Trust Management Limited, as manager of CIT (the “Manager”) and
RBC Investor Services Trust Singapore Limited, as trustee of CIT (the “Trustee”) be and are
hereby authorised to complete and do all such acts and things (including executing all such
documents as may be required) as the Manager or, as the case may be, the Trustee may
consider expedient or necessary or in the interest of CIT to give effect to the Unit Issue
Supplement.
EXTRAORDINARY RESOLUTION 2: THE PROPOSED DEVELOPMENT MANAGEMENT FEE
SUPPLEMENT TO THE TRUST DEED
That:
(a) approval be and is hereby given to amend the Trust Deed with the Development
Management Fee Supplement (as defined in the Circular) in the manner set out in Appendix
B to the Circular; and
(b) the Manager and the Trustee be and are hereby authorised to complete and do all such acts
and things (including executing all such documents as may be required) as the Manager or,
as the case may be, the Trustee may consider expedient or necessary or in the interest of
CIT to give effect to the Development Management Fee Supplement.
EXTRAORDINARY RESOLUTION 3: THE PROPOSED PERFORMANCE FEE SUPPLEMENT
TO THE TRUST DEED
That:
(a) approval be and is hereby given to amend the Trust Deed with the Performance Fee
Supplement (as defined in the Circular) in the manner set out in Appendix C to the Circular;
and
70
(b) the Manager and the Trustee be and are hereby authorised to complete and do all such acts
and things (including executing all such documents as may be required) as the Manager or,
as the case may be, the Trustee may consider expedient or necessary or in the interest of
CIT to give effect to the Performance Fee Supplement.
BY ORDER OF THE BOARD
Cambridge Industrial Trust Management Limited
(Company Registration No.: 200512804G, Capital Markets Services Licence No.: CMS 100132-2)
As manager of Cambridge Industrial Trust
Christopher Calvert
Chief Executive Officer and Executive Director
Singapore
25 March 2013
Important Notice:
The value of Units and the income derived from them may fall as well as rise. Units are not
investments or deposits in, or liabilities or obligations of the Manager, the Trustee, or any of their
respective related corporations and affiliates.
An investment in Units is subject to equity investment risk, including the possible delays in
repayment and loss of income or the principal amount invested. Neither CIT, the Manager, the
Trustee nor any of their affiliates guarantees the repayment of any principal amount invested, the
performance of CIT, any particular rate of return from investing in CIT, or any taxation
consequences of an investment in CIT. Any indication of CIT performance returns is historical and
cannot be relied on as an indicator of future performance.
Investors should note that they will have no right to request the Manager to redeem or purchase
their Units for so long as the Units are listed on the SGX-ST. It is intended that Unitholders may
only deal in their Units through trading on the SGX-ST. Listing of the Units on the SGX-ST does
not guarantee a liquid market for the Units.
Notes:
1. A Unitholder entitled to attend and vote at the Extraordinary General Meeting is entitled to appoint not more than
two proxies to attend and vote in his/her stead. A proxy need not be a Unitholder.
2. The proxy form must be lodged at the CIT’s Unit Registrar’s office at 63 Cantonment Road, Singapore 089758 not
less than 48 hours before the time fixed for the Extraordinary General Meeting.
3. Where a Unitholder appoints more than one proxy, the appointments shall be invalid unless he/she specifies the
proportion of his/her holding (expressed as a percentage of the whole) to be represented by each proxy.
71
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CAMBRIDGE INDUSTRIAL TRUST(A unit trust constituted in the Republic of Singapore
pursuant to a trust deed dated 31 March 2006
(as amended))
PROXY FORM
Extraordinary General Meeting
IMPORTANT:1. For investors who have used their CPF monies to buy units
in Cambridge Industrial Trust, this Circular is forwarded tothem at the request of their Agent Banks and is sent solelyFOR THEIR INFORMATION ONLY.
2. This Proxy Form is not valid for use by CPF investors andshall be ineffective for all intents and purposes if used or ispurported to be used by them.
3. CPF investors who wish to attend the Extraordinary GeneralMeeting as OBSERVERS must submit their requeststhrough their respective Agent Banks so that their AgentBanks may register, in the required format, with the UnitRegistrar of Cambridge Industrial Trust within the time framespecified. If they also wish to vote, they must submit theirvoting instructions to the Agent Bank within the time framespecified to enable them to vote on their behalf. (AgentBanks, please see Note No. 9 on required format)
4. PLEASE READ THE NOTES TO THE PROXY FORM.
I/We, (Name and NRIC no./Passport no./Company Registration no.)
of (Address)
being a unitholder/unitholders of Cambridge Industrial Trust (“CIT”), hereby appoint:
Name Address NRIC/Passport No.
Proportion of
Unitholdings
No. of Units %
and/or (delete as appropriate)
Name Address NRIC/Passport No. Proportion of
Unitholdings
No. of Units %
or, both of whom failing, the Chairman of the Extraordinary General Meeting as my/our proxy/proxies to attend and to vote
for me/us on my/our behalf and if necessary, to demand a poll, at the Extraordinary General Meeting of CIT to be held at
2.30 p.m. on 19 April 2013 at NTUC Auditorium, Level 7, NTUC Centre, One Marina Boulevard, Singapore 018989 (or as
soon thereafter following the conclusion/adjournment of the Annual General Meeting of CIT to be held at 2.00 p.m. on the
same day and at the same place) and at any adjournment thereof. I/We direct my/our proxy/proxies to vote for or against
the resolutions to be proposed at the Extraordinary General Meeting as indicated hereunder. If no specific direction as to
voting is given, the proxy/proxies will vote or abstain from voting at his/her/their discretion, as he/she/they may on any
other matter arising at the Extraordinary General Meeting.
No. Extraordinary Resolutions: For* Against*
1 To approve the Unit Issue Supplement to the Trust Deed
2 To approve the Development Management Fee Supplement to the
Trust Deed
3 To approve the Performance Fee Supplement to the Trust Deed
* If you wish to exercise all your votes “For” or “Against”, please tick [u] within the box provided. Alternatively, if you wish
to exercise your votes both “For” and “Against” the relevant resolution, please insert the relevant number of Units in the
boxes provided.
Dated this day of 2013 Total number of
Units held
Signature(s) of unitholder(s)/Common Seal
IMPORTANT: PLEASE READ NOTES TO PROXY FORM ON REVERSE PAGE
-----------------------------------------------------------------------------------------------------------------------------------------------
"
B.A.C.S. Private Limited
(as unit registrar of Cambridge Industrial Trust)
63 Cantonment Road
Singapore 089758
IMPORTANT: PLEASE READ THE NOTES TO PROXY FORM BELOW
Notes to proxy form:
1. A unitholder of CIT (“Unitholder”) entitled to attend and vote at the Extraordinary General Meeting is entitled to appoint one or two proxies to attend and votein his/her stead.
2. Where a Unitholder appoints more than one proxy, the appointments shall be invalid unless he/she specifies the proportion of his/her holding (expressed asa percentage of the whole) to be represented by each proxy.
3. A proxy need not be a Unitholder.4. A Unitholder should insert the total number of Units held. If the Unitholder has Units entered against his/her name in the Depository Register maintained by
The Central Depository (Pte) Limited (“CDP”), he/she should insert that number of Units. If the Unitholder has Units registered in his/her name in the Registerof Unitholders of CIT, he/she should insert that number of Units. If the Unitholder has Units entered against his/her name in the said Depository Register andregistered in his/her name in the Register of Unitholders, he/she should insert the aggregate number of Units. If no number is inserted, this proxy form willbe deemed to relate to all the Units held by the Unitholder.
5. The instrument appointing a proxy or proxies (the “Proxy Form”) must be deposited at CIT’s unit registrar office at 63 Cantonment Road, Singapore 089758,not less than 48 hours before the time set for the Extraordinary General Meeting.
6. Completion and return of the Proxy Form shall not preclude a Unitholder from attending and voting at the Extraordinary General Meeting. Any appointmentof a proxy or proxies shall be deemed to be revoked if a Unitholder attends the Extraordinary General Meeting in person, and in such event, CambridgeIndustrial Trust Management Limited, as manager of CIT (the “Manager”), reserves the right to refuse to admit any person or persons appointed under theProxy Form, to the Extraordinary General Meeting.
7. The Proxy Form must be executed under the hand of the appointor or of his/her attorney duly authorised in writing. Where the Proxy Form is executed bya corporation, it must be executed either under its common seal or under the hand of its attorney or a duly authorised officer.
8. Where the Proxy Form is signed on behalf of the appointor by an attorney or a duly authorised officer, the power of attorney or other authority (if any) underwhich it is signed, or a notarially certified copy of such power or authority must (failing previous registration with the Manager) be lodged with the Proxy Form,failing which the Proxy Form may be treated as invalid.
9. Agent Banks acting on the request of CPF investors who wish to attend the Extraordinary General Meeting as Observers are required to submit in writing,a list with details of the investors’ name, NRIC/Passport numbers, addresses and numbers of Units held. The list, to be signed by an authorised signatoryof the Agent Bank, should reach the Unit Registrar of Cambridge Industrial Trust not later than 48 hours before the time appointed for holding the ExtraordinaryGeneral Meeting.
10. The Manager shall be entitled to reject a Proxy Form which is incomplete, improperly completed, illegible or where the true intentions of the appointor arenot ascertainable from the instructions of the appointor specified on the Proxy Form. In addition, in the case of Units entered in the Depository Register, theManager may reject a Proxy Form if the Unitholder, being the appointor, is not shown to have Units entered against his/her name in the Depository Registeras at 48 hours before the time appointed for holding the Extraordinary General Meeting, as certified by CDP to the Manager.
11. All Unitholders will be bound by the outcome of the Extraordinary General Meeting regardless of whether they have attended or voted at the ExtraordinaryGeneral Meeting.
12. At any meeting, a resolution put to the vote of the meeting shall be decided on a show of hands unless a poll is (before or on the declaration of the resultof the show of hands) demanded by the Chairman or by five or more Unitholders present in person or by proxy, or holding or representing one-tenth in valueof the Units represented at the meeting. Unless a poll is so demanded, a declaration by the Chairman that such a resolution has been carried or carriedunanimously or by a particular majority or lost shall be conclusive evidence of the fact without proof of the number or proportion of the votes recorded in favourof or against such resolution.
13. On a show of hands, every Unitholder who (being an individual) is present in person or by proxy or (being a corporation) is present by one of its officers asits proxy shall have one vote. On a poll, every Unitholder who is present in person or by proxy shall have one vote for every Unit of which he/she is theUnitholder. A person entitled to more than one vote need not use all his/her votes or cast them the same way.
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