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Distributable income excludesproceeds from the sale of theREIT's assets that are re-invested in the REIT within one(1) year from the date of the sale.

o. "DST" means DocumentaryStamp Tax imposed under TitleVII of the NIRC

p. "Exchange" means any entityregistered with the Commissionas a stock exchange pursuant tothe Securities Regulation Code.

q. "Fund Manager" refers to the

person engaged by the REIT toperform such functionsenumerated in these Rules.

r. "Income-generating RealEstate" means real propertywhich is held for the purpose ofgenerating a regular stream ofincome such as, but not limitedto, rentals, toll fees, user's fees,ticket sales, parking fees and

storage fees. 1avvphi1 s. "Independent Director" meansa director who has thequalifications and none of thedisqualifications of anindependent director as specifiedin the Securities Regulation Codeand its Implementing Rules andRegulations.

t. "Investible Funds" refers tofunds of the REIT that can beplaced in investment vehiclesother than income-generatingreal estate, as allowed underthese Rules.

u. "Investor" means the owner ofInvestor Securities.

v. "Investor Securities" meansshares of stock issued by a REIT

or derivatives thereof.

w. "Managed Funds" means anyarrangement whereby funds aresolicited from the investing publicand pooled for the purpose ofinvesting in securities dulyregistered and/or approved bythe appropriate regulatory agencyof the government for investmentand/or reinvestment by the REIT.

x. "Material Contract" refers to anagreement or arrangement wherethe amount involved is at leastfive percent (5%) of theDeposited Property of the REITor which is not entered into in theordinary course of business ofthe REIT: Provided,however, That the following shallbe deemed a Material Contract

regardless of the amount:i. Related PartyTransactions as defined inthese Rules;

ii. Agreements betweenthe REIT and FundManager;

iii. Agreements between

the REIT and PropertyManager;

iv. Agreements betweenand among shareholdersrelating to thetransferability of theshares of stock of the

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REIT, control of the REITand voting rights overshares of stock of theREIT, such as but notlimited to, voting trust

agreements, poolingagreements, joint ventureagreements, optionagreements, andagreements granting rightsof first refusal orconversion rights;

v. Any acquisition ordisposition of real estateby the REIT;

vi. Contracts relating toinvestments of the REIT;

vii. Any contract creatingmortgages,encumbrances, liens orrights on the real estate ofthe REIT;

viii. Contract of any nature

that limits the declarationor distribution of dividendsby the REIT;

ix. Any contract relating to joint venture, spin off,consolidation or merger,take-over or change inControl involving the REIT;

x. Any contract that may

be expected to materiallyaffect the market activityand/or the price of theInvestor Securities.

y. "Net Asset Value" or "NAV"means the adjusted net assetvalue reflecting the fair market

values of total assets andinvestible funds held by the REIT,less total liabilities. NAV pershare shall be computed bydividing NAV by the total

outstanding shares of the REIT.

z. "Net Income" means netincome as determined under thePhilippine Financial ReportingStandards (PFRS).

aa. "NIRC" means the NationalInternal Revenue Code of 1997,as amended.

bb. "Overseas Filipino Investor"refers to an individual citizen ofthe Philippines who is workingabroad, including one who hasretained or re-acquired hisPhilippine citizenship underRepublic Act No. 9225, otherwiseknown as the "CitizenshipRetention and Re-acquisition Actof 2003".

cc. "PAS" means Philippine Accounting Standards.

dd. "Parent" means a corporationwhich has control over anothercorporation, directly or indirectly,through one or moreintermediaries.

ee. "PFRS" means PhilippineFinancial Reporting Standards.

ff. "Principal Officer" means thechairman of the board ofdirectors, president, chiefexecutive officer, chief operatingofficer, treasurer, chief financialofficer, corporate secretary, vicepresident, executive vice

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president, senior vice president,compliance officer, chiefaccounting officer, chiefinvestment officer and theirequivalent positions, including

consultants with similar rank orposition.

gg. "Property Value" means anindependent entity engaged by aREIT to value its real estate inaccordance with these Rules.

hh. "Principal Stockholder"means a stockholder who is,directly or indirectly, the

beneficial owner of more than tenpercent (10%) of any class ofInvestor Securities of the REIT.

ii. "Public Shareholder" means ashareholder of a REIT other thanthe following persons (non-publicshareholders):

i. The Sponsor/Promoterof the REIT;

ii. A director, PrincipalOfficer or PrincipalStockholder of theSponsor/Promoter of theREIT;

iii. A director, PrincipalOfficer or PrincipalStockholder of the REIT;

iv. An associate of adirector, Principal Officeror Principal Stockholder ofthe REIT or itsSponsor/Promoter;

v. A Related Corporationto the REIT or itsSponsor/Promoter; and

vi. Any person who holds

legal title to the shares ofstock of the REIT for thebenefit of another for thepurpose of circumventingthe provisions of this Act.

jj. "Property Manager" refers to aprofessional administrator of realproperties who is engaged by theREIT to provide the propertymanagement services defined

under these Rules.kk. "Real Estate InvestmentTrust" or "REIT" is a stockcorporation established inaccordance with the CorporationCode of the Philippines and therules and regulationspromulgated by the Commissionprincipally for the purpose ofowning income-generating real

estate assets. For purposes ofclarity, a REIT, althoughdesignated as a "trust", does nothave the same technical meaningas "trust" under existing laws andregulations but is used herein forthe sole purpose of adopting theinternationally accepteddescription of the company inaccordance with global bestpractices.

ll. "Real Property" shall have thesame definition as "ImmovableProperty" under Article 415 of theCivil Code of the Philippines.Real estate, when used in this

Act, shall have the samemeaning as real property.

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mm. "REIT Plan" refers to theplan, including its amendments,of the REIT registered with andapproved by the Commission.

nn. "Real Estate-Related Assets"mean:

i. Debt securities and listedshares issued by listedproperty companies; or

ii. Other funds and assets,including personalproperty, incidental to theownership of real estate.

oo. "Related Corporation" meansthe Parent, Subsidiary or Affiliateof the REIT.

pp. "Related Party" includes:

i. A director, PrincipalOfficer or PrincipalStockholder of the REIT orassociate of such persons;

ii. The Sponsor/Promoterof the REIT;

iii. The Fund Manager ofthe REIT;

iv. The Adviser of theREIT;

v. The Property Manager

of the REIT;vi. A director, PrincipalShareholder or PrincipalOfficer of theSponsor/Promoter of theREIT Fund Manager orProperty Manager, or

associate of any suchpersons; and

vii. Related Corporation tothe REIT, the Fund

Manager or the PropertyManager.

qq. "Securities Regulation Code"or "SRC" refers to Republic ActNo. 8799, otherwise known asthe Securities Regulation Code of2000, and its Implementing Rulesand Regulations as amended.

rr. "Sponsor/Promoter" means

any person who, acting alone orin conjunction with one or moreother persons, directly orindirectly, contributes cash orproperty in establishing a REIT.

ss. "Subsidiary" means acorporation more than fiftypercent (50%) of the voting stockof which is owned or controlled,directly or indirectly, through one

or more intermediaries, byanother corporation, whichthereby becomes its parentcorporation.

tt. "Synthetic InvestmentProducts" are derivatives andother securities createdexclusively out of one or morefinancial instruments to simulatethe returns of the underlyingassets or indices of asset values,including, but not limited towarrants, options, interest ratederivatives, currency derivatives,equity derivatives and creditderivatives such as credit-linkednotes, collateralized debtobligations, total return swaps,

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credit spread options and creditdefault options.

uu. "Taxable Net Income" meansthe pertinent items of gross

income specified in Section 32 ofthe NIRC, less all allowabledeductions enumerated inSection 34, of the NIRC, less thedividends distributed by a REITout of its Distributable Income asof the end of the taxable year as:(a) dividends to owners of thecommon shares; and (b)dividends to owners of thepreferred shares pursuant to their

rights and limitations specified inthe Articles of Incorporation of theREIT.

Rule 4 - Real Estate Investment Trust

Section 1. Investment in the REIT.

1.1 Investment in a REIT shall be byway of subscription to or purchase ofshares of stock of the REIT.

1.2 A REIT may provide in its Articles ofIncorporation different classes of sharesof stock enumerating therein theirrespective features.

1.3 No shares of stock of the REIT shallbe offered for subscription or sale toPublic Shareholders except inaccordance with a REIT Plan registeredwith and approved by the Commission.

The REIT Plan shall take the place of aprospectus. It shall contain the followinginformation:

a. investment policy, restrictionsand strategy of the REIT;

b. discussion on the businessplan for property investment andmanagement covering the scopeand type of investments made orintended to be made by the REIT,

including the type(s) of realestate (e.g. leisure, residential,commercial, or industrial);

c. general character andcompetitive conditions of all realestate now held or intended to beacquired by the REIT and howsuch real estate meets theestablished criteria for selection;

d. nature and risks of makingproperty investments in each ofthe relevant locations, including:

i. demographics;

ii. state of the economy,economic risks and foreignexchange risk;

iii. political risks;

iv. legal risks and taxconsiderations;

v. policies that affectproperty investments andproperty sales;

vi. overview of the propertymarket;

vii. analysis of the specificproperty sector and thecompetitive dynamics inthe rental market;

viii. operationalrequirement; and

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a. Minimum Public Ownership. AREIT shall be a public companyand to be considered as such, aREIT shall: (a) maintain its statusas a listed company; and (b)

upon and after listing, have atleast one thousand (1,000) PublicShareholders each owning atleast fifty (50) shares of any classof shares, and who, in theaggregate, own at least one-third(1/3) of the outstanding capitalstock of the REIT.

A REIT shall, from the time ofincorporation, issue shares to, or

record the transfer of all itsshares into the name ofshareholders, investors or,securities intermediary in theform of uncertificated shares. Itshall engage the services of aduly licensed transfer agent tomonitor subsequent transfer ofthe shares. Said registrar shallensure that the shares aretraceable to the names of theshareholders or investors and fortheir own benefit and not for thebenefit of any of the non-publicshareholders.

The shares may be registeredunder a nominee and thenominee shall make available tothe transfer agent the names ofthe shareholders in suchfrequency as may be necessaryfor the transfer agent to performits basic functions.

Compliance with the minimumpublic ownership requirementunder this section shall be dulycertified by the transfer agentupon listing, as of record date for

any dividend declaration or anycorporate action requiringshareholder approval and otherrelevant times as may berequired by the Commission.

b. Capitalization. A REIT shallhave a minimum paid-up capitalof Three Hundred Million Pesos(Php300,000,000.00) at the timeof incorporation which can eitherbe in cash and/or property.

c. Independent Directors. At leastone-third (1/3) or at least two (2),whichever is higher, of the board

of directors of a REIT shall beindependent directors.

d. Organization andGovernance. As a publiccompany, the REIT shall havesuch organization andgovernance structure that isconsistent with the Revised Codeof Corporate Governance andpertinent provisions of the SRC

and its IRR. The REIT shall holdsuch meetings as provided for inits Constitutive Documentspursuant to the CorporationCode.

5.2 Executive Compensation. The totalannual compensation of all directors andPrincipal Officers of the REIT shall notexceed ten percent (10%) of the netincome before regular corporate incometax of the REIT during the immediatelypreceding taxable year, and shall begoverned by the disclosurerequirements of PAS 24.

5.3 Fund Manager and PropertyManager Fees. The REIT shall engagea Fund Manager and a Property

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Manager in accordance with theseRules. The fees received by the FundManager and the Property Managerfrom the REIT shall not exceed onepercent (1%) of the Net Asset Value of

the Assets under their respectivemanagement.

Section 6. Functions of theREIT. Unless otherwise stated in theseRules, the REIT shall have all of thepowers of a corporation under theCorporation Code, and shall perform allof the functions of a corporation, exceptthose expressly delegated under theseRules to the fund Manager and to the

Property Manager, and those that arenecessary such as but not limited to thefollowing:

a. appoint a Fund Manager, aProperty Manager and a PropertyValuer;

b. ensure that the financial andeconomic aspects of the REITare professionally managed in

the interest of the shareholdersand creditors.

c. formulate the annualinvestment strategy and policy ofthe REIT in accordance with theREIT Plan;

d. determine the annualborrowing limit of the REIT, inaccordance with the REIT Plan;

e. determine the acquisition anddisposition plan of real estateproperties in accordance with theinvestment objective indicated inthe REIT Plan;

f. implement appropriate policiesand conduct due diligencereviews such that investmentsare made only after careful anddiligent investigations by the

REIT;

g. formulate dividend paymentschedules of the REIT;

h. maintain or cause to bemaintained proper books andrecords of the REIT and causethe preparation of the REIT'sfinancial statements;

i. ensure that all documents inrelation to the REIT (excludingdocuments containingcommercially sensitiveinformation) are made availablefor inspection by theshareholders and creditors of theREIT in the Philippines, duringnormal office hours, at the placeof business of the REIT andensure that copies of such

documents are available uponrequest by any shareholder orcreditor upon payment of areasonable fee;

j. ensure compliance with anyapplicable laws, rules, codes orguidelines issued bygovernmental departments,regulatory bodies, exchanges orany other relevant organizationsregarding the activities of theREIT or its administration; and

k. maintain and implementinvestor relations procedureswhether online or otherwise tohandle queries and complaints.

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such Synthetic Investment Productssolely for the purpose of hedging riskexposures of the existing investments ofthe REIT; (iii) the Synthetic InvestmentProducts shall be accounted for in

accordance with PFRS; (iv) theSynthetic Investment Products shall beissued by authorized banks or non-bankfinancial institutions in accordance withthe rules and regulations of the BSPand/or the SEC; and (iv) the use ofSynthetic Investment Products shall bedisclosed in the REIT Plan and underspecial authority from the SEC.

Section 2. Property Development. A

REIT shall not undertake propertydevelopment activities whether on itsown, in a joint venture with others, or byinvesting in unlisted propertydevelopment companies, unless: (i) itintends to hold in fee simple thedeveloped property for at least three (3)years from date of completion ; (ii) thepurchase agreement of the saidproperty is made subject to thecompletion of the building with propercover for construction risks; (iii) thedevelopment/construction of real stateshall be carried out of terms which thebest available for the REIT and whichare no less favorable to the REIT thanan arm's length transaction betweenindependent parties; and (iv) theprospects for the real estate uponcompletion can be reasonably expectedto be favorable.

The total contract value of propertydevelopment activities undertaken andinvestments in uncompleted propertydevelopments should not exceed tenpercent (10%) of the Deposited Propertyof REIT.

Section 3. Leasehold Property. Wherea leasehold property is acquired, theconsent of the regulatory authority totransfer the lease shall be obtained. Thelease shall be registered lease.

Section 4. Encumbrances. Unlessotherwise disclosed, all real estate shallbe free from all encumbrances at thetime of acquisition, except for chargesentered by financial institutions inrelation to loan facilities extended for theconstruction or acquisition, except forcharges entered by financial institutionsin relation to loan facilities extended forthe construction or acquisition of the real

estate.Section 5. Insurance. All real estateacquired by REIT shall be insured fortheir full replacement value, includingloss of rental, where appropriate, withinsurance companies approved by theFund Manager.

Section 6. Single Entity Limit. Not morethan fifteen percent (15%) of the

Investible Funds of the REIT may beinvested any one issuer's securities orany one managed fund, except withrespect to the Philippine governmentsecurities where the limit is twenty -fivepercent (25%).

Section 7. Foreign Assets. A REIT mayinvest in local or foreign assets, subjectto the terms of its ConstitutiveDocuments and specific provisions ofthese Rules. Where an Investment in aforeign real estate asset is made, theREIT should ensure that the investmentcomplies with all the applicable laws andrequirements in that foreign country,such as , but not limited to foreignownership restrictions, if any, and

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requisites of having good and valid titleto the real estate. 1avvphi1

Section 8. Aggregate LeverageLimit. The total borrowing and deferred

payments of a REIT should not exceedthirty five percent (35%) of its DepositedProperty; Provided, however, that thetotal borrowings and deferred paymentsof a REIT that has a publicity disclosedinvestment grade credit rating by a dulyaccredited or internationally recognizedrating agency may exceed thirty-fivepercent (35%) but not more thanseventy percent(70%) of its DepositedProperty. Provided, further that in no

case shall a Fund Manager, borrow forthe REIT from any of the funds under itsmanagement.

Section 9. Related PartyTransactions. Any contract oramendment thereto, between the REITand Related Parties, including contractsfor services, shall comply with thefollowing minimum requirements:

a. Full, fair, timely and accuratedisclosures on the identity of theparties, their relationship with theREIT, and other important termsand conditions of the transactionhave been made to the Exchangeand the Commission;

b. Be on fair reasonable terms,including the contract price;

c. Approved by at least a majorityof the entire membership of theboard directors, including theunanimous vote of allindependent directors of theREIT;

d. Accompanied by a fairnessopinion by an independentappraiser done in accordancewith the valuation methodologyprescribed by the Commission, in

the case of an acquisition ordisposition of real estate assetsand property or share swaps orsimilar transactions; and

e. Any other matter that may bematerially relevant to aprospective investor in decidingwhether or not to invest in theREIT.

Section 10. Valuation. A full valuation ofa REIT's assets shall be conducted byan independent Property Valuer, dulyaccredited by the Commission, at leastonce a year. NO valuer shall value thesame REIT for more than three (3)consecutive years. Subject to a curingperiod of three (3) years, the REIT may,however, re-engage the services of saidproperty valuer. The Valuation Report,including the standards of asset

valuation and valuation methodologyshall be disclosed in the Annual Reportof the REIT.

Section 11. Records. All proceduresand processes followed, and decisionsmade in relation to whether or not toinvest in a particular property shall befully, property and clearly documentedby the REIT, the Fund Manager andProperty Manager, as may beapplicable.

Section 12. Reportorial and DisclosureRequirements.

12.1 Requirements. The REIT shallcomply with the reportorial anddisclosure requirements prescribed by

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the Corporation Code, the SRC and therelevant Exchange. The BIR shalllikewise be furnished copies of thereports herein prescribed. At theminimum, the REIT shall disclose the

following information in its Annual,Quarterly Current Report:

a. Material Contracts as definedunder Rule 3 (v);

b. Breach of the borrowing limit ofREIT and how and when toaddress said breach;

c. Investment of REIT;

d. A proposed change in theFund Manager, PropertyManager, Valuer or auditor of theREIT, and the reasons therefore;

e. Valuation of the real estateproperties of the REIT, includingthe valuation methodology usedtherefore;

f. Material changes in the incomestream of the REIT;

g. Material changes in the REIT'sfinancial forecast;

h. Any fee received by any partyrelating to the acquisition ordisposition of the real estate ofthe REIT;

i. Giving or receiving a notice ofintention to undertake a merger,consolidation, joint venture,takeover or spin-off involving theREIT;

j. Any modification of the rights ofthe holders of any class

securities issued by the REIT andthe corresponding effect of suchmodification upon the rights ofthe holders;

k. Any declaration of cashdividend, stock dividend. Propertydividend and pre-emptive rightsby the REIT;

l. Appointment of receiver orliquidator for the REIT;

m. Losses or potential losseswhich amount to at least (5%) ofthe value of the Deposited

Property of the REIT;n. Occurrence of any event ofdissolution with details in respectthereto;

o. Acts of facts that mightseriously impair the businessactivities of the REIT;

p. Any development activity

undertaken by the REIT,including the essential detailsthereof;

q. Direct and indirect ownershipof directors and Principal Officersin the securities of the REIT;

r. Any amendment to theConstitutive Documents of theREIT;

s. Any major change inaccounting policy of the REIT;and

t. Any planned acquisition ofoutstanding shares or dispositionof treasury shares of the REIT;

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u. Summary of real estatetransactions entered into duringthe period, including the identityof the parties, the contract priceand their valuations, including the

methods of valuation;

v. Summary of the REIT's realestate assets, including thelocation of such assets, theirpurchase prices and the latestvaluations, rentals received andoccupancy rates and/or theremaining terms of the REIT'sleasehold properties; and

w. Comparative summary to thefinancial performance of the REITfor the same periods.

12.2 Failure of Compliance. Failure tocomply with reportorial and disclosurerequirements shall subject the REIT tothe applicable penalties under theSecurities Regulation Code and therules of the relevant Exchange, withoutprejudice to the filling of the appropriate

administrative, civil and/or criminalaction under the REIT Act of 2009 orexisting laws.

Rule 6 - Fund Manager

Section 1. Fund Manager. A REIT shallappoint a Fund Manager who shall beindependent of the REIT, its promoter/sor sponsor/s.

Section 2. Organization andRequirements. A REIT Fund Managershall subject to the following minimumrequirements:

21.1 It shall be registered corporation:(I) duly licensed by the appropriatePhilippine regulatory agency engage in

the business of fund management. If theFund Manager is a trust entity, it shallbe covered by existing BSP rules andregulations governing trust entities andregulations which the BSP may from

time to time issue. (ii) with at least athree (3) year track record in the area offund management, corporate finance, orother relevant finance related functions;and (iii) a minimum paid -up or assignedcapital in the case of foreigncorporation, of One Hundred MillionPesos (Php 100,000,000.00) or itsequivalent in foreign currency whichshall remain unimpaired at any giventime, otherwise, an additional capital

infusion shall be made within three (3)working days from such impairment; (iv)with sufficient human, organizationaland technical resources for the properperformance of its duties, including two(2) responsible officers or a trust officer,in case of a trust entity, shall beavailable at all times to supervise thebusiness of the Fund Manager;

21.2 Its office in the Philippines shallhave a meaningful role in its businessactivities and must perform accounting,compliance and investor relationsservices in the Philippines;

21.3 Its chief executive officer or trustofficer shall be resident of thePhilippines, and its two (2) full-time andqualified professional employees shallhave a track record and experience infinancial management as well asexperience in the real estate industry forat least five (5) years;

Section 3. Functions of the FundManager. The Fund Manager shallperform the following functions.

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3.1 Implement the investment strategiesof the REIT by: (I) determining theallocation of the Deposited Property tothe allowable investment outlets inaccordance with the REIT Plan and the

investment strategy of the REIT; and (ii)selecting income-generating real estatein accordance with the investmentstrategy of the REIT.

Notwithstanding the written instructionsof the REIT, it shall be the fiduciaryresponsibility of the Fund Manager toobjectively evaluate the desiredinvestments, and formally advise theREIT of its recommendations, even if

contrary to the instructions;3.2 Oversee and coordinate thefollowing activities: property acquisition;leasing ; operational and financialreporting (including operating budgets);appraisal; audits; market review;accounting and reporting procedures, aswell as financing and asset dispositionplans;

3.3 Cause a valuation of any of the realestate and other properties of the REITto be carried out by the Property Valueronce a year whenever the FundManager believes that such valuation isappropriate;

3.4 Take all necessary measures toensure: (i) that the Net Asset per unit ofa REIT s calculated as and when anannual valuation report is issued by theProperty Valuer for the relevant period,and that such Net Asset Value per unitshall be disclosed in the annual reports;(ii) that the investment and borrowinglimitations set out in the REIT Plan andthe conditions under which REIT wasauthorized are complied with; (iii) that alltransactions carried out by or on behalf

of the REIT are conducted at armslength; (iv) that all times a REIT hasproper legal title to the real estate itowns, as well as to the contracts. (suchas property contracts, rental

agreements, joint venture or jointarrangement agreements, and any otheragreements) entered into on behalf ofthe scheme with respect to its assetsand that (v) that the property Managerobtains adequate property insurance forthe real properties of the REIT frominsurance companies approved by theFund Manager. It shall take custody ofall relevant documents supporting theinsurance taken on real properties of the

REIT.3.5 Perform all such functionsnecessary to asset management.

Section 4. Minimum DocumentaryRequirements.

4.1 The arrangement between the REITand the Fund Manager shall be coveredby the written document entered into by

the parties, accompanied by aSecretary's Certificate attesting to theapproval by the board of directors of theREIT of the appropriate resolutions forthe: (i) appointment of the FundManager, (ii) the establishment of theaccount, and (iii) designated ofsignatories to the account.

4.2 The contract between the REIT andthe Fund Manager shall comply with thedisclosure and other requirementsprescribed for Related PartyTransactions. The arrangementbetween the REIT and the FundManager shall be covered by a writtendocument stating the following:

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a. title or nature of contractualagreement in noticeable print;

b. legal capacities, in noticeableprint, of parties sought to be

covered;

c. purposes and objectives;

d. funds and/or properties subjectof the arrangement;

e. distribution of the funds and/orproperties;

f. duties and powers of the Fund

Manager;

g. liabilities of the Fund Manager;

h. reports to the REIT,Commission, BIR and Exchange;

i. details of any custodianshiparrangement;

j. terms, including period of

engagement, termination ofcontractual arrangement and, inappropriate cases, provision forsuccessor Fund Manager;

k. the exact amount or rate of thecompensation of the FundManager, provided that theamount of fees that shall becharged to the REIT shall coverthe fair and equitable share of the

REIT in the total routineadministrative expenses of theFund Manager such as salariesand wages, supplies, creditinvestigation, collateral appraisal,security, messengerial and

janitorial services, supervisionfees imposed by the relevant

regulatory agency and internalaudit fees. However, the FundManager may charge the REITfor special expenses in case suchexpenses are: (1) necessary to

preserve or enhance the value ofthe fund; (2) payable to a non-related third party covered by aseparate contract, and (3)disclosed to the REITshareholders. Provided,however, that in no case shall thefees collected by the FundManager exceed 1% of the netasset value of the assets undermanagement;

l. if the Fund Manager is a trustentity, a statement in noticeableprint to the effect that the fundsand properties are not covered bythe Philippine Deposit InsuranceCorporation and that losses, ifany, shall be for the account ofthe REIT; and

m. disclosure requirements for

transactions requiring priorauthority and/or specific writteninvestment directive from theREIT, court of competent

jurisdiction or other competentauthority.

4.3 A copy of the written agreementshall be submitted to the Commissiontogether with the REIT Plan and theregistration statement, and shall beavailable at the principal office of theREIT and the Fund Manager duringregular office hours, for inspection byany shareholder of record of the REIT.Upon request, a copy of the writtenagreement shall be furnished suchshareholder of record, and the cost of

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reproduction shall be at his ownexpense.

Section 5. Degree of Care andDiligence. The Fund Manager shall

observe the care and diligence requiredunder these Rules, as follows:

5.1 The Fund Manager shall administerand manage the assets of the REIT withthe skill, care, prudence and diligencenecessary under the circumstances thenprevailing that a prudent man, acting inthe same capacity and familiar with suchmatters, would exercise in the conductof an enterprise of a like character and

similar aims.5.2 The Fund Manager shall havereasonable and adequate basis forpreparing the investmentrecommendation.

5.3 The Fund Manager shall establish,maintain and implement written policiesand procedures that ensure "bestexecution" of trades. To show proof of

best execution, the Fund Manager shallmaintain records or quotes from two (2)alternate providers, wheneverapplicable, or data from any reputablesource that can best provide a basis forthe asset's fair value. Such records shallbe made available to the Commissionupon request.

5.4 Funds or properties of a REITmanaged by a Fund Manager shall notbe commingled with the funds of otherclients.

5.5 The Fund Manager may onlyoutsource activities confined tobackroom/accounting and securitiescustodianship arrangements.

5.6 When required under the Rules, theFund Manager shall obtain the requiredapproval for specific transactions prior toits implementation.

5.7 The Fund Manager shall provide theREIT with full and accurate informationin order to make an informed investmentdecision when approving a transactionor investment recommendation. TheFund Manager shall promptlytransmit/relay to investors all materialfacts necessary for them to protect theirinterest with the knowledge of orreasonably discoverable by the FundManager, particularly, information that

could enable clients to make well-informed decisions.

Section 6. Conflict of Interest.

6.1 Where a Fund Manager has amaterial interest in a transaction with orfor the REIT, or a relationship whichgives rise to an actual or potentialconflict of interest in relation to suchtransaction, it shall neither advise, nor

deal in relation to the transaction unlessit has disclosed in writing that materialinterest or conflict to the REIT and hastaken all reasonable steps to ensure fairtreatment of the REIT.

It shall establish, maintain andimplement written policies andprocedures on conflict of interest,particularly to identify and deal withconflicts of interest situations.

6.2 The Fund Manager shall establish,maintain and implement written policiesand procedures to ensure that itsresearch is independent and impartial inorder to provide a reasonable andadequate basis for making investmentdecisions and taking investment action.

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employees of the Fund Manager,or their relatives within the firstdegree of consanguinity oraffinity, or to the related interestof such directors, officers and

stockholders, or from anycorporation where the FundManager owns at least fiftypercent (50%) of the subscribedcapital or voting stock in its ownright and not as trustee nor in arepresentative capacity or to anycorporation which owns at leastfifty percent (50%) of thesubscribed capital or voting stockof the Fund Manager;

c. Invest in equities of, or insecurities underwritten by, theFund Manager or a corporation inwhich the Fund Manager owns atleast fifty percent (50%) of thesubscribed capital or voting stockin its own right or to anycorporation which owns at leastfifty percent (50%) of thesubscribed capital or voting stockof the Fund Manager;

d. Sell, transfer, assign, or lendmoney or property from onemanaged fund to another, exceptwhen the investment is inevidence of indebtedness of theRepublic of the Philippines orloans fully guaranteed by theRepublic of the Philippines as tothe payment of principal andinterest.

The disclosure required by thissubsection shall consist of the followingminimum information: (i) thetransactions to be entered into; (ii)identities of the parties involved in thetransactions and their relationships; (iii)

amount involved; and (iv) collateralsecurities, if any.

7.5 Funds Awaiting Investments orDistribution. Funds held by the Fund

Manager awaiting investment ordistribution shall not be held uninvestedor undistributed any longer than isreasonable for the proper managementof the account.

7.6 Order Allocation.

a. The Fund Manager shallestablish, maintain andimplement policies and

procedures to ensure fair andequitable allocation of ordersamong its clients, including theREIT.

b. The Fund Manager shallensure that the amount ofcommission or management feeearned from any particular clientor transaction shall not be thedetermining factor in the

allocation of orders.c. Where the Fund Managerundertakes proprietary trading,the Fund Manager shall, in itsagreement with the REIT,disclose to the REIT the methodof selection and determination ofsecurities transacted for theproprietary accounts and client'saccounts. The Fund Managershall ensure that trades are notdirected to benefit its proprietaryaccounts or any preferentialclients and, for this purpose, shallestablish information barriers orfirewalls, closely superviseinternal communication toprevent flow of information and

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maintain the confidentiality ofpending transactions and theholdings of the REIT. Proprietaryorders shall be conductedthrough a separate licensed

representative of the FundManager who shall not bemanaging the REIT's funds.

d. Where the Fund Manager ispart of a group of companies,which undertake other financial orreal estate/property activities, theFund Manager shall ensure thatthere is an effective system offunctional barriers (firewalls) in

place to prevent the flow ofinformation that may be pricesensitive or material and non-public, between the differentareas of operations.

e. The Fund Manager shallestablish, maintain andimplement written policies andprocedures to ensure that theinterest of Related Parties shall

not supersede the interests of theREIT. The Fund Manager shalldisclose such policies to theREIT.

Section 8. Prohibition on InsiderTrading/Misuse of Information

8.1 The Fund Manager shall not effector cause to be effected any transactionbased on material non-public or pricesensitive information, or whereprohibited from dealing by statutoryrestrictions on insider trading.

8.2 The Fund Manager shall establish,maintain and implement written policiesand procedures to prevent the misuse ofmaterial non-public or price sensitive

information relating to the REIT bypersons having access to suchinformation. The Fund Manager shallensure that persons having access tosuch information are aware of such

restrictions.

8.3 The Fund Manager shall disclose allinterest in securities as required by allapplicable statutory requirements andshall ensure that its staff is aware ofsuch requirements.

Section 9. Confidentiality of Information.

9.1 The Fund Manager shall establish,

maintain and implement written policiesand procedures to ensure confidentialityof information relating to the funds andproperties of the REIT.

9.2 Any information relating to the fundsor properties of the REIT shall not bedisclosed to a third party or anunauthorized person, unless there is alegal or regulatory requirement todisclose such information.

Section 10. Reports. The FundManager shall submit the followingreports:

10.1 The three (3)-year investmentstrategy prepared by the REIT, whichshall be due for submission to theCommission and the relevant Exchangeon or before December of every year.

10.2 Quarterly written report on theperformance of the REIT's funds andproperties, and of the appropriatebenchmarks shall be submitted to theREIT, the Commission, the BIR and therelevant Exchange within forty five (45)days after the end of each quarter.

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j. initiating refurbishment andmonitoring such activity.

Section 4. Written Agreement.

4.1 The contract between the REIT andthe Property Manager shall be coveredby a written document entered into bythe parties, accompanied by aSecretary's Certificate attesting to theapproval by the board of directors of theREIT of the appropriate resolutions forthe appointment of the PropertyManager.

4.2 The contract between the REIT and

the Property Manager must comply withthe disclosure and other requirementsprescribed for Related PartyTransactions and must be submitted tothe Commission together with the REITPlan registration statement. Thearrangement between the REIT and theProperty Manager shall be covered by awritten document stating the following:

a. title or nature of contractual

agreement in noticeable print;b. legal capacities, in noticeableprint, of parties sought to becovered;

c. purposes and objectives;

d. real properties subject of thearrangement;

e. duties and powers of theProperty Manager;

f. liabilities of the PropertyManager;

g. reports to the REIT;

h. terms including the period ofengagement, termination ofcontractual arrangement and, inappropriate cases, provision forsuccessor Property Manager;

i. the exact amount or ratecompensation of the PropertyManager, provided that theamount of fees that shall becharged to the REIT shall coverthe fair and equitable share of theREIT in the total routineadministrative expenses of theProperty Manager such assalaries and wages, supplies,

appraisals, security,messengerial and janitorialservices, supervision feesimposed by the relevantregulatory agency and internalaudit fees. However, the PropertyManager may charge the REITfor special expenses in case suchexpenses are: (1) necessary topreserve or enhance the value ofthe REIT's Deposited Properties;(2) payable to a third partycovered by a separate contract,and (3) disclosed to REIT'sstockholders. Provided,however, that in no case shall thefees collected by the PropertyManager exceed 1% of the netasset value of the assets undermanagement;

j. disclosure requirements fortransactions requiring priorauthority and/or specific writteninvestment directive from theREIT, a court of competent

jurisdiction or other competentauthority.

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establish, maintain and implementwritten policies and procedures toprevent the misuse of material non-public or price sensitive informationrelating to the REIT by persons having

access to such information. TheProperty Manager shall ensure thatpersons having access to suchinformation are aware of suchrestrictions.

Section 8. Confidentiality of Information.

8.1 The Property Manager shallestablish, maintain and implementwritten policies and procedures to

ensure confidentiality of informationrelating to the funds and properties ofthe REIT.

8.2 Any information relating to theproperties or funds of the REIT shall notbe disclosed to any third partyunauthorized person, unless there is alegal or regulatory requirement todisclose such information.

Rule 8 - Fit and Proper Rule Section 1. Fit and Proper Rule. Tomaintain the quality of management ofthe REIT and afford better protection toREIT investors, the Commission, or theconcerned regulatory agency, shallprescribe or pass upon and review thequalifications of individuals elected orappointed as directors of officers of theREIT, REIT fund managers, REITproperty managers, distributors andother REIT participants and disqualifythose found unfit. The appropriateregulatory agency may disqualify,suspend or remove any director orofficer who commits or omits an actwhich renders him unfit for the position.

In determining whether an individual isfit and proper to hold the position,regard shall be given to his integrity,experience, education, training andcompetence.

Section 2. Disqualifications. Thefollowing persons shall in no case beallowed to serve or act as director ofofficer or consultant of any REIT, REITfund manager, or REIT propertymanager:

2.1 Any person convicted of any crimeinvolving any security or financialproduct;

2.2 Any person convicted of an offenseinvolving fraud or embezzlement, theft,estafa or other fraudulent acts ortransactions;

2.3 Any person who, by reason of anymisconduct, is enjoined by order,

judgment, or decree by any court, quasi- judicial body or administrative agency ofcompetent jurisdiction from acting as a

director, officer, employee, consultant,or agent occupying any fiduciaryposition;

2.4 Any person found by the appropriateregulatory agency to have violated, oraided, abetted, counseled, commanded,induced, or procured the violation of this

Act, the Corporation Code, the GeneralBanking Law, the Insurance Code, theSecurities Regulation Code, or anyrelated laws and any rules, regulationsor orders thereunder;

2.5 Any person judicially declared to beinsolvent, or incapacitated to contract;and

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2.6 Any person found guilty by a foreigncourt, regulatory authority orgovernment agency of the acts orviolations similar to any of the acts ormisconduct enumerated in the foregoing

paragraphs.

A conviction in the first instance shall beconsidered sufficient ground fordisqualification. Applicants shall submitthe pertinent clearance relative thereto.

Rule 9 - Property Valuer

Section 1. Appointment of anIndependent Property Valuer. A REIT

shall appoint a duly accreditedindependent Property Valuer to preparea full valuation of a REIT's assets atleast once a year in accordance with theapplicable rules of asset valuation andvaluation methodology prescribed by theCommission.

A property valuer shall not beconsidered independent if -

a. it is the subsidiary or holdingcompany of:

i. the REIT;

ii. the Property Manager;

iii. the Fund Manager;

iv. any of the PrincipalStockholders of the REIT;

orv. the holding company,Subsidiary or Affiliate ofthe Property Manager, theFund Manager, or any ofthe Principal Shareholdersof the REIT; or

b. any of its partners, directors orPrincipal Officers is an officer,director or an associate of:

i. the REIT;

ii. the Property Manager;

iii. the Fund Manager;

iv. any of the PrincipalShareholders of the REIT;or

v. the holding, Subsidiaryor Affiliate of the Property

Manager, the FundManager or any of itsPrincipal Shareholders; or

c. any of its directors or PrincipalOfficers holds or controls tenpercent (10%) or more of thebeneficial interest in, or the rightto vote in the governing bodies ofany of the entities in b(i), b(ii),b(iii) or b(iv); or

d. in case where the REITintends to acquire or dispose of aproperty (the "subject property "),the Property Valuer or itsassociate:

i. is engaged, whether asprincipal or agent, by theREIT's counterparty thatintends or has agreed to

sell or to purchase fromthe REIT the subjectproperty, in relation to theintroduction or referral ofthe REIT to the subjectproperty or vice versa;

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ii. is engaged whether asprincipal or agent by theREIT in relation to theacquisition of the subjectproperty;

iii. acts as a broker foe theproperty transaction for afee; or

iv. had, at any time duringthe one (1) yearimmediately before thedate of the agreement forsuch intended purchase ordisposal, been engaged to

provide valuation of thesubject property to theREIT's counterparty (or itsRelated Parties).

1.1 The Property Valuer shallensure that its opinion andvaluation is independent of andunaffected by its business orcommercial relationship withother persons.

1.2 The directions and PrincipalOfficers of the Property Valuershall comply with the Fit andProper Rule as described underthese Rules.

Section 2. Qualifications Required of aProperty Valuer.

a. The appraisal company shall

be registered with theCommission;

b. The certifying officer of theappraisal company shall be aprofessional appraiser dulylicensed by the DTI or theProfessional Regulatory Board of

Real Estate Service pursuant toR.A. 9646 and an officer/memberof good standing any registeredassociation of appraisalcompanies;

c. At the time of applicati0on, thecompany shall have a minimumexperience of five (5) years in theappraisal business;

d. It shall have professionalservices for at least one (1)commercial bank and two (2)public companies;

e. The appraisal company or anyof its directors/officers shall haveno adverse judgement on anyadministrative, civil or criminalcase involving its appraisalbusiness;

f. It shall be solvent and in soundfinancial condition.

The foregoing qualifications shall be

supported by appropriate documents.Section 3. General Obligations of aProperty Valuer.

3.1 The Property Valuer shall value allthe real estate of the REIT, on the basisof a full valuation with physicalinspection in respect of the site of thereal estate and an inspection of thebuilding(s) and facilities erected thereon

once a year, and in any event for thepurposes of issuance of new InvestorSecurities. The Property Valuer shallalso produce a valuation report on realestate to be acquired or sold by theREIT or where new shares are offeredby the REIT or in any othercircumstances required by the

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Commission. The contents of thevaluation report shall comply with theseRules.

Section 4. Criteria for Acceptability of

the Property Valuer.

4.1 The Property Valuer shall be acompany that:

a. provides property valuationservices on a regular basis.

b. Carries on the business ofvaluing real estate in thePhilippines;

c. Possesses the requisitelicenses required under relevantPhilippine rules and regulations;

d. Is accredited by theCommission;

e. Has key personnel whopossess the requisite licensesand are qualified to perform

property valuations;f. Has sufficient financialresources at its disposal toenable it to conduct its businesseffectively and meet its liabilities;

g. Has robust internal controlsand checks and balances toensure the integrity of valuationreports and that these reports are

properly and professionallyprepared in accordance withinternational best practices;

h. Has adequate professionalinsurance to cover its usual risks;and

i. Complies with the Fit andProper Rule under these Rules.

Section 5. Valuation Report.

5.1 The Property Valuer shall produce avaluation report which shall include, as aminimum:

a. all material details in relation tothe basis of valuation and theassumptions used;

b. description and explanation ofthe valuation methodologiesadopted;

c. overall structure and conditionof the relevant market includingan analysis of the supply/demandsituation, the market trend andinvestment activities;

d. the particulars in respect ofeach property, such as:

i. an address sufficient to

identity the property, whichshall generally includepostal address, lot numberand such furtherdesignation as isregistered with theappropriate governmentauthorities;

ii. the nature of the interestthe REIT holds in the

property (e.g. if it is afreehold or leasehold, andthe remainder of the termif it is a leasehold);

iii. the existing use (e.g.shops, offices, factories,residential, etc.);

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iv. a brief description of theproperty, such as the ageof the building the sitearea, gross floor area, netlettable floor area, and the

current zoning use;

v. the options or rights ofpre-emption and otherencumbrances concerningor affecting the property;

vi. the occupancy rate;

vii. lease cycle duration;

viii. lease expiry profile;ix. a summary of terms ofany sub-lease ortenancies, including repairobligation, granted to thetenants of the property;

x. the capital value inexisting state at the datethe valuation was

performed;xi. the existing monthlyrental before profile tax ifthe property is wholly orpartly let together with theamount and a descriptionof any outgoings ordisbursements from therent, and, if materiallydifferent , the estimated

different, the estimatedcurrent monthly marketrental obtainable, on thebasis that the property wasavailable to let on theeffective date as at whichthe property was valued;

xii. the estimated currentnet yield;

xiii. a summary of any rentreview provisions, where

material;

xiv. the amount of vacantspace, where material;

xv. material informationregarding the title of thesubject property ascontained in the relevantopinion, and a discussionas to whether any and how

the legal opinions havebeen taken intoconsideration in thevaluation of the relevantproperty; and

xvi. any other matterswhich may affect theproperty or its value.

e. particulars [as set out in (c)] of

any real estate for which theREIT has an option to purchase.

f. A letter starting theindependent status of theProperty Valuer and that thevaluation report is prepared on afair and unbiased basis;

g. An explanation of the rationalefor choosing the particular

valuation method, if more thanone method is adopted.

5.2 Whenever a valuation report isprepared for the REIT, the date of thevaluation report shall be:

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a. the date the REIT is valued, ifsuch report is prepared for thepurpose of calculating the Net

Asset Value of the REIT; or

b. the date which is not morethan three (3) months before thedate on which (i) an offeringdocument is issued; or (ii) a saleand purchase agreement (orother agreement to transfer legaltitle) is signed, if the transactiondoes not require shareholdersapproval.

Section 6. Termination of the Services

of a Property Valuer.6.1 The services of the Property Valuershall be terminated after it hasconducted valuations of the real estateof the REIT for three (3) consecutiveyears. Subject to a curing period ofthree (3) years, the REIT may, however,re-engage the services of said propertyvaluer.

6.2 The Property Valuer shall be subjectto removal by notice in writing from theREIT in any of the following events:

a. the Property Valuer goes intoliquidation, becomes bankrupt orhas a receiver appointed over itsassists;

b. for good and sufficient reasonthe Fund Manager states in

writing that a change in theProperty Valuer is desirable inthe interest of the REITshareholders; or

c. the Property Valuer violatesthese Rules or any other relevantlaw, rule or regulation.

6.3 In addition, the services of theProperty valuer shall be terminated in allother cases provided for in theConstitutive Documents.

6.4 Upon the termination or dismissal ofthe Property Valuer, the REIT shallappoint new Property Valuer that meetsthe qualification requirements underthese Rules.

Rule 10 - Taxes

Section 1. Income Taxation of REIT's. AREIT shall be subject to income taxunder Chapter IV. Title II of the NIRC,

as amended, on its Taxable Net Incomeas defined in the Act: Provided , That inno case shall a REIT be subject to aminimum corporate income tax, asprovided under Section 27(E) of thesame Code;

Provided, further, That for purpose ofcomputing the taxable net income of aREIT, dividends distributed by a REITfrom its distributable income as of the

end of the taxable year and on or beforethe last day of the fifth (5th) monthfollowing the close of the taxable yearshall be considered as paid on the lastday of such taxable year.

However, a REIT shall be subject toincome tax on its taxable net income asdefined in Chapter IV, Title II of theNIRC, as amended, instead of itstaxable net income as defined in thisact, upon the occurrence of any of thefollowing events:

a) Failure to maintain its status asa public company as definesherein;

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b) Failure to maintain the listedstatus of the investor securitieson the Exchange and theregistration of the investorsecurities by the Commission;

and/or

c) Failure to distribute at leastninety (90%) percent of itsDistributable Income as requiredherein.

The above events, however, shall besubject to a Thirty (30) day curing periodfrom the time of the occurrence of theevent. Compliance by the REIT within

the curing period shall be determined bythe Commission and such determinationshall be immediately communicated tothe BIR.

Section 2. Creditable WithholdingTax. Income payments to a REIT shallbe subject to a creditable withholdingtax of one (1%) percent.

Section 3. Tax on Transfer of Property

by REIT. Any sale or transfer of realproperty to a REIT, including the sale ortransfer of any and all security interestthereto shall be subject to fifty (50%)percent of the applicable DST imposedunder title VII of the NIRC.

All applicable registration andannotation fees relative or incidentalthereto shall be fifty (50%) of theapplicable registration and annotationfees.

The incentives provided herein canavailed by an unlisted REIT provided itis listed with an Exchange within two (2)years from the initial availment of theincentives.

The fifty (50%) percent of the applicableDST shall be due and demandabletogether with the applicable surchargepenalties and interest reckoned from thedate such tax should have been paid

upon the occurrence of any of thefollowing events:

a. Failure to list with an Exchangewithin a period two (2) years fromthe date of initial availment;

b. Failure to maintain its status aspublic company as defined in the

Act;

c. Failure to maintain the listedstatus of the Investor Securitieson the Exchange and theregistration of the investorsecurities with the Commission;and/or

d. Failure to distribute at leastninety (90%) of its DistributableIncome required under the Act.

The above events, however, shall besubject to a thirty (30) day curing periodfrom the time of the occurrence of theevent. Compliance by the REIT withinthe curing period shall be determined bythe Commission and such determinationshall be immediately communicated tothe BIR.

Section 4. Issuance and Transfer ofInvestor Securities.

a. The original issuance ofInvestor securities shall besubject to DST under the NIRC,as amended;

b. Any sale, barter, exchange orother disposition of listed Investor

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