6.11. Rules relating to Real Estate Investment Trusts

(a) A Fund Manager, or any other Person making an Offer of a Unit of a Fund or otherwise marketing a Fund, must not include the term "Real Estate Investment Trust" or "REIT" or refer to a Fund or otherwise hold out a Fund as being a Real Estate Investment Trust or a REIT, unless it is a Fund which complies with Rule 2.4(b)(iv).

(b) If at any time during its operation of the Real Estate Investment Trust, the requirements in Rule 2.4(b)(iv) are not met, the Fund Manager must immediately notify the AFSA of the failure to meet the requirements in these Rules, and of what measures have been or will be taken to remedy the breach. If the breach is not remedied within six months, the Fund will cease to meet the criteria of being a Real Estate Investment Trust. The Fund Manager shall notify Unitholders promptly:

1. (i) of it becoming aware that the Fund is reasonably likely to cease to qualify as a Real Estate Investment Trust (such notice to include the expected date of such cessation); and
2. (ii) on the date of such cessation.

(c) The Fund Manager of a Real Estate Investment Trust is responsible for appointing a Property Manager for the Real Estate Investment Trust and such Property Manager shall either be a:

1. (i) a third party that is permitted under law or regulation (where applicable) to provide Real Estate Management and Servicing Activities; or
2. (ii) a subsidiary of the Fund Manager, which has been established for the purpose of carrying on Real Estate Management and Servicing Activities.

(d) The Fund Manager of a Real Estate Investment Trust must ensure that it distributes to the Unitholders each year an amount equal to not less than 80% of its audited annual net income.

(e) The Fund Manager of a Real Estate Investment Trust must determine if any:

1. (i) revaluation surplus credited to income, or
2. (ii) gains on disposal of Real Property, shall form part of the annual net income for distribution to Unitholders.

(f) A Real Estate Investment Trust may only use leverage or borrow:

1. (i) in aggregate, up to a maximum of 60% of its NAV (as determined at the time of drawdown of funds); and
2. (ii) for investment purposes or to meet its short-term working capital.

(g) A Real Estate Investment Trust is permitted to own, and its Fund Manager is permitted to establish, special purpose vehicles for the purpose of holding Real Property, provided that a Real Estate Investment Trust must own directly or indirectly not less than 60% of the shares, and be entitled to exercise directly or indirectly at least 60% of the voting rights, of any such special purpose vehicle.

(h) Where a Real Estate Investment Trust holds any Real Property via one or more special purpose vehicles, the Fund Manager must ensure that each special purpose vehicle distributes to the Fund all of the Fund's proportionate share of the special purpose vehicle's net income to the maximum extent permitted by the laws and regulations of the jurisdiction where the special purpose vehicle is established.

1. (i) A Fund Manager of a Real Estate Investment Trust that is an Exempt Fund shall be permitted to accept non-cash consideration for the purchase of Units in the Real Estate Investment Trust, subject to complying with Rule 6.11(l). Non-cash consideration for the purchase of Units is not permitted in Real Estate Investment Trusts that are NonExempt Funds.

(j)  Real Estate Investment Trusts can only invest in property under development full completion of construction of which is guaranteed by a relevant state authority or institution or acceptable by the AFSA guarantee issued by a credible bank. The total contract value of the property under development must not exceed 10% of the NAV of the Fund property of the REIT.

(l) A Fund Manager of a Real Estate Investment Trust must include in the Fund’s Offering Materials:

1. (i) a detailed description of how the Fund intends to acquire and hold its investments in Real Properties (including the maximum number of special purpose vehicles through which Real Properties may be held);
2. (ii) the maximum percentage of the Real Estate Investment Trust's assets (by reference to the Real Estate Investment Trust's NAV) that may be deployed for the purposes of property refurbishment, retrofitting and renovation, or a statement that no such activities are permitted; and
3. (iii) (where applicable under Rule 6.11(i)), a statement that the Fund Manager may accept non-cash consideration for the purchase of units in the Real Estate Investment Trust and a description of the lock-up period (if any) applicable to Units acquired for non-cash consideration.