Synergistic relationship to maximize unitholder value
- Build a synergistic relationship between our unitholders and Aeon Group, such that maximizing our unitholder value also benefits Aeon Group
- Ensure highly-transparent corporate governance in order to handle related-party transactions
Building Appropriate Corporate Governance Frameworks
- Measures for Aligning the Interests of Unitholders and Sponsors and for Preventing Conflicts of Interest
We aim to maximize unitholder value by leveraging the Aeon Group's integrated capability, and build a synergistic relationship between our unitholders and Aeon Group whereby maximizing our unitholder value also benefits Aeon Group. We believe that building an appropriate corporate governance framework is important in order to maximize unitholder value.
In accordance with this philosophy, we and our Asset Manager, AEON Reit Management Co., Ltd., have established the policies discussed below.
Transparent Decision-Making Process
As of December 1, 2014
For asset acquisitions from Aeon Group or any other related-party transaction, the decision-making process includes a mechanism to incorporate the opinions of independent third parties having no relationship with Aeon Group.
Specifically, third party outside experts having no relationship with Aeon Group are appointed by both the Investment Committee and the Compliance Committee, and these outside experts must attend the committee meeting and approve any decisions concerning related-party transactions.
Ownership of Investment Units by AEON ("Same Boat Investments")
In order to align the interests of our unitholders and the interests of AEON CO., LTD., in the event that we issue new investment units, AEON CO., LTD. will consider in good faith the acquisition of a portion of these new investment units, and must use its best efforts to maintain its ownership interest at 19.9% as long as it remains our unitholder.
Co-Ownership of Properties with Aeon Group
In consideration of the portfolio's diversification as well as individual factors concerning properties, we may enter into strategic co-ownership of properties (including quasi co-ownership, jun-kyōyū) with Aeon Group companies pursuant to the Sponsor Support Agreement and the Pipeline Support Agreement.
We believe that co-owning properties allows us to manage the portfolio in a way that aligns our interests with the interests of Aeon Group.
|Co-ownership of properties with Aeon Group (including quasi co-ownership)||Strategic co-ownership of properties with Aeon Group companies pursuant to the Sponsor Support Agreement and the Pipeline Support Agreement|
Introduction of an Asset Management Fee Structure Linked to Distributions Per Unit
We aim to align our interests with those of the sponsor of the Asset Manager as well as maximize unitholder value by introducing a management fee structure whereby part of the asset management fees paid to the Asset Manager are linked to the amount of distributions per unit.
|Management fee structure||Calculation method|
|Management fee||Management fee I||Total assets × 0.3% (maximum%) × (Number of operating days / year)|
|Management fee II||Distributions per unit before deducting Management fee II × NOI* × 0.001% (maximum%)|
|Acquisition fee||Purchase price × 0.5% (maximum%)
[Related-party transactions: purchase price × 0.25% (maximum%)]
|Disposition fee||Disposition price × 0.5% (maximum%)[Related-party transactions: no disposition fee paid]|
|*||Net Operating Income (NOI) of a property is defined as the total rental and other operating revenues earned during the fiscal period, less property-related expenses (not including depreciation expenses and loss on sales of noncurrent assets).|