Fortune Real Estate Investment Trust Issues Base Fee Units

Fortune Real Estate Investment Trust (FREIT) has recently issued Base Fee Units to its Manager, as payment for management fees. The payment is in accordance with the terms of the Trust Deed and does not require specific prior approval of the Unitholders. This decision is consistent with the provisions of the REIT Code, which allows for the Manager to receive payment in the form of Units or cash.

Key Takeaways:

The Manager received an aggregate of 6,080,134 Base Fee Units at a price of HK$3.81 (HK$3,568,313) and HK$5,791,328 in cash, totaling HK$28,956,639 in payment for the Base Fee.
The Base Fee payment is made quarterly in arrears, with the Manager electing to receive 80% of the payment in Units and 20% in cash.
As of 8 July 2024, the Manager holds 57,485,763 Units, representing approximately 2.84% of the total 2,027,306,693 Units in issue.
The payment is consistent with the terms of the Trust Deed and does not require Unitholders' prior approval pursuant to 12.6 of the REIT Code.
The number of Units issued to the Manager as payment of all or part of the Manager's Fees for each financial year shall be counted as part of the 20% of outstanding Units that the Manager may issue in each financial year without Unitholders' approval.
Immediately after the issue of the Base Fee Units, the number of Units issued to the Manager as payment of all or part of the Manager's Fees for the period from 1 January 2024 to 30 June 2024 represents approximately 0.63% of the total number of Units outstanding as at 31 December 2023.

Statistics:

Number of Base Fee Units issued: 6,080,134
Total payment: HK$28,956,639
Price per Unit: HK$3.81
Cash component: HK$5,791,328
Total Units held by Manager after issue: 57,485,763
Percentage of total Units held by Manager: 2.84%
Total Units in issue after issue: 2,027,306,693

Sources:

[fortune real estate investment trust, 8 July 2024, https://www1.hkexnews.hk/listedco/listconews/sehk/2024/0708/2024070800649.pdf]