Adoption of initiatives to align unitholder profit with sponsor profit
Introduction of performance linked portion to the asset management reward structure
Remuneration paid by Ooedo Onsen Reit Investment Corporation (the “Investment Corporation”) to the Asset Manager consists of management fee I, management fee II, acquisition fees, and disposition fees.
|Asset Management fee I||Total assets at previous fiscal period end1 × yearly rate of 1.0% (maximum)|
|Asset Management fee II||Management fee II of previous period × (DPU before deduction of management fee II of current period/DPU before deduction of management fee II of previous period) × revisional multiplication factor for management fee II|
|Acquisition fees2||Trading price of acquisition × 1.0% maximum (for transactions with related party.： 0.5% maximum)|
|Disposition fees||Trading price of disposition × 1.0% maximum (for transactions with related party： 0.5% maximum)|
|(Note 1)||Subject to adjustment for asset acquisitions and asset dispositions during the relevant calculation period.|
|(Note 2)||Where the sum calculated for an acquired asset is less than 5 million yen, the acquisition fee is set at 5 million yen.|
|(Note 3)||The sum of management fee I and the first fiscal period’s management fee II is set to be within the limit of roughly 1% of total assets at the end of the relevant business period.|
“Same boat” investment by the sponsor
To align unitholder profit with that of the Ooedo-Onsen Monogatari Group and put in place structures allowing Ooedo Onsen Reit Investment Corporation (the “Investment Corporation”) to undertake joint projects with the Ooedo-Onsen Monogatari Group to increase profits mutually, it has been agreed with Ooedo-Onsen Monogatari Co., Ltd., that the latter will maintain its investment in the Investment Corporation.
Discussion of possible introduction in the future of a unitholder benefits system with win-win situation for both the Investment Corporation and the Ooedo-Onsen Monogatari Group
Discussions are ongoing with Ooedo-Onsen Monogatari Co., Ltd., on whether to introduce a unitholder benefits system and on the details of such a system. The chief aim is to offer unitholders an opportunity to deepen their understanding by experiencing the distinctive features of the inns, hotels, onsen and spa-related facilities, resort facilities, amusement parks, and other leisure facilities owned by the Investment Corporation or the Ooedo-Onsen Monogatari Group.
Governance system for transactions involving conflicts of interest
Flowchart of decision-making in asset acquisition and disposition with related party.