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Ascott Residence Trust (ART) is a stapled group comprising Ascott Real Estate Investment Trust (Ascott Reit) and Ascott Business Trust (Ascott BT) pursuant to a stapling deed dated 9 September 2019 and each stapled security consists of one Ascott Reit Unit and one Ascott BT Unit and is treated as a single instrument.

Ascott Residence Trust Management Limited (Reit Manager) was appointed manager of Ascott Reit in accordance with the terms of the trust deed dated 19 January 2006 (as amended) between the Reit Manager and DBS Trustee Limited, as the trustee of Ascott Reit (Trustee). Ascott Business Trust Management Pte. Ltd. (Trustee-Manager) was appointed the trustee-manager of Ascott BT in accordance with the terms of the trust deed constituting Ascott BT dated 9 September 2019 (as amended) (collectively, Trust Deeds).

It should be noted that the Trustee-Manager was only incorporated on 2 August 2019 and Ascott BT only became a registered business trust on 30 December 2019. Accordingly, references to actions taken by the Reit Manager and the Trustee-Manager (collectively, Managers) should be read taking this into account.

We, as the Managers, set the strategic direction of ART and its subsidiaries on any investment or divestment opportunities for ART and the enhancement of the assets of ART in accordance with the stated investment strategy for ART. The research, evaluation and analysis required for this purpose are coordinated and carried out by us as the Managers.

As the Managers, we have general powers of management over the assets of ART. Our primary responsibility is to manage the assets and liabilities of ART for the benefit of the stapled securityholders of ART (Stapled Securityholders). We do this with a focus on generating rental income and enhancing asset value over time so as to maximise returns from the investments, and ultimately the distributions and total returns, to Stapled Securityholders.

Our other functions and responsibilities as the Managers include:

  1. using our best endeavours to conduct ART's business in a proper and efficient manner;

  2. preparing annual business plans for review by the directors of the Managers (Directors, each a Director), including forecasts on revenue, net income, operating expenses and capital expenditure, explanations on major variances to previous years' financial results, written commentaries on key issues and underlying assumptions on rental rates, operating expenses and any other relevant assumptions;

  3. ensuring compliance with relevant laws and regulations, including the Listing Manual of Singapore Exchange Securities Trading Limited (SGX-ST) (Listing Manual), the Code on Collective Investment Schemes (CIS Code) issued by the Monetary Authority of Singapore (MAS) (including Appendix 6 of CIS Code (Property Funds Appendix)), the Business Trusts Act (Chapter 31A of Singapore), the Business Trusts Regulations 2005 (BTR), the Securities and Futures Act (Chapter 289 of Singapore), written directions, notices, codes and other guidelines that MAS may issue from time to time, and the tax rulings issued by the Inland Revenue Authority of Singapore on the taxation of ART and Stapled Securityholders;

  4. attending to all regular communications with Stapled Securityholders; and

  5. supervising the relevant property manager which performs the day-to-day property management functions (including marketing, promotion, operations coordination and other property management activities) for ART's properties.

The Managers also consider sustainability issues (including environmental and social factors) as part of their responsibilities. ART's environmental sustainability and community outreach programmes are set out on pages 85 to 93 of the Annual Report.

ART is externally managed by the Managers. The Managers appoint experienced and well qualified personnel to run their day-to-day operations.

The Managers were appointed in accordance with the terms of the Trust Deeds. The Trust Deeds outline certain circumstances under which the Managers can be removed. In the case of Ascott Reit, by resolution passed by a simple majority, and in the case of Ascott BT, by 75% of Stapled Securityholders present and voting at a meeting of Stapled Securityholders duly convened and held in accordance with the provisions of the Trust Deeds.

The Managers are wholly owned subsidiaries of CapitaLand Limited (CapitaLand) which holds a significant stapled securityholding interest in ART. CapitaLand is a long-term real estate developer and investor, with a vested interest in the long-term performance of ART. CapitaLand's significant stapled securityholding interest in ART demonstrates its commitment to ART and as a result, CapitaLand's interest is aligned with that of other Stapled Securityholders. The Managers' association with CapitaLand provides the following benefits, among other things, to ART:

  1. a stable pipeline of property assets through CapitaLand's development activities;

  2. wider and better access to banking and capital markets on favourable terms;

  3. fund raising and treasury support; and

  4. access to a bench of experienced management talent.