Manulife US REIT - Annual Report 2020

NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 December 2020 These notes form an integral part of the financial statements. 1 GENERAL Manulife US Real Estate Investment Trust (the “Trust” or “Manulife US REIT”) is a Singapore real estate investment trust constituted pursuant to a trust deed dated 27 March 2015 (as amended and restated) (the “Trust Deed”) made between Manulife US Real Estate Management Pte. Ltd. (the “Manager”) and DBS Trustee Limited (the “Trustee”). The Trustee is under a duty to take into custody and hold the assets of the Trust and its subsidiaries in trust for the Unitholders of the Trust. The Trust and its subsidiaries are collectively referred to as the “Group” and individually as “Group entities”. The Trust was admitted to the Official List of Singapore Exchange Securities Trading Limited (the “SGX-ST”) on 20 May 2016. The registered office and principal place of business of the Manager is located at 8 Cross Street, #16-03 Manulife Tower, Singapore 048424. The principal activity of the Trust is investment holding. The principal activities of the Trust’s subsidiaries are to own and invest, directly or indirectly, in a portfolio of income-producing office real estate in major markets in the United States, as well as real estate-related assets. The primary objective of the Group is to provide Unitholders with regular and stable distributions and to achieve long-term growth in distributions and the net asset value per Unit, while maintaining an appropriate capital structure. The consolidated financial statements relate to the Trust and its subsidiaries. The Trust has entered into several service agreements in relation to the management of the Trust and its property operations. The fee structures of these services are as follows: (a) Manager’s fees The Manager is entitled under the Trust Deed to receive the following remuneration for the provision of asset management services: Base fee Pursuant to the Trust Deed, the Manager is entitled to a base fee of 10.0% per annum of Trust’s annual distributable income (calculated before accounting for the base fee and the performance fee). The base fee is payable to the Manager either in the form of cash or Units as the Manager may elect, in such proportions as may be determined by the Manager. The Manager has elected to receive 100.0% of its base fee in the form of Units for the financial years ended 31 December 2020 and 31 December 2019. The portion of the base fee, payable either in the form of cash or Units, was payable quarterly in arrears for the financial year ended 31 December 2019. Following the amendments to Rule 705(2) of the SGX-ST Listing Manual which took effect from 7 February 2020, Manulife US REIT has adopted half-yearly reporting for its financial statements with effect from the financial year ended 31 December 2020. Consequently, the frequency of payment of the base fee payable has been changed from quarterly to semi-annually basis with effect from the first half of financial year ended 31 December 2020. Where the base fee is payable in Units, Units will be issued based on the volume weighted average price for a Unit for all trades transacted on SGX-ST in the ordinary course of trading for a period of 10 business days (as defined in the Trust Deed) immediately preceding the relevant business day. 127 ANNUAL REPORT 2020