Information Memorandum Grande Hospitality Real Estate Investment Trust (GAHREIT)

Transcription

1 Information Memorandum Grande Hospitality Real Estate Investment Trust (GAHREIT) 1. REIT Manager One Asset Management Limited 2. REIT Manager Address 9 th and 24 th Floor, Siam Piwat Tower Building, 989 Rama 1 Road, Patumwan, Bangkok, Telephone: Fax: Website: 3. Trustee BBL Asset Management Company Limited 4. Trustee Address 7 th, 21 st and 26 th Floor, 175 Sathorn City Tower, South Sathorn Road, Sathorn, Bangkok Telephone: Fax: Website: 5. Listing Date 3 November Type of Listed Security A total of 175,500,000 unit trusts (at a par value of THB 10 per unit, with a total value of THB 1,755,000, IPO Price THB 10 per unit 8. Secondary Market The Stock Exchange of Thailand ( SET ) 9. Project Background Grande Hospitality Real Estate Investment Trust ( GAHREIT or the REIT ) is a real estate investment trust (REIT) which is established with the purpose of investing in the freehold right of the immovable properties, land, building and constructions which are component of the building and construction as well as system, fixtures and facilities. Moreover, the REIT invests in the freehold right on the movable properties, furniture, equipment, tools and decoration that are attached and unattached including any other equipment for the objective of decorating or facilitating hotel guests and/or customers of the Sheraton Hua Hin Resort & Spa Project which is located and/or attached in the outside and inside area of the Sheraton Hua Hin Resort & Spa Project. Further, this includes the rights related to the properties which are Page 1

2 necessary and appropriate for the operation of the Sheraton Hua Hin Resort & Spa from Honor Business Company Limited ( Honor Business ) to procure its benefit from such immovable properties and movable properties by ways of leasing out of such properties invested by REIT, and by performing any other relevant and necessary acts in accordance with the regulations and letters announced by Office of the Securities and Exchange Commission (the Office of SEC ). The REIT invests in the immovable properties and movable properties in the aggregate value of THB 1,750 million. One Asset Management Limited ( ONEAM or the REIT Manager ), in its capacity as the settler and the REIT manager, has obtained the approval from the Office of SEC to offer unit trusts of the REIT to the public on 2 October 2017 in accordance with letter of Kor-Lor-Tor. Jor-Cor 1658/2560 regarding the Application for Permission to Issue and Offer for Sale Unit Trusts to Public Investors. ONEAM offered the unit trusts for sale in total of 175,500,000 units at an offering price of THB per unit to investors who are 1) Grande Asset Hotels & Property Public Company Limited and/or its related parties 2) institutional investors 3) retail investors during 2-6 October Date of REIT Establishment 10 October Project Description Specific, Fully Paid and Non-redeemable Real Estate Investment Trust (REIT) Page 2

3 12. Project Life Unspecified 13. Investment Objective For the purpose of raising fund from general public investors, the REIT manages the money obtained from the fundraising at the total amount of THB 1,755 million and invests in the freehold right of land, building and constructions which are component of the building and construction as well as system, fixtures and facilities and the freehold right of movable properties, furniture, equipment, tools and decoration that are attached and unattached including any other equipment for the objective of decorating or facilitating hotel guests and/or customers of the Sheraton Hua Hin Resort & Spa Project which is located and/or attached in the outside and inside area of the Sheraton Hua Hin Resort & Spa Project including the rights related to the properties. 14. Investment Policy Direct Investment in the Main Assets and Equipment The REIT shall invest in the freehold or leasehold rights of the immovable assets (including the subleasehold rights of the immovable assets) and the assets which are the component parts and equipment of the aforesaid immovable assets. The types of assets in which the REIT shall invest are the hotel building including the other immovable assets related to the hospitality businesses which support the leasing out of the said hotel building such as the immovable assets used in shop, restaurant, spa, convenience store and other assets which support the investment of the REIT. Indirect Investment in the Main Assets and Equipment For the REIT to invest indirectly in the main assets, the investment has to be an investment by holding the shares issued by a company, which is set up with the same objective as the REIT, in the amount not less than 99 percent of the total paid-up shares and not less than 99 percent of the total voting rights in accordance with other related notifications and orders as prescribed or amended in the future by Securities and Exchange Commision (SEC) or the Office of SEC. Page 3

4 14.1. Characteristics of the Assets Illustration of the Sheraton Hua Hin Resort & Spa Project Illustration Showing the Layout of Sheraton Hua Hin Resort & Spa Project Source : Grande Asset Hotels & Property Public Company Limited The Sheraton Hua Hin Resort & Spa Project was completed and began the operation in August It is situated on Cha-Am beach, approximately 200 kilometers away from Bangkok, comprised of 2 unadjacent land (land title deed and land title deed 84321) with land area of approximately 27 Rai 3 Ngan and 59 Square Wah. Moreover, the Sheraton Hua Hin Resort & Spa Project has building area of approximately 46,205 square meters, comprising of eight 2-storey guest building surrounded by lagoon-style swimming pool with the area of 5,700 square meter and 560-meter long. In addition, there is a total of 240 guest rooms with 7 type of room as follows: Page 4

5 No. Room Type Area (sq.m.) No. of Keys (Keys) Deluxe 1 Garden View Garden Terrace Lagoon View Lagoon Access/Access Club Ocean Front Suite 6 Lagoon Suite Ocean Suite Total 240 Source : The Sheraton Hua Hin Resort & Spa Project is located at 1573 Phet Kasem Road (Thailand Route 4), Tambon Cha-Am, Amphur Cha-Am, Phetchaburi Province 76120, opposite to Fly Now Factory Outlet. Furthermore, the Sheraton Hua Hin Resort & Spa Project is 125-meter wide beachfront project, within approximately 4.5 kilometers of Hua Hin s airport and within 10 kilometers of Hua Hin Railway Station. As the Sheraton Hua Hin Resort & Spa Project is located 200 kilometers away from Bangkok, it can be reached by private car, shuttle bus or van which takes approximately 2 hours or by boarding the train which takes approximately 4-5 hours Revenues and Operating Results The Sheraton Hua Hin Resort & Spa Project is an upper-upscale (5-star) resort, starting its operation since August 2007, with a total of 244 guest rooms where 240 guest rooms are for operation and 4 guest rooms are for executives benefits. It has an occupancy rate with a positive growth prospect where the occupancy rate in 2013 and 2015 was over 70% since there were no external factors affecting the tourism industry. However, in 2016, the occupancy rate decreased from the prior year to 63.8% due to unexpected events occurred that affects the tourism industry as follows: August 2016: Four bomb blasts in Hua Hin October 2016: Great tragedy occurred in Thailand The Sheraton Hua Hin Resort & Spa Project s operating results for the period of 3 years, after deducting Page 5

6 the operating expenses of the Sheraton Hua Hin Pranburi Project amounting THB 7.72 million per annum, are as follows: Unit: million THB Jan Jun 2016 Occupancy Rate (%) / / Average Room Rate (THB/room/night) 3, , , , Room Revenue Food & Beverage Revenue Other Revenue Total Revenue Total Expenses Operating Profit Remark: /1 Occupancy rate in 2014 and 2016 showed a decrease as there was political crisis in 2014 and there were bomb blast in Hua Hin and Great Tragedy in Thailand in Asset Value Both appraisers have evaluated the asset value of the REIT s investment which has taken into account the benefit procurement structure of the REIT into consideration, summary of detail as follows: Appraiser Knight Frank Chartered (Thailand) Co., Ltd. The Valuation & Consultants Co., Ltd. Appraisal Value THB 2,079 million THB 1,878 million Appraisal Date 15 February February 2017 Approach Income Approach Income Approach Date of Appraisal Report 8 May May 2017 The financial advisors and the REIT manager have reviewed the main assumptions for evaluating the REIT s investment, conducted by the appraisers, where there is no reason to believe that the said main assumptions for evaluating are not reasonable when compared to the average historical performance and outlook of the investment, including the outlook of the hotel industry in Hua Hin and Cha-Am District. Moreover, the aforementioned assumptions are based on historical performance, economic outlook analysis, tourism industry, hotel industry and competition in the industry. However, the assumptions might not reflect the business plan and marketing strategies, including hotel renovation plan, for the benefit of Page 6

7 policy to increase the room rates. In the case that financial advisor evaluates the asset value by using discounted cash flow method (Income Approach) and using assumptions that the financial advisor deemed as appropriate. For instance, occupancy rate at 71.50%, which is based on the historical performance of the Sheraton Hua Hin Resort & Spa Project for the year which is not affected by external factors that are out of hotel operator s control. Moreover, other assumptions including room rate, costs and expenses and etc. which considered the business plan of the hotel for renovating of Sheraton Club s Lounge and related marketing plan. Thus, when the financial advisor applies the conservative discount rate at 10% which is the same discount rate used by one of the appraiser, the asset value equals is THB 1, million. With regards to the initial investment, the REIT invests in the Sheraton Hua Hin Resort & Spa Project with the investment value of THB 1,750 million. This investment value is considered from the appraisal value conducted by the two appraisers which have been approved by the Office of SEC. The REIT invests in the core properties at the price of THB 1,750 million which is the price that is lower than the lowest value of the appraisal value by approximately 6.82%. The REIT manager and financial advisor considered the price, as aforementioned, reasonable as the initial investment has high potential and consistency in generating income and is managed by international hotel chain. Moreover, the initial investment has 125-meter wide Cha-Am s beachfront located not far from Bangkok. Furthermore, it includes facilities and amenities, such as lagoon-style swimming pool and large conference facilities, which is considered as key competencies of the Sheraton Hua Hin Resort & Spa Project Procurement of Benefits One Asset Management Limited, in its capacity as the REIT Manager, has the objective of procuring benefits from the invested assets for trust unitholders. After the REIT has invested in the freehold right of core properties, the REIT shall be the owner of the land, building, construction and movable properties of the Sheraton Hua Hin Resort & Spa Project. Further, the REIT procures the benefits of the invested assets by leasing out to Honor Business for a total lease period of 15 years ( Initial Lease Term ). Upon the expiry of the Initial Lease Term and if Honor Business intends to renew the lease, the REIT agrees to grant Honor Business the right to request for negotiation with the REIT for renewing the lease agreement prior to other party (Right of First Refusal) by giving a written notice to the REIT prior to the beginning of the 2 nd year of the last renewal for the period of Initial Lease Term under the lease agreement and shall be entitled to renew the term at least 5 times for 3 years ( Second Lease Term ). In addition, Honor Business appoints Sheraton Overseas Management Corporation, a subsidiary of Marriott International, Inc., as a hotel operator. The rentals to be received by the REIT is only fixed rentals, divided into the rentals for leasing immovable Page 7

8 properties and leasing of movable properties, which the payment shall be made on a monthly basis. of rentals of immovable and movable assets in year 1 15 as follows: Year Annual Rental (THB) / ,000, ,000, ,000, ,960, ,960, ,960, ,337, ,337, ,337, ,157, ,157, ,157, ,447, ,447, ,447,327 Remark: /1 Annual rental excludes VAT lease of movable assets Ratio of monthly rental is considered from seasonalility of the Sheraton Hua Hin Resort & Spa Project s operation, detail as follows: Monthly Rental Month (Percentage of Annual Rental) January 14 Februray 12 March 8 April 6 May 6 June 4 July 6 August 4 September 4 October 10 Page 8

9 November 12 December 14 Total 100 In addition, the REIT reserves the right to change the approach of managing core properties, in terms of changing lessee and utilizing building and constructions that are invested by the REIT. Furthermore, the REIT will retain the business nature of the Sheraton Hua Hin Resort & Spa Project and may make an improvement, modification, development and enhancement of the invested properties for the best interest of the REIT. Morever, the REIT may proceed in constructing or modifying the core properties by obtaining or transferring of any license(s) required such as building permits for the best interest of the Sheraton Hua Hin Resort & Spa Project as deemed appropriate by REIT Manager. In addition, procurement of benefits of the REIT shall comply with those stipulated, relieved, instructed, announced and rules by the Office of the SEC and/or any other competent authority under the laws. Summary of Rent Guarantee Agreement Topic Lessor Lessee Rent Guarantor BBL Asset Management Co., Ltd. as Trustee of Grande Hospitality Real Estate Investment Trust ( REIT ) Honor Business Co., Ltd. ( Honor Business ) Grande Asset Hotels & Property Plc. ( GRANDE ) Page 9

10 Agreements between Both Parties 1. GRANDE agrees to be bound as gurantor of the income that REIT will receive from the Lessee and as joint debtor with the Lessee in the amount and for the period specified in the property lease agreement and undertaking agreement ( Guaranteed Income ). As long as Honor Business is the lessee and in the event that Honor Business cannot pay the rentals or pay in full amount of the rentals pursuant to the property lease agreement, GRANDE agrees to pay the shortfall rentals to REIT as prescribed in the property lease agreement. 2. All parties agree that in the event that GRANDE fails to comply with the undertaking agreement with respect to income guarantee (except in the event of force majeure or not due to GRANDE s fault pursuant to the details specified in the undertaking agreement), the Lesee shall be deemed to be in default of the property lease agreement and the REIT shall be entitled to terminate the property lease agreement and/or claim damages from the Lessee. Information of the Guarantor of Rentals (GRANDE) Grande Asset Hotels and Property Public Company Limited ( GRANDE ) is registered on 21 April 1988 and listed on in the Stock Exchange of Thailand on 10 Februrary 2004 as engaged in hotel business, and tourism and leisure service. As of 30 June 2017, GRANDE has registered capital in amount of THB 2,889,040,000 of which comprises of 2,889,040,000 ordinary shares with par value of THB 1 per share, and paid-up capital in amount of THB 2,889,039,237. GRANDE received a company rating at BB+ with stable outlook from a credit rating agency in Thailand namely TRIS Rating on 24 March The rating reflects GRANDE s experience in property development, its relationships with successful hotel brands and the competitiveness of its hotel properties location. GRANDE has put in place a hybrid business strategy (Hybrid) so as (1) to conduct business in real estate development for short and medium term revenue recognition and (2) invest in the hotel business which is investing in property to achieve long-term revenue recognition. The purpose of such strategies is to reduce dependency on one business and to add value to business for long term property. GRANDE divides business operation and business strategy into 2 categories as follows: Page 10

11 1. Real Estate Development Business GRANDE focuses on its investment in a prime location of the business areas, or tourist attraction with high potential for development surrounding with convenient transportation and facilities such as hotels, schools, entertainment venues, shopping centers, hospitals, etc., as well as a focus on medium-to-high income customers who desire to have comfortable lifestyle. All existing real estate development projects by GRANDE are as follows: HYDE Sukhumvit (construction was done and there are 6 units to be sold and transferred as of 30 June 2017); HYDE Sukhumvit 11 (during construction and transferring will be done at the end of 2017); Huahin Blue Lagoon Resort Construction was done and there are 4 units to be sold and transferred as of 30 June 2017); The Trendy Condominium (construction was done and there are 2 units to be sold and transferred as of 30 June 2017); Rayong Project (in progress of development); and Sukhumvit 59 Project (in progress of development) 2. Hotel Business GRANDE focuses on investing in 5-star hotels as an investor in property development and has a contract with an experienced hotel management company and network around the world to manage the property. At present, Starwood Hotels & Resorts Worldwide (currently well known as Marriott International, Inc.) and Hyatt International Corporation are the management company of GRANDE. In investing in the hotel business, GRANDE will invest in a convenient location in the business areas. In addition, GRANDE has a policy to diversify the risk of investing in the hotel business to the provinces or abroad in the future by choosing a location where it is a tourist destination and having a wide range of target customers, hotels of GRANDE are as follows: Hotels in the center of Bangkok includes the Westin Grand Sukhumvit and Hyatt Regency Bangkok Sukhumvit (during construction and expected to commercial operation date (COD) at the beginning of year 2018) (both hotels are owned by Grande Asset Hotels & Properties Plc.) ; and Hotels are located in a prime tourist area: Sheraton Hua Hin Resort & Spa and Sheraton Hua Hin Pranburi Villa under management of GRANDE s subsidiaries namely Honor Business Co., Ltd. and future hotel projects located in Rayong province (in process of development) Page 11

12 14.5. Target Customers The Sheraton Hua Hin Resort & Spa Project s core revenue stems from room revenue and food & beverage revenue. The major nationality of the Sheraton Hua Hin Resort & Spa Project s customers is Thais, accounting for 48.5%, followed by Asia continent, accounting for 32.2%. Further, the hotel guests can be divided into 2 main groups as follows: 1. Group or MICE includes group of hotel guests travelling for meeting, activities or events and/or for guest room services via agents. 2. Leisure includes retail guests that book the hotel through various distribution channels, including via agents Jan-Jun 2017 Room Revenue Room Revenue Room Revenue Leisure 61% 62% 51% 52% 50% 50% MICE 38% 37% 47% 47% 49% 49% Others* 1% 1% 2% 1% 1% 1% Remark: * Group of corporations nearby that have contract in using hotel services with the Sheraton Hua Hin Resort & Spa Project. Hotel Guests Proportion By Nationality 2016 Canada 0.30% Australia 1.60% Middle East 0.90% United States 2.50% Africa 0.20% Europe 13.80% Asia 32.20% Thailand 48.50% Source : Sheraton Hua Hin Resort & Spa Project Operating Result Moreover, food & beverage revenue can be divided into 2 main groups: outlet and banquet. The outlet group includes 5 restaurants and bars, all located in the site (namely The Deck, Salas, InAzia, Sundara, Luna Lanai) and room service (Twelve Twelve). The banquet group includes a conference facilities with Page 12

13 two flagship room namely The Chandelier and Grand Ballroom Distribution Channels The REIT leased out the core properties to Honor Business, as the sole lessee. Currently, the Sheraton Hua Hin Resort & Spa Project has its marketing channel for public relation and distribution via various distribution channel such as social network, online travel agent or OTA (Agoda.com, Booking.com, TripAdvisor, etc.), hotel s website and Starwood. The marketing department of the hotel has allocated budget for advertisement and promotion under the name of Sheraton Hua Hin Resort & Spa to be the top on various online medias which are popular to customers Competition 1) Tourism Industry in Thailand In 2016, the number of foreign tourist arrivals in Thailand is 32,573,545 persons, an increase of 8.86% compared to 2015, as a result of the tourists from Russia and China, increased by 22.65% and 10.56%, respectively. In 2017, the number of foreign tourist arrivals is expected to be a total of 35 million tourists. According to Ministry of Tourism and Sports, throughout 2017, Thailand s tourism industry is expected to rise by 5%, in accordance with global tourism industry, and tourism s receipt to grow by 8%. The supporting factors include (1) relatively low air fares for air travelers due to the rising in competition by low-cost airlines, (2) strengthening of the dollars and euros currency, (3) new destinations from airlines, (4) increasing number of European tourists selecting Thailand as the new destination over Turkey and (5) various promotion packages for tourism industry as demanded by all tourists. 2) Tourism Industry in Prachuap Khiri Khan (Hua Hin) and Phetchaburi Province (Cha-Am) According to the information by Tourism Authority of Thailand, in 2015, the number of domestic and foreign tourists that travel to Hua Hin and Cha-Am are 4,835,371 tourists and 5,923,321 tourists, respectively. This shows a compounded annual growth rate (CAGR) from 2007 to 2015 of 6.81%. Moreover, Hua Hin s and Cha-Am s tourism revenue are THB 28, million and THB 20, million, respectively. Further, the compounded annual growth rate (CAGR) of the revenue for both destinations from 2007 to 2015 is 13.29%. According to the information by Tourism Authority of Thailand, in 2016, the hotel occupancy rate of Prachuap Khiri Khan province and Phetchaburi province are 66.13% and 70.53, respectively, with a total of number of tourist arrivals at million tourists. Thus, contributing THB 52, million of total revenue from tourism to Prachuap Khiri Khan province and Phetchaburi province. Page 13

14 3) Market Conditions in Hua Hin and Cha-Am The supply of hotel rooms in Hua Hin and Cha-Am province is showing a significant growth throughout the years, based on the total number of hotel rooms in Hua Hin and Cha-Am province. This indicates that players in Hua Hin and Cha-Am province market are expecting higher visitor arrivals growth in the future. This shows a compounded annual growth rate (CAGR) of 4.33% and 3.14% from in Hua Hin province and Cha-Am province, respectively. Thus, over the past 7 years, the supply in Hua Hin and Cha-Am province had seen a positive trend and moved in the same direction. Based on the research conducted by Jones Lang LaSalle (Thailand) Co., Ltd., there would be a new supply of rooms added in Hua Hin and Cha-Am province by 477 rooms in 2016 and is expecting additional supply of 1,361 rooms in 2017 if all projects materialize. Thus, the hotel supply in Hua Hin and Cha-Am province is expected to continue to grow in the future. In conclusion, based on the hotel industry supply and demand above, the implication is that the Hua Hin and Cha-Am province are destination with supportive outlook, hence favorable to investment. Moreover, in reference to research conducted by Jones Lang LaSalle (Thailand) Co., Ltd., Hua Hin and Cha-Am province s outlook remains positive in terms of tourist arrival growth, domestic and international. In addition, Hua Hin and Cha-Am province are expected to remain popular with the domestic and their European source markets. Furthermore, the famous golf courses in Hua Hin and Cha-Am province has been attracting tourist arrivals from Asian countries Summary of Key Terms of Agreements Please examine additional details in the Appendix 2: Summary of Key Terms of Agreements Relevant to the REIT Future Investment Policy The REIT may invest in other properties in addition to the initial investment in the future. The REIT s future investment shall be in accordance with the regulations specified in the Notification of Capital Market Supervisory Board Tor-Jor 49/2555 including other related notifications and orders as prescribed or amended in the future by Securities and Exchange Commission (SEC) or the Office of SEC. Page 14

15 Prevention of Conflict of Interest Polcify for transaction between the REIT and the REIT manager or the REIT s connected person. The transactions between the REIT and the REIT manager or the REIT manager connected person, the compliance with the following terms and conditions: 1) The essence of the transaction shall be in accordance with term specified in (1) (B) of the Trust Deed. 2) The approval process of the transaction between the REIT and the REIT manager or REIT manager s connected person, in addition the the information stated in the filing and prospectus, must comply with the following steps: (i) Obtaining the trustee s approval that the transaction is in accordance with the Trust Deed and related laws; (ii) In the case of the transaction exceeding THB 1 million or from 0.03% of the REIT s NAV, whichever is higher, must obtain approval from the Board of Directors of the REIT manager. (iii) In the case of the transaction exceeding THB 20 million or from 3% of the REIT s NAV, whichever is higher, must obtain approval from the trust unitholders meeting with at least 3/4 of total votes of the trust unitholders attending the meeting and entitled to vote. In case of the transaction being the acquisition or diposition of the core properties, the calculation nof value shall be in accordance with the value for acquisition or disposition of all assets of each project resulting in that such project is ready to earn income, which includes the assets connected to such project. 3) The transaction between the REIT and the REIT manager or REIT manager s connected person which has already been clearly stated in the filing and prospectus, the procedures for requesting the approval of the trustee or trust unitholders must be in accordance with the terms specified (1) (B) of the Trust Deed. Moreover, in the case of request for the trust unitholders resolution, the notice of the trust unitholders meeting must contain the financial advisor s opinion to support such request Environmental Impact - None - Page 15

16 Risk Factors Risk Relating the Core Properties and Operation (Please examine additional details in the Prospectus specified in Part 2: Risk Factors) 1) The risk from economic volatility and domestic tourism business conditions. 2) The risk from higher competition in the hotel and tourism industry. 3) The risk from natural disaster, accidents and terrorism. 4) The risk related to compensation from insurance. 5) The risk related to business licenses. According to the law, the hotel business license shall be renewed upon the expiry date. However, in the case that the Lessee s hotel business license is terminated, has not been renewed or the Lessee is unable to obtain the license, this may result in an adverse effect to the Lessee. For instance, the Lessee is unable to operate the hotel business, hence not being able to pay the rentals to the REIT and not performing on the terms and responsibilities under the property lease agreement. If the Lessee is not able to resolve this issue to obtain the license of hotel business, then the REIT has the right to terminate the agreement and claims for damages in accordance with the law due to the default until the REIT can find the new lessee. Currently, the Lessee s hotel business license (no. 11/2555) is effective only until August 9, Honor Business has file for an extension of of hotel business license with the registrar according to the Hotel Act B.E (2004) on August 7, It is expected that the hotel business license will be renewed by October The period of renewing the hotel business license is generally about 6 months. In spite of that during the application of renewal of the hotel business license, the Lessee is capable of operating the hotel as normal. Honor Business, as its capacity as the leseee, shall be responsible for obtaining the said license and costs of obtaining it. Apart from rules and regulations and guidelines of approval by agencies related to the hotel business license s renewal process, there may be changes in the future which may cause delay on application or unable to renew the license. 6) The risk of compliance with environmental laws and order may result in significant cost to the REIT. 7) The risk of compliance with government orders relating to building and constructions. 8) The risk of land reclamation. 9) The risk from renovation of immovable properties. 10) The risk from costing more than the FF&E s reserve to renovate immovable Page 16

17 properties. 11) The risk of using walkway to the beach access of the Sheraton Hua Hin Resort & Spa Project. 12) The risk from changing hotel operator. Honor Business has hired Sheraton Overseas Management Corporation which is a subsidiary of Marriott International, Inc. for managing the Sheraton Hua Hin Resort & Spa Project. As a result, the Sheraton Hua Hin Resort & Spa Project has continuously attracted customers to use its services despite of having many competitors in Hua Hin district. However, if there is change in the hotel operator in the future from Sheraton to other hotel operators, then it may adversely affect the hotel s ability to generate income and the competitiveness Risk Relating to the REIT s Operation 1) The risk that the lessee does not renew the lease agreement at the end of the term. The risk that the Lessee may not renew the lease agreement upon the expiry of the short-term lease agreement with period of 3 years within the Initial Lease Term The procurement of benefit from the REIT s investment is by leasing out the core properties to the lessee. The REIT and Hono Business enter in to the lease agreement of immovable and movable properties with a period of 3 years. Each party has the option to renew the lease by written notice to the other party at least 6 months in advance before the expiry of the Lease Term under this agreement and has the right to renew 4 times for 3 years each ( Initial Lease Term ). Each party can require the other party to renew the lease and if the right to renew the lease is exercised as aforesaid, the other party agrees to renew the lease according to the period mentioned earlier in accordance with the property lease agreement which is a short-term lease agreement. (s are shown in Propsectus in Part 2 of Clauses 4.2 Summary of Key Terms of Draft Property Lease Agreement ) However, if the REIT is unable to renew the lease term and/or to claim from Honor Business or not in full amount, then the REIT manager shall search for the new lessee as a replacement which may be delayed or unable to be replaced. Thus, the REIT loses the opportunity to generate income continuously and affects the cash flow and performance of the REIT which may cause the Trust Unitholders to bear risk from no income in the amount or within the expected period. Page 17

18 The risk that the Lessee may not renew the Second Lease Term Apart from the right to renew the lease upon completion of the Initial Lease Term, if the Lessee desires to renew the lease, the REIT agrees to grant the Lessee the right to request for negotiation with the REIT for renewing the lease agreement prior to other party (Right of First Refusal) by giving a written notice to the REIT prior to the beginning of the 2 nd year of the last renewal period of Initial Lease Term under this agreement and will be entitled to renew the term at least 5 times for 3 years ( Second Lease Term ). However, if there is a written notice for the request of renewing the lease of the said Lease Agreement, the REIT agrees to enter into negotiation with the Lessee under the conditions specified in the lease agreement. Both parties agree to commence negotiations on the terms and conditions which may include rental rates of the Second Lease Term promptly at the discretion of the REIT which shall be considered together with the Lessee. Despite of the case of Second Lease Term which the Lessee has the right to request for negotiation with the REIT for renewing the lease agreement prior to other party (Right of First Refusal), there is a risk that both parties may not have agreed on the terms and conditions which may include rental rates of the Second Lease Term prior to the period of prescribed in the lease agreement, resulting in the right to commence negotiations of the Second Lease Term to be terminated. However, during the negotiation of the Second Lease Term, in the case that there is other party offering a better terms including the rental rates than the Lessee, the REIT has the right to select other party to be the new Lessee. The consideration shall be mainly on trust unitholders benefit. (s are shown in Propsectus in Part 2 of Clauses 4.2 Summary of Key Terms of Draft Property Lease Agreement ) 2) The risks from the lessee s capabilities to pay the rental. The REIT s main source of income is from the rentals from the Lessee under the lease agreement. The REIT s income may be affected directly if the Lessee has financial problem, hence affecting the Lessee s capabilities to pay the rental or the Lessee defaults or terminates the lease agreement prior to the expiry date and the REIT is unable to find new lessee as a replacement. Based on the yearly historical performance of the Sheraton Hua Hin Resort & Spa Project, the earning before interest expense, taxes, depreciation and amortization Page 18

19 (EBTIDA) is lower than the rentals rate that shall be paid to the REIT. However, the REIT has guidelines to reduce the risk as follows: 1. Defined in the undertaking agreement between the REIT and GRANDE that as long as Honor Busines is the Lessee under the property lease agreement, GRANDE agrees to provide financial support; 2. Defined in the rent guarantee agreement that GRANDE agrees to be bound as gurantor of the income that REIT will receive from the Lessee and as joint debtor with the Lessee in the amount and for the period specified in the property lease agreement and undertaking agreement; 3. The REIT has specified in the property lease agreement between the REIT and the Lessee that the Lessee has place a deposit in the form of cash amounting at THB 88.0 million where the deposit is divied into 2 parts. (s are shown in Propsectus in Part 2 of Clauses 4.2 Summary of Key Terms of Draft Property Lease Agreement ) 3) Other relevant risk relating to the REIT s operation are as following (Please examine additional details in the Prospectus specified in Part 2: Risk Factors) (1) The risk from the party s failure to comply with the relevant agreements. (2) The risk from Honor Business breaches or fails to comply with the representation given related to the REIT s investment. (3) The risk from due diligence before investment. (4) The risk from changes of accounting standard and relevant laws. (5) The REIT s net asset value may not be the actual value that the REIT shall receive from the asset disposal or termination of REIT. (6) The risk form tax. (7) The risk from distribution of profits to trust unitholders Risk Relating to Investment in Trust Units of the REIT (Please examine additional details in the Prospectus specified in Part 2: Risk Factors) 1) The risk relating to economic and business risks. 2) The REIT is a trust which is during the establishment and has no past operating results for investors to examine before making investment. 3) The assumptions in the pro-forma income statements and forecasted of profit distribution are subjected to uncertainties, risk factors and fluctuation of business, Page 19

20 economic and financial uncertainties including concerning rules and competition which may affect actual operating results to differ significantly from projections. 4) The risk from the REIT s operating results are subjected to the ability of lessee and hotel operator in procuring and managing the REIT s initial investment. 5) The trust units price may change after the trust unit s offering. 6) The risk of liquidity inadequacy in trust unit s trading activities in secondary market. 7) The risk resulting from determining the trading price of trust unit based on net asset value (NAV) of the REIT. 8) The risk that may occur from termination of the entire unit trust offering. 15. Termination of REIT Upon the following events, the Trustee may terminate the REIT: 1) Number of trust unitholders decreases to less than 35 persons. 2) Disposal of core properties and the REIT Manager is unable to invest in the immovable properties at the overall value of no less than THB 500,000,000 or no less than 75 percent of the total asset value of the REIT within 1 year from the date of such asset disposal. 3) In case it is necessary to change the REIT Manager but the Trustee is unable to find a person with suitable qualifications to act as the new REIT Manager within the period announced by the Office of SEC from the date that the REIT Manager s obligations had ended and the Trustee has used its best effort to request for trust unitholders resolution to appoint the new REIT Manager but the new REIT Manager could not be appointed, in such case, Trustee shall request for trust unitholders resolution to terminate the REIT. 4) It is necessary to change the Trustee but a new trustee could not be appointed due to unavoidable causes and stakeholder has requested to the court for appointment of new trustee but appointment could not be made. 5) Trust unitholders meeting has passed a resolution to terminate the REIT under the regulations prescribed herein Trust deed. 6) Merger of the REIT with other REIT and related laws prescribe that the REIT shall be terminated. 7) Other causes announced by the Office of SEC or the SEC. 16. Procedures of the REIT Termination Upon termination of the REIT, the Trustee shall personally liquidate or arrange liquidator to settle debts and expenses in accordance with the following order: 1) Expenses from collection, distribution and allocation of assets. 2) Fees and tax and duties, which are due and outstanding. 3) Compensation of person under Section 29 or Section 52 of the Trust Act, expenses for lawsuit of Page 20

21 beneficiary under Section 44 Paragraph 3, Section 45 or Section 46 of the Trust Act and expenses relating or connecting to the management of the REIT which the Trustee is legally entitled to collect from the REIT and compensation of the Trustee. 4) Other debts In case the REIT s assets are not adequate for allocating for expenses or settlement of debt in any order in full, the Trustee shall settle debt in such order by distributing according to proportion of obligation. In case the expenses and debt under the first paragraph is deducted and the REIT has remaining assets, the Trustee shall allocate the remaining portion to the trust unitholders. However, if the REIT is terminated because the Trustee ceases operation, is liquidated or becomes bankrupt and a new trustee could not be appointed due to unavoidable causes pursuant to the regulations prescribed in the Trust Act, the liquidator or receiver, as the case may be, shall act on behalf of the Trustee to collect, distribute or allocate assets until completion. 17. Financial Advisor Baker Tilly Thailand Company Limited ( BTCAS ) Head Office Address : 175 South Sathorn Road, Sathorn Bangkok, Thailand Registrar Thailand Securities Depository Co., Ltd. Head Office Address : No. 93, The Stock Exchange of Thailand Building, Ratchadaphisek Road, Dindaeng District, Bangkok Auditor SP Audit Company Limited Head Office Address : 503/31 KSL Tower, 18 th Floor, Si-Ayutthaya Road, Khwang Phaya Thai, Khet Ratchathewi, Bangkok Accounting Period 1 January 31 December (the first accounting period shall end on 31 December 2017) 21. Dividend Distribution Policy - The REIT Manager shall pay distribution to trust unitholders no less than 90 percent of adjusted net profit of the accounting year. The distribution to be paid to trust unitholders consist of year-end distribution and interim distribution (if any) in each quarter. In this regard, the REIT Manager shall pay distribution to trust unitholders no more than 4 times per an accounting year. Only when the REIT has increased its capital, the REIT may pay distribution more than 4 times per an accounting Page 21

22 year for the benefit of existing trust unitholders (payment of distribution shall start during the first accounting period of the REIT, if the REIT has sufficient profit for distribution payment in such accounting period.) - However, the adjusted net profit under the previous paragraph shall be adjusted by the following items: Deduction of unrealized gain from appraisal or appraisal review of the REIT s asset value as well as the adjustment by other items under the guidelines of the SEC to be consistent with the REIT s cash position. Deduction of money reserved for settlement of loan or obligation from the REIT s loan under the amount specified in the filing and prospectus or annual report, as the case may be. - In case the REIT has accumulated profit based on the REIT s adjusted net profit of each year as specified above the REIT Manager may pay distribution to the trust unitholders from such accumulated profit. - In case REIT has accumulated loss, REIT Manager will not make any distribution to trust unitholders. - In case distribution is paid to trust unitholders in each accounting period, the REIT Manager shall announce distribution payment to unitholders and close the trust unitholders register book to identify trust unitholders who are eligible for distribution payment, and shall pay such distribution to trust unitholders within the following period: - Year-End Distribution The REIT Manager shall pay year-end distribution within 90 days from the end of accounting period by paying within 30 days from the closing date of unitholders register book to prescribe rights of unitholders who are eligible for distribution payment. In the case profit distribution is paid in the first accounting year, if the REIT has the operating period of less than 3 months, the REIT manager reserve the right to consider accumulating the said profit distribution to be paid together with first profit distribution in the next accounting period. The consideration of annual distribution payment and fixing of distribution rate shall be at the discretion of the REIT Manager. If the value of announced distribution payment per unit trust during any year is lower or equivalent to THB 0.10, the REIT Manager reserves the right to Page 22

23 not pay distribution in such occasion and to accumulate such distribution to be paid together with distribution in the next occasion. - Interim Distribution The REIT Manager shall pay year-end distribution within 90 days from the end of accounting period by paying within 30 days from the closing date of unitholders register book to prescribe rights of unitholders who are eligible for distribution payment. The consideration of annual distribution payment and fixing of distribution rate shall be at the discretion of the REIT Manager. If the value of announced distribution payment per unit trust during any year is lower or equivalent to THB 0.10, the REIT Manager reserves the right to not pay distribution in such occasion and to accumulate such distribution to be paid together with distribution in the next occasion. 22. Restriction of Distribution Trust unitholders who are eligible to receive the distributions must be ones whose names appear in the trust unitholders register book on the book-closing date for distributions and each trust unitholder shall receive the distributions in proportion to the percentage holding. If it appears that any person or group of person holds the REIT s unit trusts exceeding the ratio prescribed by the notifications of the Office of SEC, such person or group of persons shall not be entitled to receive distribution payment for the portion the exceeds the ratio prescribed by notifications of the Office of SEC only. 23. Increasing/Decreasing of the REIT s Capital Causes for capital increase 1) For investment in the immovable properties, leasehold right of the immovable properties, or investment in the core properties of the REIT indirectly or additionally to the existing assets of the REIT under the relevant regulations and notifications of the Office of SEC. 2) For modification or repairing of the REIT s assets, including the immovable properties of the REIT or the immovable properties of which the REIT owns the leasehold right to be in good condition and ready for profit procurement or in accordance with the market state or changing of customers demand. 3) For modification or construction of the additional building on the land that the REIT owns or has leasehold right to procure profit for the REIT or in accordance with the market state or changing of customers demand. 4) In order to pay for loan or obligations of the REIT. 5) For investment in other assets pursuant to the regulations and ratio announced in related notifications of the Office of SEC. 6) For other causes as announced by Office of SEC and/or SEC. Page 23

24 7) For other causes as the REIT Manager deemed appropriate and necessary to increase the capital Procedures for capital increase 1) The capital increase of the REIT must not contravene or contradict with the intention of its establishment, Securities and Exchange Act the Trust Act, as well as other notifications, rules, or orders issued by virtue of such laws. 2) Capital increase shall occur only when no less than 3/4 of trust unitholders who attend the meeting and have voting rights in accordance with the following rules have approved the resolution: a. In case of capital increase by way of private placement to certain trust unitholders, no objection is made by trust unitholders who hold unit trusts altogether more than 10 percent of the overall votes of trust unitholders who attend the meeting and have voting rights to the capital increase. b. In case of the request of trust unitholders resolution for capital increase under the General Mandate shall be made only by explicit indication that allocation of new unit trusts from capital increase shall be in accordance with the ratio and regulations prescribed in related notifications of The SET Board of Governors regarding provisions, conditions and procedures of information disclosure, any other practice as to capital increase of the listed company applying mutatis mutandis and the guidelines given by the Office of SEC which are prescribed in details to be clear in practice (if any). In this regard, capital increase shall be completed within 1 year from the date of trust unitholders resolution approving capital increase. 3) In the cases of capital increase for investing in additional main assets, the procedures must be in accordance with the guidelines for acquisitions of main assets and equipment specified in the Trust Deed. In case of the transactions between the REIT and the REIT Manager, or a related person of the REIT Manager, the procedures must be taken in accordance with the Trust Deed. 4) The REIT Manager is approved by the Office of SEC to offer newly issued trust units Causes for capital decrease 1) The REIT has remaining excess liquidity from disposal of the immovable assets or leasehold right of the immovable assets or amortization of leasehold right of the immovable assets (if any). Nevertheless, the REIT must have no remaining retained earnings. 2) The REIT has increased its capital to acquire additional immovable assets but the Page 24

25 occurrence of interference happens and thereafter causes incapacity to acquire partial immovable assets under related agreements which are specified in the filing. 3) The REIT has increased its capital to acquire additional immovable assets but occurrence of interference happens and thereafter causes incapacity to acquire such happens. 4) The REIT has non-cash expenditures and there is no cause for it to be used for calculation of adjusted net profit of the REIT as prescribed in Clause 15 of this agreement. 5) Other cases which the trust unitholders pass a resolution to decrease the REIT s paidup capital Procedures for capital decrease 1) Capital decrease must not be against the purposes of the REIT establishment and the provisions of Securities and Exchange Act, Trust Act as well as notifications, rules or competent orders given under the aforesaid laws. 2) Trust unitholders approve the capital decrease by the votes with no less than 3/4 of the overall votes of trust unitholders who attend the meeting and have voting rights. 3) The REIT Manager shall decrease the paid-up capital only by reducing the par value of the trust units. 4) The REIT Manager shall make distribution on a pro-rata basis to the trust unitholders whose names are on the trust unitholder register book as of the book-closing date, by calculating the unit value for the reduction based on the net asset value of REIT on the book-closing date. Nevertheless, the payout from such capital decrease must not come from the profit of REIT. 5) The procedures for the capital decrease shall be in accordance the regulations and methods announced by the Office of SEC as well as those related regulations and methods which will announced in the future by the Office of SEC. 24. Transfer Restriction The trust units can be freely transferred without limitations, except in the following cases: 1. The transfer results in the total holdings of the trust units by foreigners exceeding 49 percent of all trust units issued as specified in the Trust Deed; or 2. The transfer results in the holding of unit trusts by any person, the REIT Manager, the Trustee or any related group of such person (if holding any) failing to comply with the rules and conditions prescribed by the notifications of SEC and other relevant notifications. Page 25

26 25. Issuance and Delivery of Trust Certificates The REIT Manager appointed the Thailand Security Depository Co., Ltd (the TSD ) to be the REIT s registrar of unit trusts and to provide depository service for the trust certificates which have been subscribed from this offering period. In other word, the subscribers are able to use the service of the TSD and immediately apply for the trade system through the Scripless System. This allows the subscribers to be able to trade their unit trusts as soon as the SET approves the commencement of the trade of trust units in the Stock Exchange of Thailand. The Script System is different from the scripless case in that the subscribers select to obtain physical trust certificates where the subscribers will not be able to trade their trust units in SET until they have obtained the trust certificate. Therefore, in this offering of trust units, the subscribers can ask the lead underwriter to provide them with any of the following options: In case that the subscribers wish to obtain trust certificates under their names, the registrar, Thailand Security Depository Co., Ltd, will deliver the trust certificates in accordance with the number of trust units allocated to the subscribers via mail responses to the name and address stated on the subscription form within 15 working days from the closing date of the REIT subscription (exclusive of date of closing). In this case, the allotted subscribers are not allowed to trade the trust units until they have received the trust certificates which the trust certificates might be delivered to them after the REIT s trust units are allowed to be traded in the SET. In the event that the subscribers wish to use TSD service by the depository of the trust units into the brokerage firm where the subscribers have had the trading account with. In this case, the TSD will issue the trust certificate in the name of Thailand Security Depository Co., Ltd for the depositor, record the amount of the REIT s trust units amount deposited by the brokerage firm and issue the receipt to the subscribers within 7 days from the subscription closing date. Also, the brokerage firm will record the number of the unit trusts deposited by the subscribers. In this case, the allotted subscribers can immediately trade their allotted unit trusts in SET as soon as the SET allows the trade in the stock market. In case the subscribers do not wish to obtain trust certificates but wish to use TSD service by depositing the trust units in the Issuer Account, member no. 600, the REIT will proceed to have the allotted trust units deposited with the TSD and the TSD will record number of trust units according the amount of trust units allocated to the subscribers into the Issuer Account, member no. 600, and issue the receipt to the subscribers by 7 working days from the closing of subscription date. If the subscribers wish to withdraw the trust units from the Issuer Page 26

27 Account, member no. 600, they may contact the TSD. In this regard, the withdrawal fee as prescribed by TSD will be incurred. Moreover, since the withdrawal of trust units deposited in the Issuer Account, member no. 600, would take some time to complete, the subscribers who deposit the trust units in such account might not be able to withdraw their trust units as soon as the security is available for trading in the SET. 26. Calculation and Announcement of Net Asset Value (NAV) of the REIT The REIT Manager is responsible for the preparation and submission of the report of the REIT s net asset value as of the last working day of each quarter which is verified by the Trustee to the SEC within 45 days from the end of last date of each quarter. In addition, the REIT Manager shall conduct and submit the said report of the REIT s net asset value as of the last working day of each quarter for the verification of the Trustee within 45 days from the date of the last day of each month. However, if the last business day of any month is the last day of a quarter, the REIT Manager shall prepare and submit such report of the net asset value to the Trustee within 30 days from the last business day of the said month in order for the Trustee to review at least 15 days before the date that the REIT Manager shall submit such report of the net asset value as approved by the Trustee to the Office of SEC. The criterias for the calculation of asset value of the REIT are as follows: (1) A calculation of the value of the assets of REIT s investment shall be in accordance with the method of value assessment of the assets as specified in Trust Deed except a calculation of the value of immovable properties that the REIT has directly or indirectly invested in during the period between the date of investment in such immovable properties and the date of verification of value assessment of such immovable properties. In such case, a calculation shall be based on the purchase price of such immovable properties. (2) Decimal numbers shall be used as follows: a. Calculating the total value of the assets and using the result of 2 (two) decimal digits and rounding up or rounding down as per the universal mathematical principles; and b. Calculating the value of units in 5 (five) decimal digits and rounding up or rounding down as per the universal mathematical principles but using the result of 4 (four) decimal digits and disregarding the 5 th decimal digit. In the event that there is a fractional part resulting from rounding up or rounding down as per Paragraph 1, such fractional part shall be used to calculate as part of the property of REIT. Additional Conditions: For the method of calculation of the net asset value and the value of trust units, the REIT Manager shall proceed in accordance with the above No. 26 except in the event that the Securities and Exchange Page 27

28 Committee and/or any other authorities amend, modify, add, announce, specify, order, approve and/or respite otherwise. In such case, the REIT Manager shall proceed accordingly. In this regard, a calculation of the value of the property, the net asset value, and the value of trust units announced by the REIT Manager is a calculation that uses the latest report of assessment or the latest report of verification as a basis to specify the value of main property (immovable property) of the REIT. The said value may not be marketable value of the said main property (immovable property). 27. Rules and Procedures in Case of Incorrect Unit Price The REIT Manager shall promptly disclose the incidents and the changes as well as submit such revision through SET information disclosure system. 28. Right of Trust Unitholders Rights and responsibilities of the trust unitholders shall be in accordance with the provisions under the Trust Deed which can be summarized as follows: 1. Being a trust unitholder shall not constitute to juristic relation in form of principal and agent between the trust unitholder and the Trustee and shall not constitute to juristic relation either in form of partnership or any other types of relation, neither between the Trustee and trust unitholders nor among the trust unitholders themselves. 2. Being a trust unitholder shall not constitute to the liabilities of such trust unitholder in case that the assets of the REIT are insufficient to pay the REIT s obligations to the Trustee, the REIT Manager, or the REIT s creditors. The Trustee, the REIT Manager and the REIT s creditors are allowed to settle debts from the REIT s assets only. 3. The trust unitholders shall have the rights to claim the REIT for the dividend distribution not exceeding the profit calculated after deduction of the reserves allowed by laws including unrealized gain from the REIT s valuation and examination of such valuation and other adjusted entry according to the guidelines of the Office of SEC in order to be complied with cash position of the REIT, lists of reserves for loans or loan obligations of the REIT in respect to the limitation specified in the filing and the prospectus or the annual information disclosure. Also, the trust unitholders shall have the rights to claim for the repayment of capital in the amount of not exceeding to the REIT s capital adjusted by the premiums or the discount of the unit value. 4. In any cases, the interpretation of the Trust Deed shall not be conflicted or contrary to the provision according to (1), (2) and (3). 5. Being the trust unitholders shall not constitute to the ownership and the absolute right to claim over the assets of the REIT, in any part, and the trust unitholders have no right to claim for the transfer of the REIT s assets to the trust unitholders. However, the trust unitholders have the rights to claim for the REIT s assets from the outsiders in case of the Trustee or the REIT Manager s non-compliance of Page 28

29 its fiduciary duty specified under the Trust Deed of Trust Act and such actions constitute to the distribution of REIT s assets to the outsiders which subject to the provision specified by Trust Act. 6. The trust unitholders shall not be liable to the REIT Manager or the Trustee for any other additional payment to the REIT after the payment of unit trusts has been fully made, also the trust unitholders have no other additional liabilities for such unit trusts held. 7. The trust unitholders have the right to vote in the trust unitholders meeting as well as the right to question, inquire and give their opinions in regard of the management of REIT conducted by the Trustee and the REIT Manager whether it is complied with the related regulations and the Trust Deed or not. However, the trust unitholders have no rights to interfere with day-to-day operations of the Trustee and the REIT Manager that are not in conflict or contrast to the Trust Deed. Such operations shall be deemed to be under the Trustee and the REIT Manager s authority and discretion (as the case may be). 8. Each trust unitholder has his right to vote for the amendment of the Trust Deed or the modification of the management according to the conditions and criteria specified in the Trust Deed. 9. Each of trust unitholders is entitled to cast a vote to pass a resolution to amend the Trust Deed or to change management methods in accordance with the conditions and manner specified in the Trust Deed. The Trustee or the REIT Manager shall amend the Trust Deed or change management methods upon a resolution passed in accordance with the methods and manner specified in the Trust Deed. 10. The trust unitholders have the right to obtain the capital repayment upon fund dissolution or capital decrease. In this regard, the trust unitholders shall be repaid upon the remaining of the REIT s assets after the deduction of expenses and the REIT s debts only. In case of the paid-up capital decrease, the REIT Manager shall make distribution on a pro-rata basis to the trust unitholders by applying the regulations, procedures and other related notifications as prescribed by the Office of SEC. 11. Trust unitholders are entitled to transfer units; provided that such transfer is in accordance with the conditions and methods specified in the Trust Deed. 12. Other benefits, namely, trust unitholders are entitled to pledge units under the law and as per the rules and methods specified by Trustee and/or Trust Unit Registrar, to cast a vote passing a resolution concerning the management of the REIT in accordance with the conditions and regulations as prescribed in the Trust Deed and shall not breach against the law and notifications, regulations and orders as prescribed by Securities and Exchange Commission (SEC) or the Office of SEC and shall not be additional burden to Trustee, Settlor and REIT Manager more than prescribed by law to receive a refund upon capital decrease. Page 29

30 29. Channel for the Trust Unitholders to Access the Copy of Trust Deed The trust unitholders can request to access the copy of Trust Deed from the REIT Manager and the Trustee during the operating time of the REIT Manager and the Trustee. 30. REIT Manager Company Name One Asset Management Limited Incorporation Date 19 March 1992 RegisteredCapital THB 105,000,000 The Approval of the Office of SEC The REIT Manager has been approved by the Office of SEC to act as the REIT manager for the Real Estate Investment Trust, date of approval as on 29 August List of REIT Manager s Directors and Management No. Name-Surname Title/ Position 1. Mr. Foong Hock Meng Chairman of the Board of Director 2. Mr. Chih-Hung Lin Director 3. Mrs. Nantarat Surakkhaka Director 4. Mrs. Ching Li Director 5. Mr. Wong Sai Hung Director 6. Mr. Pote Harinasuta Chief Executive Officer /Director 7. Mr. Sakda Manavapat Chief Operating Officer / Director 8. Mr. Monthol Junchaya Chief Investment Officer 9. Mr. Alongkorn Prathanrasnikorn Senior Executive Vice President List of Shareholder of REIT Manager s Company as of 12 May 2017 No. Name Shareholding (Shares) Percentage (%) 1 KGI Securities (Thailand) Public Company Limited 10,406, Mr. Wong Sai Hung 25, Miss Chanphen Choowonges 11, Miss Umaporn Paevorakhun 9, Miss Porn-uma Dhevahudee 9, Miss Auranuch Aswaprecha 6, Page 30

31 7 Miss Benjamartt Suriyadet 6, Mr. Winyoo Siriwiriyanon 4, Mr. Sittiporn Kasemsong 3, Miss Sakara Chatsuthipan 3, Total 10,486, Organization Chart of REIT Manager REIT Manger Remuneration Throughout the term of the REIT Manager Agreement, the REIT Manager shall be paid for the REIT management fee basis of not exceeding 1.00 percent of the total asset value (TAV) of the REIT per annum as specified in the Prospectus Part 2, Article 10, Fees and Disbursement of REIT. Page 31