Governance Structure|Features|Nippon Prologis REIT, Inc.

Nippon Prologis REIT, Inc.

Governance Structure

  • Unit holder interests will be aligned with the interests of the sponsor through a same-boat investment by the Prologis Group, as well as asset management fees linked to NOI and net income
  • Conflicts of interest will be minimized through a clear approval process for related-party transactions

Measures to align interests and minimize conflict of interest

NPR and our sponsor, the Prologis Group, have adopted a governance structure that aims to minimize conflicts of interest and enable sound mutual growth, through means such as a same-boat investment from the Prologis Group, asset management fees that are linked to NOI and net income, and a clear approval process for related party transactions.

Investment by Prologis Group (Same-Boat Investment)

Prologis Group is holding approximately 15% of our units.

Under the sponsor support agreement, in the event of any new issuance of our investment units:

  1. At our request, Prologis, Inc. intends to consider in good faith the purchase of a portion of such units either directly or through the Prologis Group entities
  2. To the extent the Prologis Group holds any of our investment units, Prologis, Inc. intends to hold or have the Prologis Group entities hold such units in the long-term

Asset Management fee linked to NOI and Net Income

Under the asset management agreement, a portion of the asset management fees payable to the Asset Manager will be linked to the NOI and net income of each relevant fiscal period.

Management Fees
Type 1 management fee Type 2 management fee
NOI × 7.5% (maximum %) Net income (Note 1) × 6% (maximum %)
Acquisition and Disposition Fees
Acquisition Fees Disposition Fees
Purchase price × 1.0% (maximum %)
(Up to an amount equal to 0.5% in the case of a related-party transaction)
Disposition price × 0.5% (maximum %)
(Up to an amount equal to 0.25% in the case of a related-party transaction)
The Asset Manager does not receive any disposition fee
for any disposition of properties that incurs a loss.
  • Net Income is before the deduction of the Type 2 management fee and consumption and local taxes

Approval process for related-party transactions

In the event of transactions with related parties approvals of NPR's board of directors, approvals of the Compliance Committee and deliberation and resolutions of the Investment Committee are required.

Approval process for related-party transactions

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