The Edge Singapore has written extensively on fees and the external manager model and S-REITs sidestepping higher labour costs looks like a plus during inflationary phases.
For most corporates, labour is a large cost - in some cases the largest cost. This is the big advantage of the S-REIT’s external manager model. REITs are passive vehicles holding property to pass through rental income after utility and interest expenses.
If a REIT manager needs more property management fees or manager’s management fees, it has to ask for unitholder permission in an EGM which in turn requires an opinion by the indepdent financial adviser. The proxy advisors may also chip in at some point.
