[Table of Contents and Introduction / Salient Points; Rules 1-3; Rule 4; Rule 5; Rule 6; Rule 7; Rule 8; Rule 9; Rules 10-11]

---

Rule 9 – Property Valuer 

SEC. 1. Appointment of an Independent Property Valuer. A REIT shall appoint a duly accredited independent Property Valuer to prepare a full valuation of a REIT’s assets at least once a year in accordance with the applicable rules of asset valuation and valuation methodology prescribed by the Commission. 

A property valuer shall not be considered independent if – 

• i. it is the subsidiary or holding company of: 

• ii. the REIT; 

• iii. the Property Manager; 

• iii. the Fund Manager; 

• iv. any of the Principal Stockholders of the REIT; or 

• v. the holding company, Subsidiary or Affiliate of the Property Manager, the Fund Manager, or any of the Principal Shareholders of the REIT; or 

b. any of its partners, directors or Principal Officers is an officer, director or an associate of: 

• i. the REIT;

• ii. the Property Manager; 

• iii. the Fund Manager; 

• iv. any of the Principal Shareholders of the REIT; or 

• v. the holding company, Subsidiary or Affiliate of the Property Manager, the Fund Manager or any of its Principal Shareholders; or 

c. any of its directors or Principal Officers holds or controls ten percent (10%) or more of the beneficial interest in, or the right to vote in the governing bodies of any of the entities in b(i), b(ii), b (iii) or b(iv); or 

d. in case where the REIT intends to acquire or dispose of a property (the “subject property”), the Property Valuer or its associate: 

• i. is engaged, whether as principal or agent, by the REIT’s counterparty subject property, in relation to the introduction or referral of the REIT to the subject property or vice versa; 

• ii. is engaged whether as principal or agent by the REIT in relation to the acquisition of the subject property; 

• iii. acts as a broker for the property transaction for a fee; or 

• iv. had, at any time during the one (1) year immediately before the date of the agreement for such intended purchase or disposal, been engaged to provide valuation of the subject property to the REIT’s counterparty (or its Related Parties). 

1.1 The Property Valuer shall ensure that its opinion and valuation is independent of and unaffected by its business or commercial relationship with other persons. 

1.2 The directors and Principal Officers of the Property Valuer shall comply with the Fit and Proper Rule as described under these Rules. 

SEC. 2. Qualifications Required of a Property Valuer. 

a. The appraisal company shall be registered with the Commission; 

b. The certifying officer of the appraisal company shall be a professional appraiser duly licensed by the DTI or the Professional Regulatory Board of Real Estate Service pursuant to R.A. 9646 and an officer/member of good standing of any registered association of appraisal companies; 

c. At the time of application, the company shall have a minimum experience of five (5) years in the appraisal business; 

d. It shall have rendered professional services for at least one (1) commercial bank and two (2) public companies; 

e. The appraisal company or any of its directors/officers shall have no adverse judgment on any administrative, civil or criminal case involving its appraisal business; 

f. It shall be solvent and in sound financial condition. 

The foregoing qualifications shall be supported by appropriate documents. 

SEC. 3. General Obligations of a Property Valuer. 

3.1 The Property Valuer shall value all the real estate of the REIT, on the basis of a full valuation with physical inspection in respect of the site of the real estate and an inspection of the building(s) and facilities erected thereon once a year, and in any event for the purposes of issuance of new Investor Securities. The Property Valuer shall also produce a valuation report on real estate to be acquired or sold by the REIT or where new shares are offered by the REIT or in any other circumstances required by the Commission. The contents of the valuation report shall comply with these Rules. 

SEC. 4. Criteria for Acceptability of the Property Valuer. 

4.1 The Property Valuer shall be a company that: 

• a. provides property valuation services on a regular basis; 

• b. carries on the business of valuing real estate in the Philippines; 

• c. possesses the requisite licenses required under relevant Philippine rules and regulations; 

• d. is accredited by the Commission; 

• e. has key personnel who possess the requisite licenses and are qualified to perform property valuations; 

• f. has sufficient financial resources at its disposal to enable it to conduct its business effectively and meet its liabilities; 

• g. has robust internal controls and checks and balances to ensure the integrity of valuation reports and that these reports are properly and professionally prepared in accordance with international best practices; 

• h. has adequate professional insurance to cover its usual risks; and 

• i. complies with the Fit and Proper Rule under these Rules. 

SEC. 5. Valuation Report 

5.1 The Property Valuer shall produce a valuation report which shall include, as a minimum: 

a. all material details in relation to the basis of valuation and the assumptions used; 

b. description and explanation of the valuation methodologies adopted; 

c. overall structure and condition of the relevant market including an analysis of the supply/demand situation, the market trend and investment activities; 

d. the particulars in respect of each property, such as: 

• i. an address sufficient to identify the property, which shall generally include postal address, lot number and such further designation as is registered with the appropriate government authorities; 

• ii. freehold or leasehold, and the remainder of the term if it is a leasehold); 

• iii. the existing use (e.g. shops, offices, factories, residential, etc.); 

• iv. a brief description of the property, such as the age of the building, the site area, gross floor area, net lettable floor area, and the current zoning use; 

• v. the options or rights of pre-emption and other encumbrances concerning or affecting the property; 

• vi. the occupancy rate; 

• vii. lease cycle duration; 

• viii. lease expiry profile; 

• ix. a summary of terms of any sub-lease or tenancies, including repair obligation, granted to the tenants of the property; 

• x. the capital value in existing state at the date the valuation was performed; 

• xi. the existing monthly rental before profits tax if the property is wholly or partly let together with the amount and a description of any outgoings or disbursements from the rent, and, if materially different, the estimated current monthly market rental obtainable, on the basis that the property was available to let on the effective date as at which the property was valued; 

• xii. the estimated current net yield; 

• xiii. a summary of any rent review provisions, where material; 

• xiv. the amount of vacant space, where material; 

• xv. material information regarding the title of the subject property as contained in the relevant opinion, and a discussion as to whether any and how the legal opinions have been taken into consideration in the valuation of the relevant property; and 

• xvi. any other matters which may affect the property or its value. 

e. particulars [as set out in (c)] of any real estate for which the REIT has an option to purchase; 

f. a letter stating the independent status of the Property Valuer and that the valuation report is prepared on a fair and unbiased basis; 

g. an explanation of the rationale for choosing the particular valuation method, if more than one method is adopted.

5.2 Whenever a valuation report is prepared for the REIT, the date of the valuation report shall be: 

a. the date the REIT is valued, if such report is prepared for the purpose of calculating the Net Asset Value of the REIT; or 

b. the date which is not more than three (3) months before the date on which: (i) an offering document is issued; or (ii) a sale and purchase agreement (or other agreement to transfer legal title) is signed, if the transaction does not require shareholders’ approval. 

SEC. 6. Termination of the Services of a Property Valuer. 

6.1 The services of the Property Valuer shall be terminated after it has conducted valuations of the real estate of the REIT for three (3) consecutive years. Subject to a curing period of three (3) years, the REIT may, however, re-engage the services of said property valuer. 

The Property Valuer shall be subject to removal by notice in writing from the REIT in any of the following events: 

• a. the Property Valuer goes into liquidation, becomes bankrupt or has a receiver appointed over its assets; 

• b. for good and sufficient reason, the Fund Manager states in writing that a change in the Property Valuer is desirable in the interests of the REIT shareholders; or 

• c. the Property Valuer violates these Rules or any other relevant law, rule or regulation. 

6.3 In addition, the services of the Property Valuer shall be terminated in all other cases provided for in the Constitutive Documents. 

6.4 Upon the termination or dismissal of the Property Valuer, the REIT shall appoint a new Property Valuer that meets the qualification requirements under these Rules. 

[Table of Contents; Rules 1-3; Rule 4; Rule 5; Rule 6; Rule 7; Rule 8; Rule 9; Rules 10-11]