STATUTORY INSTRUMENTS

SUPPLEMENT No. 19 23rd June, 2017

STATUTORY INSTRUMENTS SUPPLEMENT
to The Uganda Gazette No. 36, Volume CX, dated 23rd June, 2017
Printed by UPPC, Entebbe, by Order of the Government.

S T A T U T O R Y I N S T R U M E N T S

2017 No. 41.

THE COLLECTIVE INVESTMENT SCHEMES (REAL ESTATE
INVESTMENT TRUSTS) REGULATIONS, 2017

ARRANGEMENT OF REGULATIONS
Regulation
PART I—PRELIMINARY
1. Title
2. Application
3. Interpretation
PART II—ESTABLISHMENT OF A
REAL ESTATE INVESTMENT TRUST SCHEME
4. Scheme to comply with these Regulations
5. Requirement for prior consent
6. Structure of a real estate investment trust
7. Term of the trust
8. Assets of the scheme
9. Types of real estate investment trust schemes
10. Status of the fund and redemption of units.
11. Objectives of D-REIT
12. Objectives of I-REIT
13. Restriction on provision of loans or mortgages by REITS
14. Reference to D-REIT and I-REIT to include a reference to the trustee

PART III—AUTHORISATION OF REAL ESTATE INVESTMENT TRUST SCHEMES

15. Restriction on offer and promotion.

16. Prohibited activities before an authorisation
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Regulation
17. Application for authorisation
18. Documents required upon application
19. Authorisation orders
20. Liability of the trustee, REIT manager or auditor
21. Revocation of authorisation
22. Winding up of a real estate investment trust scheme
23. Termination of a real estate trust scheme by the promoter, trustee or
REIT Manager
24. Power of the court in winding up of a real estate investment trust
scheme
25. Restriction on the issue or offer of REIT securities
26. Obligations of a promoter in an initial offer or issue of REITs
securities
27. Obligations of a REIT manager in a subsequent offer or issue of
REITs securities
PART IV—OFFERS IN RESPECT OF A D-REIT
28. Offers in respect of a D-REIT
29. Listing of D-REIT securities
PART V—OFFERS IN RESPECT OF AN I-REIT
30. Offers in respect of an I-REIT
31. Listing of securities of an I-REIT

PART VI—PROVISIONS APPLYING TO OFFERS OF

BOTH D-REITS AND I-REITS

32. Exception to limitations on transfers in case of a restricted issue or

offer
33. Appointment of a transaction adviser
34. Appointment of a registrar
35. Publication of a Prospectus or an Information Memorandum
36. Expert statement
37. Disclosure of financial structuring
38. Approval of Prospectus or Information Memorandum
39. Liability for a defective Prospectus or an Information Memorandum
40. Remedy for unfair prejudice or conduct of a scheme
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Regulation
41. Compensation for false or misleading Prospectus or Information
Memorandum
42. Obligation to conduct due diligence
43. Continuing disclosure obligations of trustee and REIT manager
PART VII—APPOINTMENT, REMOVAL AND
OBLIGATIONS OF A TRUSTEE
44. Trustee to be licenced by the Authority
45. Eligibility for appointment as a trustee
46. Powers, obligations and duties of a trustee and any secondary
disposition trustee
47. Instructions from a REIT manager
48. Change of address of the trustee
49. Liability of a trustee
50. Exemption from taking action in respect of REIT assets
51. Register of REIT securities holders
52. Voluntary resignation of a trustee
53. Removal and replacement of a trustee
54. Notification of contraventions
PART VIII—APPOINTMENT, REMOVAL AND
OBLIGATIONS OF A REIT MANAGER
55. Appointment of a REIT manager
56. Eligibility for appointment
57. Duties of a REIT manager
58. Connected party transactions
59. Change of address
60. Trustee requests to a REIT manager
61. Removal and replacement of a REIT manager
PART IX—SPECIFIC REQUIREMENTS FOR I-REITS
62. Investments and objectives of an I-REIT
63. Investments in real estate related securities
64. Investment in foreign real estates or markets
65. Eligible investments for an I-REIT and income requirements
66. Consequences of failure to invest in real estate within one hundred
and eighty days

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Regulation
67. Acquisition and disposal of real estate and price
68. Investments in single purpose companies
69. Partial ownership of properties
70. I-REIT income requirement
71. Real estate construction and development activities by an I-REIT
72. Maximum level of borrowing by an I-REIT
73. Distribution requirements of an I-REIT
74. Distribution of realized capital gains by an I-REIT
75. Minimum retained investment by the promoter and lock-in period
PART X—SPECIFIC REQUIREMENTS FOR D-REITS
76. Investments and objectives of a D-REIT
77. Eligible investments for a D-REIT
78. Consequences of failure to invest in real estate within one hundred
and eighty days
79. Acquisition and disposal of a real estate and price
80. Partial ownership of real estate
81. Construction and development activities by a D-REIT
82. Maximum levels of borrowings by a D-REIT
83. Distribution requirements of a D- REIT
84. Distribution of realized capital gains by a D- REIT
85. Minimum retained investment by the promoter and lock-in period
PART XI—CONVERSIONS OF REITS
86. Requirements for conversion from a D-REIT to an I-REIT
PART XII—ADVERTISING
87. Advertising
88. Inclusion of performance data
PART XIII—ALTERATION OF SCHEME DOCUMENTS
89. Alterations to REITs documentation
PART XIV—FEES AND TERMS OF THE TRUSTEE THE
REIT MANAGER AND OTHER PARTIES

90. Remuneration of the trustee

91. Remuneration of a REIT manager
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Regulation
92. Deferment of fees payable to a REIT manager
93. Basis for remuneration of trustee and REIT manager
94. Term of the REIT manager of an I-REIT and prohibition on penalties
95. Recoverable expenses
PART XV—MAINTENANCE OF BOOKS, ACCOUNTS AND RECORDS
96. Maintenance of books, accounts and records
PART XVI—APPOINTMENT AND REMOVAL OF
AN AUDITOR AND AUDIT OF ACCOUNTS

97. Appointment of an auditor and audit of accounts

98. Removal of an auditor
99. Notification to the Authority
100. Co-operation with the auditor
PART XVII—PREPARATION OF PERIODIC REPORTS AND ACCOUNTS
BY THE REIT MANAGER AND TRUSTEE
101. Preparation of semi-annual and annual reports
102. Failure to prepare reports
103. Submission of reports to the Authority and REIT securities holders
104. Distribution recommendations and statements
PART XVIII—NOTIFICATIONS AND REPORTING TO THE AUTHORITY
105. Notification and compliance report by the trustee
106. Notification and compliance report by the REIT Manager
107. Notification and compliance report by the auditor
108. Availability of reports
PART XIX—ACQUISITION AND DISPOSAL OF ASSETS

109. Acquisition from promoter and connected parties

110. Additional acquisitions

PART XX—APPOINTMENT OF A VALUER AND VALUATION OF ASSETS

111. Appointment of a valuer

112. Obligations of a valuer
113. Basis for valuation and conduct of valuation
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Regulation

114. Fees and remuneration of a valuer

115. Removal of a valuer
116. Retirement of a valuer
117. Power of the Authority to require a valuation
PART XXI—CONNECTED PARTY TRANSACTIONS
118. Connected party transactions

Part XXII—Documents to be Available for Inspection

by Reit Securities Holders

119. Documents to be availed for inspection

PART XXIII—ISSUE OF ADDITIONAL REIT SECURITIES

120. Issue of additional REIT securities

PART XXIV—MEETINGS OF REIT SECURITIES HOLDERS

121. Meetings of REIT securities holders

PART XXV—LICENSING OF TRUSTEE AND REIT MANAGER

122. Application for a licence by a trustee and a REIT Manager

123. Specific requirements for licensing as a trustee and a REIT
manager
124. Financial requirements for a trustee and REIT manager
125. Records to be maintained by trustee and REIT manager
126. Conduct of REIT manager and trustee
127. Reporting by REIT manager and trustee
128. Application of the Collective Investment Schemes (Licensing )
Regulations, 2003
PART XXVI—MISCELLANEOUS PROVISIONS

129. Application of the Capital Markets (Prospectus Requirements)

Regulations, SI 84-2
130. Fees
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SCHEDULES
SCHEDULE 1- CURRENCY POINT
SCHEDULE 2- CONTENTS OF TRUST DEED
SCHEDULE 3- FORMS
SCHEDULE 4 - VALUATIONS
SCHEDULE 5- MEETING OF HOLDERS OF REIT SECURITIES
SCHEDULE 6- FEES

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 S T A T U T O R Y I N S T R U M E N T S

2017 No. 41.

The Collective Investment Schemes (Real Estate Investment
Trusts) Regulations, 2017.
(Under sections 30, 31 and 84 of the Collective Investment Schemes Act,
2003, Act No. 4 of 2003)

IN EXERCISE of the powers conferred upon the Capital Markets Authority

by sections 30, 31 and 84 of the Collective Investment Schemes Act,
2003, Act No. 4 of 2003, these Regulations are made this 19th day of
December, 2016.
PART I—PRELIMINARY
1. Title.
These Regulations may be cited as the Collective Investment Schemes
(Real Estate Investment Trusts) Regulations, 2017.

2. Application.
(1) These Regulations apply to Real Estate Investment Trusts
constituted and approved in Uganda under the Act and these
Regulations.
(2) These Regulations apply to only Closed Ended Real Estate
Investment Funds.

3. Interpretation.
In these Regulations, unless the context otherwise requires—
“Act” means the Collective Investment Schemes Act, 2003;
“associate” or “associated person” in relation to any person who is
a director of the company, means that person’s wife, husband
or child or anybody corporate of which that person is a
director, any person who is an employee or partner of that
person and, if that person is a body corporate, any subsidiary
of that body corporate and any employee of such a subsidiary;
8
“Authority” means the Capital Markets Authority established under
section 4 of the Capital Markets Authority Act, Cap 84;

“closed ended fund” means a fund or trust where—

(a) a person invests by subscribing for an issue of REIT
securities or by acquiring REIT securities in a secondary
market;
(b) the value of the investment fluctuates over time as
determined by market price for the REIT securities;
(c) the number of the REIT securities issued remains
constant over time except where a new issue of REIT
securities is made or there is a reduction in the capital of
the fund initiated by the trustee or as a consequence of
termination or winding up of the trust; and

(d) the REIT securities holder except where there is a

reduction in the capital of the fund initiated by the trustee
or as a consequence of termination or winding up of the
trust—

(i) is not entitled to require the trustee to redeem the

REIT securities; and
(ii) may only exit the investment in the REIT securities
by selling the units in a secondary market;
“compliance officer” means a person designated as such by the
market intermediary;

“connected person” or “connected party” in relation to a real estate

investment trust scheme includes—
(a) the REIT manager;

(b) a valuer appointed to undertake a valuation of the

scheme;
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 (c) the trustee;
(d) a substantial holder of REIT securities in the scheme;
(e) a director, a senior executive or an officer of any person
referred to in (a), (b) or (c);
(f) an associate of any person referred to in (d) and (e);
(g) a controlling entity, a holding company, a subsidiary or an
associated company of any person referred to in (a) to
(d);
“co-tenancy” means the ownership of land by two or more persons
in undivided shares and includes joint tenancy or tenancy in
common;
“currency point” has the meaning assigned to it in Schedule I;
“Development and construction Real Estate Investment Trust” or
“D-REIT scheme” means a real estate investment trust scheme
authorised as such a scheme by the Authority;
“eligible investments” means the assets and other investments
specified under regulation 65 in respect of an I-REIT and
regulation 77 in respect of a D-REIT in which the trustee may
invest;
“eligible real estate” means in respect to real estate situate in
Uganda or outside Uganda;

“exempted real estate investment trust” means-—

(a) a collective investment scheme authorised by the

Authority other than a real estate investment trust
scheme;
(b) a scheme that is prescribed by the Authority not to be a
real estate investment trust scheme; or
(c) a trust, scheme, syndicate or arrangement which—
10
 (i) does not involve an issue or offer to the public or a
section of the public which complies with the
conditions for a private offer as prescribed by the
Authority and in respect of which the issuer has not
elected to seek authorisation under these
Regulations as a real estate investment trust scheme;

(ii) is limited to members of a family group;

(iii) is a charitable trust; or

(iv) is established as a consequence of a disposition

under a will or other testamentary instrument;

(d) for the avoidance of doubt, “exempted real estate

investment trust” does not include—

(i) a statutory fund maintained under any law for the

regulation of insurance in Uganda;

(ii) any pension or retirement fund established under or

regulated by the laws of Uganda;
(iii) an arrangement regulated in Uganda by the law of
partnership; or
(iv) a scheme which is operated as a co-operative and
regulated under the laws of Uganda;

“free float” means REIT securities issued, offered or held by

persons who are not connected persons or associated persons
with the promoter or the REIT manager;

“fund” means a real estate investment trust fund or REIT fund;

“high net worth persons” means a person who either alone or with
any associates on a joint account, subscribes for REITS
securities with an issue price equal to at least seven thousand
five hundred currency points;

11
“information Memorandum” means any notice, circular, material or
advertisement, publication or other invitation issuing or
information for subscription, sale or purchase of any REIT
security to a professional investor and includes a conversion
information Memorandum or supplemental information
Memorandum;

“IFRS” means the International Financial Reporting Standards

issued from time to time by the International Accounting
Standards Board as adopted in Uganda;

“income real estate investment trust” or “I-REIT” means a real

estate investment trust that complies with the requirements of
these Regulations and the terms;
“income real estate investment trust scheme” or I-REIT scheme”
means a real estate investment trust scheme authorised as such
by the Authority;
“independent auditor” means a person who—

(a) is qualified and registered as an auditor by the Institute of

Certified Public Accountants of Uganda;

(b) holds a valid practicing certificate;

(c) is not an auditor of the trustee, promoter or the REIT

manager;

(d) is not a director, officer, employee, shareholder or a

partner of a person specified in subparagraph (c); and

(e) is otherwise qualified for appointment as an auditor of a

REIT;

“initial offer” means the first offer or issue of REIT securities made
to persons other than the promoter, connected persons to the
promoter or the REIT manager;
12
“investor” means a holder of REIT securities who is a beneficiary
under the trust deed;
“initial public offer” or “IPO” in relation to REIT securities means
the first unrestricted public issue of I-REIT securities which
are to be listed on an approved securities exchange;
“investee company” means a company which meets the
requirements of regulation 65 in respect of an I-REIT and
regulation 77 in respect of a D-REIT;
“investee trust” means a trust which meets the requirements of
regulation 65 in respect of an I-REIT and regulation 77 in
respect of a D-REIT;
“issuer” means—

(a) for the first issue of REIT securities made after the
authorisation of the real estate investment trust scheme,
the promoter;
(b) for any subsequent issue or offer of REIT securities or in
the case of a conversion as provided for under regulation
86, the REIT manager at the time of issue,
but does not include a trustee;

“leasehold” includes sub-leasehold;

“listed” in relation to REIT securities, means REIT securities which
are traded on an approved securities exchange in Uganda or
any other exchange as may be approved by the Authority;

“lock in period” means a period in which the promoter is required

to retain an investment in REIT securities;

“management expense ratio” or “MER” means the ratio of the sum

of fees and recoverable expenses of the real estate investment
to the average value of the fund calculated on a daily basis
where—
13
 (a) fees equals all outgoing fees deducted or deductible
directly from the fund in respect of the period covered by
the management expense ratio, expressed as a fixed
amount, calculated on a daily basis and includes any
management fee, the annual trustee fee and any other fees
deducted or deductible directly from the fund;
(b) recoverable expenses equal all expenses recovered from
or charged to the fund as a result of the expenses incurred
by the operation of the fund expressed as a fixed amount
but should not include expenses that would otherwise
have been incurred by an individual investor, for example
taxes; and
(c) average value of the REIT securities equals the net asset
value of the trust, including net income value, less
expenses on an accrued basis, for the period covered by
the management expense ratio, calculated on a daily
basis;
“net asset value” or “NAV” means the value of all assets of the fund
less the value of all liabilities of the Fund, including trustee
and management fees, as at the day the calculation is made;
“net asset value per unit” or “NAV per unit” means the NAV
divided by the number of units of REIT securities issued and
not redeemed on the day the calculation is made;
“offeror” means a person who makes an offer of REIT securities
and shall include the issuer where the issuer makes the offer or
requests or authorises another person to make the offer but
does not include the trustee;

“partial ownership” when used in connection with or in respect of

land or real estate includes, any title or ownership or right or
purported right to occupy or use land or use real estate which
is in the form of a co-tenancy or where the ownership is in a
partnership, a co-operative, or other form of co-ownership
whether formal or informal including by way of ownership of
14
 a share in a company that is not wholly owned and controlled
or of a unit in a trust that is not wholly owned or pursuant to a
licence or easement or other form of joint or co-ownership but
does not include—
(a) ownership of shares in a common REIT where the share
is held as a consequence of the holding of a freehold or
leasehold title;

(b) a right in respect of common property arising out of a

leasehold held under the Land Act;

(c) a right under a lease, or licence of easement that arises as

a consequence of the holding of freehold or leasehold
title or which is established for the benefit of that
freehold or leasehold title or relates to plant and
equipment or the use of a utility or infrastructure or
natural resource for use in connection with the freehold
or leasehold title; or

(d) ownership where the assets are held jointly in the name of
the trustee and a secondary disposition trustee;

“professional investor” means a person whose ordinary business or

regular activity involves the buying and selling of securities as
a principal and includes an underwriter, a financial institution,
an insurance company, high net worth persons, a fund
manager, a broker, a broker’s representative, a dealer, a
dealer’s representative, an investment adviser or investment
adviser’s representative acting as principal subject to any
exception that may be prescribed by the Authority;

“promoter” means a person who—

(a) acts as a promoter; or
(b) is nominated in the application for authorisation, to act as
a promoter,
15
 of a real estate investment trust or a real estate investment trust
scheme but does not include an underwriter of an issue or offer
of REIT securities who is paid a commission without
otherwise taking part in the formation, establishment or
organisation of the real estate investment trust or scheme;

“property manager” means a person appointed as such under

regulation 55;

“project manager certifier” means a person appointed as such under

part 8 of Form 3 set out in Schedule 3;

“Prospectus” means any notice, circular, material or advertisement,

publication or other invitation issuing or Information for
subscription, sale or purchase of any REIT security which is
capable of being accepted by any person who is not a
professional investor and includes a supplemental Prospectus
or a conversion Prospectus;

“real estate” means land and includes—

(a) all things which are a natural part of the land or growing
on the land;
(b) attachments above and below the land;

(c) things which are fixtures or are developed, installed or

constructed on the land including buildings and site
improvements;
(d) improvements and permanent building, plant and
equipment or attachments such as plumbing, heating and
cooling systems, electrical wiring and built-in items such
as elevators, and items of a similar nature which might be
used in connection with the land; and

(e) all rights and interests attaching to the land;

“REIT” means a real estate investment trust;

16
“real estate investment trust” means an arrangement in respect of
real estate or interest in real estate of any description,
structured in accordance with the rules prescribed by the
Authority to enable a person taking part in the arrangement,
whether by becoming an owner of the property or any part of
it or otherwise to participate in or receive profits or income
arising from the acquisition, holding management or disposal
of the real estate or interest in the real estate or sums paid out
of such profits or income;

“real estate investment trust assets” or “REIT assets” or “scheme

assets” includes all assets of the REIT fund;

“real estate investment trust fund” or “REIT fund” means all

contributions of money or money’s worth or other income or
assets of the real estate investment trust from time to time
including money borrowed or raised by the trustee for the
purposes of the scheme and includes all amounts due and any
rights of a manager or of a trustee to commence or pursue
actions against any person and the rights of the beneficiaries of
the trust to commence or pursue actions against any party
including a trustee;

“real estate investment trust scheme” or “REIT scheme” means an

arrangement made or established for the purposes of collective
investment by persons in real estate for the purpose of earning
profits or income from real estate as beneficiaries of a trust
which is divided into units where—
(a) a person contributes money or money’s worth as
consideration to acquire rights or interests to gain the
benefits from pooling of funds and the investment in real
estate;

(b) the person investing does not have the day to day control
over the management of the assets of the real estate
investment trust;
17
 (c) the assets are managed by an entity; or
(d) the assets are otherwise prescribed by the Authority to be
a real estate investment trust scheme;
and includes a real estate investment trust but does not include
an exempted real estate investment trust;
“register” means the register of REIT securities holders maintained
by the trustee under regulation 51;
“REIT manager” means a company incorporated or registered in
Uganda and licenced by the Authority to provide real estate
management services in respect of a REIT;
“REIT securities’’ means units in a trust which is a real estate
investment trust or a real estate investment trust scheme;
“restricted offer” means an issue or an offer made only to
professional investors;
“scheme” means a real estate investment trust scheme;
“scheme documents” include—
(a) the Prospectus and information Memorandum and any
conversion or supplementary Prospectus or information
Memorandum;
(b) the trust deed and any amending, supplemental or
replacement trust deed;
(c) any document appointing a REIT manager or setting out
the terms of appointment, the role or obligations of a
REIT manager;
(d) any document appointing a property manager, project
manager certifier or structural engineer or setting out the
terms of appointment, the role or obligations of such
persons;
(e) any document described in paragraph (b), (c) or (d) above
which relates to an investee trust; and
18
 (f) the Memorandum and Articles of Association of any
investee company and any shareholders’ agreement
including any amendment or supplement or
Memorandum and Articles of Association of
shareholder’s agreement.

“secondary disposition trustee” means an additional trustee

appointed by the Authority, the scheme documents or the
trustee as a joint trustee with limited powers pursuant to
regulation 45;

“securities” means any instrument defined as such under the

Capital Markets Authority Act and includes REIT securities;

“special resolution” means a resolution passed by a majority of not

less than three-fourths of the holders of REIT securities being
entitled so to do, vote in person or where proxies are permitted
by proxy, at a general meeting of holders of REIT securities of
which at least twenty-one days’ written notice specifying the
intention to propose the special resolution has been given;

“substantial holder of REIT securities” means a person who holds

fifteen percent or more of the issued REIT securities in a
scheme, where for the purposes of calculating the fifteen
percent, in addition to any REIT securities held by the holder,
that person is also considered to be the holder of any REIT
securities held by—

(a) an associate of a holder who is an individual; or

(b) a director, senior executive, officer, controlling entity,

holding company, subsidiary or associated company of
the holder, if the holder is an entity;

“total asset value” or “TAV” means the value of all assets of the
fund based on the most recent valuation;

19
“transaction adviser” means a person appointed under regulation 33
and licenced under the Capital Markets Authority Act to
undertake such activities;

“trust deed” in relation to a real estate investment trust scheme,

means the trust deed or other document which establishes or
sets out the terms of the trust and includes—

(a) any instrument that varies the terms of the trust or affects
the powers or functions of the trustee or any manager
appointed in respect of the trust; and

(b) any instrument that varies the rights of beneficiaries

under the trust including the REIT securities holders;

“trustee” means the person holding title to the property of a unit

trust scheme on trust for the participants and in relation to a
collective investment scheme constituted under the law of a
country or territory outside Uganda, or any person who
whether or not under a trust is entrusted with the custody of the
property in question;

“unit” means a REIT security being any undivided share, right,

interest or entitlement in the assets of the real estate
investment trust which is classified as a security under the Act;

“unit holders” or “securities holders” means holders of the REITS

securities;

“valuation report” in respect of a real estate investment trust

scheme, means a report made by a valuer; and

“valuer” for the purposes of REIT securities, means a person

appointed as such under these Regulations to prepare a
valuation report.

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PART II—ESTABLISHEMNT OF A REAL ESTATE INVESTMENT TRUST SCHEME

4. Scheme to comply with these Regulations.

A person who intends to establish a trust, scheme, an arrangement or any
form of a collective investment scheme as a real estate investment trust
scheme, shall not refer or call such trust, scheme, arrangement or
collective investment scheme, a real estate investment trust scheme,
unless the trust, scheme, arrangement or collective investment scheme is
authorised under regulation 19.

5. Requirement for prior consent.

(1) Where a promoter or any person who proposes to invest, sell,
assign or transfer real estate to a real estate investment trust, is regulated
by another body or authority, that person shall obtain the consent of the
other body or authority before the submission of any application for
authorisation as a real estate investment scheme to the Authority.
(2) A breach of sub-regulation (1) shall not make void any
transaction entered into or prevent the trustee from pursuing any
remedies the trustee may have against any other person, but shall prevent
any action by the other promoter or other party against the trustee for
non-performance of any contract entered into in contravention of this
regulation.

6. Structure of a real estate investment trust.

A real estate investment trust scheme shall—
(a) be structured as an unincorporated entity trust which is divided
into units;
(b) be established under a trust deed which provides for the
matters set out in Schedule 2;

(c) have a trustee who is independent of the REIT manager and

promoter and satisfies the requirements of these Regulations;
and

(d) have a REIT manager and a trustee licenced by the Authority.

21
7. Term of the trust.
(1) The trust deed shall specify the term of the trust which shall not
exceed the maximum period permitted under any written law.

(2) A real estate investment trust scheme shall not extend beyond
the term of the trust.

8. Assets of the scheme.

(1) All assets of the real estate investment trust scheme shall—

(a) be held in the name and under the control of the trustee for the
benefit of REIT securities’ holders as the beneficiaries of the
trust in accordance with the terms of the trust deed;

(b) only be invested in eligible investments;

(c) be segregated from the assets and liabilities of the trustee and
shall not to be included in the assets of the trustee in the event
of—

(i) claims by creditors of the trustee;

(ii) the insolvency, winding up, takeover, restructure or
amalgamation of the trustee;

(iii) winding up of the scheme;

(iv) dissolution of the scheme; or
(v) the amalgamation or restructure of the scheme.
(2) A trustee may, subject to the Act and the terms of the trust deed,
enter into borrowing arrangements for the purposes only of fulfilling the
objectives of the trust and may pledge or give security over the assets of
the trust scheme to secure such borrowing.

9. Types of real estate investment trust schemes.

(1) A real estate investment trust scheme may, subject to these
Regulations, be structured as—
22
 (a) a development and construction real estate investment trust
scheme or a D-REIT; or

(b) an income real estate investment trust scheme or an I-REIT.

(2) A D-REIT may, subject to these Regulations, convert into an I-

REIT.

10. Status of the fund and redemption of units.

(1) An I-REIT offered to the general public shall be structured as a
closed ended fund and must be listed.

(2) An I-REIT which is restricted to only professional investors

may convert its status to a D-REIT offered to the general public.

(3) Nothing in these Regulations shall restrict the trustee from

offering to acquire units from holders of D-REITs or I-REITs on a
voluntary basis or from issuing additional units from time to time.

11. Objectives of D-REIT.

The objectives of a D-REIT and the powers of a trustee of a D-REIT, as
specified in the trust deed, shall be limited to—

(a) the acquisition of eligible real estate, investment in eligible

investments and the undertaking of real estate development,
construction projects and associated activities which may,
include housing projects involving—

(i) provision of buy to let housing;

(ii) tenant purchase schemes and arrangements;

(iii) development of to let housing for sale;

(iv) development of to hold and let housing;

(v) development of for sale housing; or

23
 (vi) any combination of the above, or any other form of
provision of shelter, housing or accommodation;
(b) the acquisition of eligible real estate, investment in eligible
investments and the undertaking of real estate development
and construction projects and associated activities which may
include commercial and other real estate related development
and construction projects;

(c) marketing and sale of real estate;

(d) retention and management of the real estate assets of the trust
with the objective of earning income from the assets;
(e) the undertaking of incidental and associated activities and
activities related to the assets of the trust; and
(f) such other activities as provided under these Regulations;

12. Objectives of I-REIT.

The objectives of an I-REIT and the powers of the trustee of an I-REIT,
as specified in the trust deed, shall be limited to—

(a) the acquisition for long-term investment of income generating

eligible real estate and eligible investments which, for the
avoidance of doubt, may include housing, commercial and
other real estate;

(b) marketing and sale of real estate assets;

(c) retention and management of the real estate assets of the trust
with the objective of earning income from the assets;

(d) the undertaking of incidental and associated activities and

activities related with the assets of the trust;

(e) the undertaking of development and construction activities as

provided under these Regulations; and

(f) such other activities as provided under these Regulations.

24
13. Restriction on provision of loans or mortgages by REITS.
A D-REIT or an I-REIT shall not engage in the provision of mortgages
or other forms of lending or debt finance except—

(a) in the case of housing or other real estate assets developed or

constructed by a D-REIT, the D-REIT may provide—
(i) a mortgage;
(ii) other form of secured loan;
(iii) secured finance; or
(iv) any form through a progressive purchase mechanism;

for the purpose of assisting a tenant or other purchaser to

acquire a housing from the D-REIT; or

(b) where a D-REIT has provided finance to a purchaser and

subsequently converts to an I-REIT, the I-REIT may continue
to hold such loans or mortgages as assets but shall not engage
in additional lending or provision of mortgages.

14. Reference to D-REIT and I-REIT to include a reference to the

trustee.
Reference of a REIT to a real estate investment scheme and reference to
a D-REIT or an I-REIT in a provision which requires, empowers or
authorises the real estate investment trust, real estate investment scheme,
D-REIT or I-REIT to undertake any act or thing or imposes a restriction
on the powers or imposes an obligation, shall be read as including a
reference to the trustee of the REIT and where the context permits to the
REIT manager as if it was a reference to the trustee or to the REIT
manager.

PART III—AUTHORISATION OF REAL ESTATE INVESTMENT TRUST

SCHEMES

15. Restriction on offer and promotion.

(1) A person shall not—

25
 (a) issue or cause to be issued any advertisement—
(i) inviting any persons to become or offer to become an
investor or a holder of REIT securities; or
(ii) containing information which may lead that person to
directly or indirectly become a participant in such a
scheme;
(b) procure a person to become an investor or a holder of REIT
securities,unless the REIT securities are for a scheme that has
been authorised by the Authority.

(2) This regulation and regulation 16 shall not apply to an offer or

issue made to a promoter or any person connected with the promoter or
to the procurement of services of such a person to become a holder of
REIT securities.

16. Prohibited activities before an authorisation.

A person shall not issue REIT securities in a real estate investment trust
or in connection with a real estate trust investment scheme unless that
person has made an application to the Authority for an authorisation and
the Authority has granted the authorisation.

17. Application for authorisation.

(1) A promoter and a trustee shall jointly apply to the Authority for
an authorisation of a real estate investment trust scheme.

(2) An application made under sub regulation (1) shall contain the
information prescribed in Form 1, in Schedule 3; and specify if the
scheme is to be authorised as an I-REIT or a D-REIT.

18. Documents required upon application.

(1) An application under regulation 17 shall be accompanied by—

(a) the prescribed application fee;

(b) a draft trust deed or the trust deed;

26
(c) a draft Prospectus or an Information Memorandum;

(d) an agreement or draft management services agreement with

the REIT manager;

(e) an agreement or draft agreement with any property manager;

(f) an agreement or draft agreement with the project manager

certifier;

(g) certified copies of any other scheme documents and of

material contracts;

(h) certified copies of valuation reports of properties vested in or

to be vested in, acquired or transferred or to be acquired or
transferred;

(i) reports of experts and consents of experts to inclusion;

(j) a legal opinion by an advocate in respect of—

(i) title, encumbrances and the terms of contracts and status

of registration real estate and other assets vested in or
detailed in the Prospectus or Information Memorandum
that is to be vested in, acquired or transferred to the
trustee as assets of the trust; and

(ii) the compliance of the trust deed with these Regulations;

(k) a contract with the structural engineer and a certified copy of

the report of the structural engineer;

(l) audited financial statements of the REIT manager for the

financial year immediately preceding the application for
authorisation or related documentation that can confirm
financial capacity of the REITS Manager;

27
 (m) audited financial statements of the trustee for the financial
year immediately preceding the application for authorisation;
and

(n) such other documents as the Authority may determine from

time to time.

(2) The Authority may require the applicant to furnish additional

information, verification and copies of any additional documentation.

19. Authorisation orders.

(1) The Authority may, after consideration of an application and
upon determination that a scheme does not have a name that is
undesirable or misleading, make an order declaring a real estate
investment trust scheme to be an authorised scheme.
(2) An order under sub regulation (1) may include terms and
conditions as the Authority considers fit.
(3) The Authorisation Certificate shall be in the Form 2 set out in
Schedule 3 and shall not—
(a) be construed as a recommendation as to the merits of a real
estate investment trust scheme; or

(b) render the Authority liable for any action in damages suffered
by any person as a consequence of the authorisation.

20. Liability of the trustee, REIT manager or auditor.

(1) Subject to regulation 26, 27, 45 and 49 in relation to a secondary
disposition trustee, any provision in the scheme documents of a REIT
scheme which exempts or purports to exempt a REIT manager, a trustee,
a secondary disposition trustee or an auditor from liability for any failure
to exercise due care and diligence in the discharge of their functions in
respect of the REIT scheme is void provided that the trustee in an
undertaking arrangement to borrow or finance the REIT scheme, is
entitled to limit its liability for any money borrowed within the scope of
its authority, to the assets of the fund.
28
 (2) Notwithstanding any provision in the scheme documents, a
trustee including a secondary disposition trustee, a REIT manager or an
auditor shall be liable for any loss, damage or depreciation in the market
value of the securities or other assets in which the scheme assets are
invested where such loss, damage or depreciation arises—
(a) in the case of the trustee or the REIT manager, from a breach
of their fiduciary duties or obligations;
(b) from the failure to exercise due care and diligence in the
discharge of their functions;
(c) from negligence whether professional or otherwise; or

(d) from wilful default by the trustee, secondary disposition

trustee, REIT manager or auditor or their agents, employees or
associates.

21. Revocation of authorisation.

(1) The Authority may revoke an authorisation of a real estate
investment trust scheme, where the Authority has reason to believe—

(a) that any requirement or condition for the granting of an

authorisation is no longer satisfied;

(b) that it is undesirable in the interests of the REIT securities

holder or potential REIT securities holder that the scheme
continues as an authorised scheme;

(c) that any proposal to restructure the scheme including changing

the trustee or the REIT manager would not adequately protect
the interests of the REIT securities holders, or

(d) that without prejudice to paragraph (b), that the trustee or

REIT manager has—

(i) furnished the Authority with false, inaccurate or

misleading information; or
29
 (ii) contravened any provisions or requirement under the Act
or these Regulations.

(2) The Authority shall give the REIT an opportunity to be heard

before it revokes an authorisation of a real estate investment trust
scheme.

(3) For the purpose of sub regulation (1) the Authority may take
into account any matter relating to the scheme, the trustee, the REIT
manager or an officer or controller of the trustee or REIT manager or any
director of, person employed by, or associated with the trustee or REIT
manager in connection with the scheme.

(4) The Authority may also revoke an authorisation at the request

of the trustee.

(5) Where the Authority proposes to revoke an authorisation under

sub regulation (1)—

(a) it shall give the trustee and the REIT manager a written notice
of its intention to revoke the authorisation and provide them
with the opportunity to make submissions in writing or in
person;

(b) it shall state in the notice—

(i) the reasons for which the Authority proposes to revoke

the authorisation; and

(ii) that the trustee provides a copy of the notice, to the REIT
securities holders.

22. Winding up of a real estate investment trust scheme.

(1) The Authority may, where it has revoked an authorisation under
regulation 21, apply to the court to appoint a person to wind up the real
estate investment trust scheme.

30
 (2) Where the Authority has made an application under sub
regulation (1) the Authority shall—
(a) give a written notice to the trustee and the REIT manager of
the application; and

(b) notify the REIT securities holders.

23. Termination of a real estate trust scheme by the promoter,

trustee or REIT manager.
(1) Where the trustee initiates a revocation under regulation 21(4),
the trustee shall apply to the Authority for termination of a real estate
investment trust scheme.

(2) An application under sub regulation (1) shall be accompanied

by a plan for winding up.

(3) The Authority shall approve the plan for winding up submitted
under sub regulation (2), if the Authority is satisfied that the interests of
the REIT securities holders are properly protected.

24. Power of the court in winding up of a real estate investment

trust scheme.
(1) The trustee, the REIT manager or any REIT securities holder
may make an application to court for an order to wind up the operations
of an authorised scheme.

(2) The trustee or REIT manager shall give the Authority and REIT
unit holders notice of the application being made and the grounds for the
application.

(3) The Authority or the REIT securities holders shall upon

application to wind up, notify the trustee or REIT manager their
intention to wind up.

(4) The court may make an order under sub regulation (1) if the
court is satisfied that—
31
 (a) the scheme is being operated in contravention of the relevant
laws or the scheme documents;

(b) it is in the interest of the REIT securities holders or in public

interest to terminate the scheme; or

(c) it is just and equitable to make the order.

25. Restriction on the issue or offer of REIT securities.

(1) A person who invites another person—

(a) to enter into an agreement with the view to subscribe for REIT
securities; or

(b) to acquire or underwrite the issue or offer of any REIT

securities, shall be considered to be issuing or offering REIT
securities.

(2) A person shall not—

(a) make an offer of or issue REIT securities or other securities in

respect of a REIT or a REIT scheme unless the offer or issue
is made—

(i) in accordance with a Prospectus or an Information

Memorandum which contains the information as set out
in Form 3, as prescribed in Schedule 3 and has been
approved by the Authority; and

(ii) in respect of a real estate investment trust scheme which

has been authorised by the Authority either as a D-REIT
or an I-REIT; or

(b) act as an agent in the sale, issue or offer of REIT securities

unless that person is licenced by the Authority.

(3) A prohibition under sub regulation (2) shall not restrict—

32
 (a) an offer of REIT securities to a promoter of a scheme or to a
connected person;

(b) a promoter or connected person from entering into an

agreement to acquire REIT securities in exchange for or part
exchange or the transfer of real estate into a proposed scheme;
and

(c) an offer or issue of REIT securities to a promoter or connected

person which are subject to the restriction that the securities
cannot be subsequently transferred by the promoter except as
a consequence of the winding up or death of the promoter.

26. Obligations of a promoter in an initial offer or issue of REITs

securities.
(1) A promoter shall be deemed to be the offeror or issuer of the
initial offer or issue of REIT securities to a person who is not a promoter
or connected with the promoter and shall have continuing liability for—

(a) any covenants and warranties contained in the Prospectus or

Information Memorandum;

(b) any misleading or deceptive statements made in any

Prospectus or Information Memorandum; or

(c) omissions from any Prospectus or Information Memorandum.

(2) Notwithstanding that the trustee is required under regulation 17,

to be an applicant for authorisation of the scheme and the role that it
plays in the issue of REIT securities, the trustee is not deemed to be the
issuer and its liabilities may be limited to liability—

(a) for covenants and warranties provided by the trustee; and

(b) for misleading and deceptive statements in respect of the

trustee that have been included in the Prospectus or
Information Memorandum with approval of the trustee in its
capacity as an expert.
33
27. Obligations of a REIT manager in a subsequent offer or issue
of REITs securities.
(1) A person who is a REIT manager at the time of a subsequent
issue or offer of REIT securities made after the initial offer or issue shall
be taken to be the issuer or offeror of any subsequent issue or offer and
shall have continuing liability for—
(a) any covenants or warranties provided by that REIT manager;
(b) misleading or deceptive statements made in any Prospectus or
Information Memorandum; and
(c) omissions from any Prospectus or Information Memorandum,
made or issued by it while that person was the REIT manager
notwithstanding that that REIT manager subsequently ceases to be the
REIT manager.
(2) The liability of the trustee in the case of any subsequent offer
shall be limited to liability for—
(a) covenants and warranties provided by the trustee; and
(b) misleading and deceptive statements in respect of—
(i) the trustee that have been included in the Prospectus or
Information Memorandum with approval of the trustee in
its capacity as an expert; and
(ii) Which the trustee is aware of or should have been aware
of as a consequence of its role as trustee of the scheme.

PART IV—OFFERS IN RESPECT OF A D-REIT

28. Offers in respect of a D-REIT.

(1) An offer or an issue of D-REIT securities may only—
(a) be made to professional investors;

(b) be offered in minimum subscription or offer parcels of seven

thousand five hundred currency points; and
34
 (c) subject to these Regulations, be transferred to a party whom
the REIT securities could have been issued or offered.

(2) A D-REIT shall have a minimum of seven investors.

(3) The minimum value of the initial assets of real estate investment
trust in a D-REIT shall be two hundred fifty thousand currency points.

(4) A minimum of twenty-five percent of the total of REIT

securities in the trust by value shall be free float however this provision
shall not apply where additional REIT securities are issued to—

(a) the promoter;

(b) the REIT manager; or
(c) parties associated or connected with either the promoter or the
REIT manager, for the funding of an unscheduled cost overrun
on a development or construction, in circumstances that such
REIT securities during the time that they are held by the
promoter, REIT manager or a connected person or associated
party shall not be entitled to voting rights in respect of such
additional REIT securities but may be entitled to participate in
any distribution in respect of such REIT securities.

(5) Subject to sub regulation (4), a minimum free float of twenty-

five percent of the REIT securities on issue at any time shall be held by
investors who are not connected persons or associated with the promoter
or the REIT manager.

(6) The trustee shall decline to register any issue or transfer a REIT
security if the trustee believes that the issue or transfer would result in
non-compliance with the free float requirements.

(7) The trustee shall, in registering or declining to register an issue

or a transfer under sub regulation (6), be entitled to rely on any
certification given by the subscriber or transferee that he or she is not a
connected person or associated with the promoter or the REIT manager.
35
29. Listing of D-REIT securities.
D-REIT securities, if listed, may only be listed on a market segment of
a securities exchange approved by the Authority which limits—
(a) trading to a restricted minimum parcel size of seven thousand
five hundred currency points; and

(b) investors who may trade on such market segment of the

securities exchange are restricted to those to whom an offer of
the D-REIT securities could have been made.

PART V—OFFERS IN RESPECT OF AN I-REIT

30. Offers in respect of an I-REIT.

(1) An offer or an issue of REIT securities in an I-REIT shall be
made either as—
(a) an offer to professional investors in accordance with an
Information Memorandum; or
(b) an offer to the general public in accordance with a Prospectus.

(2) REIT securities in an I-REIT may be offered as a restricted offer

in minimum subscription or offer parcels of seven thousand five hundred
currency points and may, subject to these Regulations, only be
transferred to a party to whom they could have been issued or offered.

(3) A I-REIT shall, subject to any greater number as may be

required by the listing rules of a securities exchange, have a minimum of
seven investors.

(4) The minimum value of the initial assets of a real estate

investment trust in an I-REIT shall be four hundred and fifty thousand
currency points.

(5) A minimum of twenty-five percent of the total of REIT

securities in the trust by value shall be free float, however this provision
shall not apply where additional REIT securities are issued to—
36
 (a) the promoter;

(b) the REIT manager; or

(c) any party associated or connected with either the promoter or

the REIT manager, for the funding of an unscheduled cost
overrun on a development or construction, provided that such
REIT securities during the time that they are held by the
promoter, REIT manager or a connected person or associated
party shall not be entitled to voting rights in respect of such
additional REIT securities but may be entitled to participate in
any distribution in respect of such REIT securities.

(6) Subject to sub regulation (5), a minimum of twenty-five percent

of the REIT securities on issue at any time shall be free float.

(7) The trustee shall decline to register any issue or transfer of a

REIT security if the trustee believes that the issue or transfer would
result in non-compliance with the free float requirements.

(8) The trustee shall, in registering or declining to register an issue

or a transfer under sub regulation (7)), be entitled to rely on any
certification given by the subscriber or transferee that that person is not
a connected person or associated with the promoter or the REIT
manager.

31. Listing of securities of an I-REIT.

An issue or offer of REIT securities in an I-REIT, if made as—

(a) an offer to the general public, shall be listed on a market

segment of a securities exchange approved by the Authority;
and

(b) an offer to professional investors only, if listed, may only be

listed on a market segment of a securities exchange authorised
by the Authority which limits—

37
 (i) trading to a restricted minimum parcel size of seven
thousand five hundred currency points; and
(ii) investors who may trade on such market segment of a
securities exchange to those to whom an offer of the
securities could have been made.

PART VI—PROVISIONS APPLYING TO OFFERS OF BOTH D-REITS AND I-

REITS

32. Exception to limitations on transfers in case of a restricted issue

or offer.
The restrictions on transfers in a D-REIT or an I-REIT shall not operate
to restrict—
(a) transfers as a consequence of death or insolvency or other in
specie transfer; or
(b) prevent the trustee from registering a transfer;
provided that evidence has been submitted with the request for transfer
which sufficiently establishes that the transferee is either a professional
investor or that one of the exemptions applies.

33. Appointment of a transaction adviser.

A person who proposes to make an offer or list REIT securities shall
appoint a transaction adviser to ensure that the offer or listing is made in
accordance with the provisions of these Regulations and the Act.

34. Appointment of a registrar.

(1) An issuer shall, where an offer of REIT securities is to be listed,
appoint a note registrar for the offer and listing of the REIT securities.
(2) A registrar appointed under sub regulation (1) shall comply with
the requirements and responsibilities as may be prescribed by the
Authority.

35. Publication of a Prospectus or an Information Memorandum.

(1) An issuer or an offeror shall, in case of an offer which is—
38
 (a) made to the general public, publish a Prospectus by making it
available to the public, without any charge, at an address in
Uganda, from the time that the securities are first offered until
the end of the period during which the offer remains open; and

(b) made to professional investors, prepare an Information

Memorandum and make it available to prospective investors.

(2) A person shall not publish or circulate a Prospectus or an

Information Memorandum unless—

(a) the real estate investment trust scheme has been authorised by
the Authority; and

(b) the Prospectus or Information Memorandum, as the case may

be, has been approved by the Authority.

(3) The restrictions imposed by this regulation shall not operate to

prevent the issue or offer of REIT securities to a promoter or a connected
person or any person entering into an agreement to acquire REIT
securities in exchange for or part exchange for the vesting or transfer of
real estate into a proposed real estate investment trust scheme.

(4) A person shall not, without the prior written approval of the
Authority, issue an advertisement announcing an issue or offer of REIT
securities unless a Prospectus has been published and the advertisement
gives an address in Uganda from which the Prospectus can be obtained.

(5) Where a real estate investment trust scheme desires to undergo

a process of conversion under regulation 86 and 87, the REIT manager
shall prepare and have a conversion Information Memorandum or a
conversion Prospectus as the case may be, approved by the Authority.

(6) The Authority shall not be liable for any action in damages
suffered by any person as a result of a Prospectus or Information
Memorandum approved by the Authority.

39
36. Expert statement.
(1) A Prospectus or an Information Memorandum shall not include
a statement purporting to be made by an expert if that person is or has
been, engaged or interested in the formation or promotion of the real
estate investment trust scheme or the offer of the REIT securities or in
the management of the promoter or the REIT manager or is a person
connected with the promoter, the trustee or the REIT manager.
(2) A Prospectus or an Information Memorandum which includes a
statement made by an expert or is based on a statement made by an
expert shall not be issued unless the expert has given, and has not
withdrawn, before issue of the Prospectus or Information Memorandum,
written consent to the issue of the Prospectus or Information
Memorandum and the inclusion of the statement in the form and context
in which it is included.

37. Disclosure of financial structuring.

(1) Any measures proposed in the Information Memorandum or
subsequently introduced in the funding, structuring, management or
operation of the REIT by way of structuring or financial structuring
which may include—
(a) deferral of REIT manager’s fees;
(b) the use of two classes of REIT securities one class of which for
a limited period is entitled to no or a lower yield than other
classes of REIT securities;
(c) inclusion of tenancies with above market rents or minimum
rental;
(d) guarantees from the issuer or a connected person, or
(e) other measures or interventions,
which are designed to or have the effect of improving the natural or
unstructured yield or distribution levels in any financial year by more
than five percent above those that would otherwise result from the net
income generated from the assets of the fund without the adoption of
such measures—
40
 (i) such measures shall be specifically disclosed and clearly
identified in any Prospectus or Information
Memorandum;
(ii) the implications of the absence of, the removal or expiry
of such measures on yield, cash flows, distributions and
the risk profile of the REIT in the short and longer term
shall be simply and clearly identified, and

(iii) a sensitivity table shall be included in the Prospectus or

Information Memorandum which demonstrates the
impact of the measures.

(2) Where the measures in sub regulation (1) are introduced

subsequent to the issue of any Prospectus or Information Memorandum,
then the measures should be clearly identified and their impact should be
reported as part of the continuing disclosure reporting under regulation
43 and in annual reports under regulation 103.

38. Approval of Prospectus or Information Memorandum.

(1) The Authority may approve a Prospectus or Information
Memorandum if the Prospectus or Information Memorandum—

(a) has been signed by—

(i) the issuer;

(ii) the REIT manager and the trustee; and

(iii) an expert or other person who consents to the inclusion of

statements made by them or undertakes the roles
attributed to them including, but not limited to the
property manager; any project manager certifier, valuer
and the structural engineer;

(b) contains all information which investors and their professional

advisers would reasonably require, for the purposes of making
an informed assessment of the—

41
 (i) assets, liabilities, financial position, profits, losses and
prospects of the REIT scheme and the REIT securities;
and

(ii) rights attaching to those securities;

(c) contains such information and particulars as set out in Form 3,

Schedule 3 and

(d) complies with such other requirements as prescribed by the

Act.

(2) Approval by the Authority may be subject to such conditions or

restrictions as the Authority may consider necessary.

(3) In the case of any supplemental Prospectus or supplemental

Information Memorandum for which approval is sought by the issuer,
the Prospectus or Information Memorandum shall meet the requirements
under sub regulation (1) and the requirements as set out in Form 3,
Schedule 3 as relate to a supplemental Prospectus or supplemental
Information Memorandum.

(4) In the case of a conversion Prospectus for which approval is

sought by the REIT manager in accordance with regulation 86, the
conversion Prospectus shall meet the requirements under sub regulation
(1) and the requirements as set out in Form 3, Schedule 3 as relate to a
conversion Prospectus.

(5) The Authority may require the applicant whenever approval is

sought to furnish additional information, verification and copies of
additional documentation.

(6) A Prospectus or Information Memorandum approved by the

Authority shall be valid for a period of six months.

(7) The Authority shall not be liable for any action in damages
suffered by any person as a consequence of the Authority approving any
Prospectus or Information Memorandum concerning the scheme.
42
 (8) The approval of a Prospectus or an Information Memorandum
by the Authority shall not operate to waive, relieve or reduce the
obligation of any person to make a disclosure or provide a defence to any
action under the Act or any other law.

39. Liability for a defective Prospectus or an Information

Memorandum.
(1) A person who—

(a) makes a false, misleading or deceptive statement in a

Prospectus or an Information Memorandum; or

(b) omits information or a statement from a Prospectus or an

Information Memorandum as required by these Regulations,
commits an offence and is, liable on conviction to a fine not
exceeding two hundred and fifty currency points or
imprisonment not exceeding two years or both.

40. Remedy for unfair prejudice or conduct of a scheme.

(1) The Authority may issue a direction where it reasonably
believes that the affairs of a scheme are being or have been conducted—

(a) in a manner prejudicial to the interests of—

(i) the REIT securities holders;
(ii) investors in the securities market; or
(iii) some part of REIT securities holders or investors; or
(b) contrary to the law.

(2) A direction issued by the Authority under sub regulation (1)

may—

(a) restrain the carrying out of a particular act or conduct;

(b) require the removal and replacement of the trustee or the REIT
manager;
43
 (c) require the trustee to initiate proceedings in Court, in the name
of the trustee for the benefit of REIT securities holders, against
any person on such terms as the Authority considers fit;
(d) impose conditions on the operations or conduct of affairs of
the scheme in future;

(e) specify the manner of—

(i) purchase of REIT securities of any REIT securities

holder in the scheme; and

(ii) the redemption of any REIT securities.

(3) The Authority may, in addition to any direction issued under sub
regulations (1) or (2), apply to Court for an order of appointment of a
receiver or manager to wind up the operations of the scheme.

(4) The Court may in its discretion, after considering an

application, make an order—

(a) requiring the appointment of a receiver or manager for the

whole or part of the assets of the scheme;

(b) specifying the powers and duties of the receiver or manager.

(c) provide for compensation; and

(d) provide for the recovery of assets.

41. Compensation for false or misleading Prospectus or

Information Memorandum.
(1) This regulation applies—

(a) to an issuer of REIT securities to which a Prospectus or

Information Memorandum relates;

(b) where the issuer is a body corporate;

44
 (i) to each person who is a director of that body corporate at
the time when the Prospectus or Information
Memorandum is published; and
(ii) to each person who has given his or her consent to be
named and is so named in the Prospectus or Information
Memorandum as a director or has agreed to become a
director of that body corporate either immediately or at a
future time;
(c) to each person who accepts, and is stated in the Prospectus or
Information Memorandum as accepting responsibility for, or
for any part of, the Prospectus or Information Memorandum;

(d) to the offeror of REIT securities, where the offeror is not the
issuer;

(e) where the offeror is a body corporate, but is not the issuer and
is not making the offer in association with the issuer, to each
person who is a director of that body corporate at the time
when the Prospectus or Information Memorandum is
published; and

(f) to each person not falling within any of the foregoing

paragraphs who has authorised the contents of, or of any part
of the Prospectus or Information Memorandum including any
expert who has consented to the inclusion of its report or
opinion in the Prospectus or Information Memorandum.

(2) A person to whom sub regulation (1) applies, shall be jointly

and severally liable to pay compensation to any person who acquires any
of the REIT securities in reliance on the Prospectus or Information
Memorandum, including acquisition in the secondary market, to which
the Prospectus or Information Memorandum relates, and suffers loss as
a result of—

(a) any false or misleading statement in the Prospectus or

Information Memorandum; or
45
 (b) the omission of any matter required by the Act or these
Regulations to be included in the Prospectus or Information
Memorandum.

(3) Notwithstanding the provisions of sub regulation (2), a person

shall not be responsible for statements or warranties included in a
Prospectus or an information Memorandum or scheme document–

(a) under sub regulation (1)(a), (b) or (c), unless the issuer has
made or authorised the offer in relation to which the
Prospectus or Information Memorandum is published; or

(b) under sub regulation (1)(b), (c), (e) or (f), if such statement is
included or the Prospectus or Information Memorandum is
published without his or her knowledge or consent and on
becoming aware of its publication, that person forthwith gives
reasonable notice to the public and to the Authority that the
statement was included or Prospectus or information
Memorandum was published without the knowledge or
consent of that person.

(4) A person shall, where that person has accepted responsibility

for, or authorised only part of the contents of a Prospectus or information
Memorandum, be liable under sub regulation (1)(c) or (f) only for that
part if it is included or substantially included in the form and context to
which that person has agreed.

42. Obligation to conduct due diligence.

(1) An issuer or offeror, a transaction adviser and any person who
is—
(a) appointed or proposed to be appointed as a REIT manager;

(b) involved or connected with the issue or offer of REIT

securities or the issue of a supplemental Information
Memorandum or supplemental Prospectus or conversion
Prospectus or conversion Information Memorandum; or
46
 (c) named as an expert in the Prospectus or Information
Memorandum;
shall conduct an independent verification and due diligence of all
statements made by or attributed to it, to which it has consented to being
included in the Prospectus or Information Memorandum and in respect
of any covenants or warranties provided by it which are included, with
consent, in the Prospectus or Information Memorandum or in any
scheme document associated or the issue or offer of the REIT securities.

(2) A person shall not be held liable for a statement in or omission

from a Prospectus or Information Memorandum or in respect of a
representation, covenant or warranty in a scheme document if that
person proves that, prior to making such statement, omission,
representation or warranty, that person—
(a) had made all inquiries, if any, that were reasonable in the
circumstances, and

(b) believed on reasonable grounds that the statement,

representation, warranty or omission was not misleading,
deceptive or material.

43. Continuing disclosure obligations of trustee and REIT

manager.
(1) A trustee and the REIT manager of a real estate investment trust
scheme whose securities have been issued in accordance with an
approved offer, shall keep the Authority, REIT securities holders, any
approved securities exchange, and in the case of an unrestricted REIT
scheme the general public informed by way of a public announcement,
as soon as reasonably practicable, but in any event not later than the end
of the next working day, of any information which the trustee or the
REIT manager becomes aware of relating to the real estate investment
trust, the REIT scheme, its assets or the REIT manager which is
necessary—
(a) to enable holders of REIT securities or potential investors to
appraise—
47
 (i) the financial position, performance and the state of
corporate governance of the real estate investment trust,
the scheme or the REIT manager; or

(ii) the valuation of any asset of the real estate investment

trust;

(b) to avoid the establishment of a false market in the REIT

securities; or

(c) might reasonably be expected to materially affect market

activity in the price of the REIT securities.

(2) The REIT Manager shall inform the trustee of any information
which is not within the knowledge and control of the trustee which
requires disclosure so as to enable the trustee to fulfil its obligations
under sub regulation (1).

(3) Without prejudice to the general effect of sub regulation (2), the
trustee shall ensure that the REIT manager has in place a mechanism for
updating information on a regular basis and shall obtain, if necessary,
updated information from any property manager, project manager
certifier, valuer, structural engineer or the auditor who shall, if requested
by the REIT manager or the trustee, provide all the necessary
information to enable the trustee and the REIT manager to fulfil their
obligations under sub regulation (1).

(4) The obligation to supply information under sub regulation (2)

shall be in addition to the obligation to provide periodic reports under
regulation 103 and the requirements of any approved securities
exchange.

(5) Without prejudice to the general effect of sub regulation (2), the
trustee and the REIT manager shall comply with a request for further
information by the Authority.

48
 PART VII—APPOINTMENT, REMOVAL AND OBLIGATIONS OF A TRUSTEE

44. Trustee to be licenced by the Authority.

(1) The trust deed for every real estate investment trust shall
comply with Schedule 2 and shall appoint a person to act as a trustee of
the real estate investment trust.

(2) A person who intends to act as a trustee in respect of—

(a) a real estate investment trust scheme for which an

authorisation is required; or

(b) any real estate investment trust, shall make an application to

the Authority to be licenced as a trustee.

45. Eligibility for appointment as a trustee.

(1) An application for a licence for a trustee may only be made by
a financial institution as defined in the Financial Institutions Act or an
insurance company as defined in the Insurance Act or such other
financial institution as the Authority may prescribe.

(2) A trustee shall be independently audited and shall have a

minimum issued and paid-up capital and non-distributable capital
reserves of at least one hundred and fifty currency points.

(3) Where the trustee appointed is the sole trustee and is not a trust
corporation the Authority may at the request of the trustee appoint a
REIT manager as a secondary disposition trustee for the purposes of
enabling compliance with powers limited to those necessary to allow
execution of documents and undertake any other matters to allow
compliance with the various land laws.

(4) Where the Authority appoints a person as a secondary

disposition trustee pursuant to sub regulation (3), that person may if
necessary be registered as a second trustee and at the request of the
trustee may execute any documentation as a second trustee.

49
 (5) The REIT manager may be appointed by the Authority to fulfil
the role of a secondary disposition trustee notwithstanding that the REIT
manager is not eligible to be appointed as a trustee and is not licenced as
a trustee and in making an appointment the Authority may limit the
powers of the secondary disposition trustee and impose such conditions
as it considers necessary.

46. Powers, obligations and duties of a trustee and any secondary

disposition trustee.
(1) The trustee, notwithstanding that it is the sole trustee, shall to
the extent permissible by law have power to give a valid receipt for the
proceeds of sale or other capital money arising under a disposition on
trust for the sale of land.
(2) The scheme documents may provide for the obligations and
general duties of a trustee provided the provisions are not in conflict with
the Act or these Regulations.
(3) The trustee and the employees or officers of the trustee who
undertake or supervise the carrying out of the role and functions of the
trustee shall—
(a) act in accordance with the terms of the trust deed and the
scheme documents;
(b) act honestly and in a fiduciary capacity as trustee in the best
interests of the REIT securities holders as beneficiaries of the
real estate investment trust;
(c) fulfil the obligations and duties set out in the scheme
documents in conformity with these Regulations;
(d) act in accordance with any other law applicable to trustees;
(e) maintain custody, hold and protect all the assets of the real
estate investment trust, ensure they are held in the name of and
where registration is provided for are registered in the name of
the trustee and if required in the name of any secondary
disposition trustee and ensure that all the necessary filings and
registrations are recorded, undertaken and maintained;
50
(f) protect interests of the real estate investment trust in any asset;

(g) ensure that the assets are—

(i) clearly identified as the assets of the trust and the scheme;
and

(ii) held separately from any other assets of the trustee and of
any secondary disposition trustee and any other trust,
scheme or person;

(h) appoint the REIT manager to protect the interests of the

beneficiaries, remove the REIT manager and appoint a
substitute REIT manager;

(i) act as the REIT manager on a temporary basis in any period

where there is no other REIT manager until a new REIT
manager is appointed;

(j) supervise the activities of the REIT manager to ensure that

they comply with the terms of the scheme documents and all
relevant laws;

(k) not delegate to the REIT manager except if appointed by the

Authority as a secondary disposition trustee or to any other
person not being an officer or employee of the trustee any
function of or involving—

(i) supervision of the REIT manager; or

(ii) the custody or control of the assets of the scheme;
(l) ensure that—
(i) the fund and the assets of the scheme are invested in
accordance with the terms of the trust deed;

(ii) the income of the scheme is applied in accordance with

the terms of the scheme documents;

51
 (iii) assets of the real estate investment trust which are
insurable are insured and valued as required by the
scheme documents;

(iv) all payments and distributions made out of the assets of

the scheme are made in accordance with the terms of the
scheme documents; and

(v) any borrowing limitations set out in the scheme

documents are complied with;

(m) act in the best interests of the beneficiaries and if there is a

conflict between the interests of the trustee and those of any
beneficiary, then the trustee shall give priority and preference
to the interest of the beneficiary; and

(n) not make use of confidential information acquired when acting

as the trustee to gain an improper advantage for itself or for
another person or to cause detriment to a beneficiary.

(4) Where a trustee or secondary disposition trustee contravenes the

obligations imposed on it by the scheme documents, any person who—

(a) has been involved materially in;

(b) participated materially in; or

(c) authorised such contravention, commits an offence and is

liable on conviction, to a fine of not exceeding two hundred
and fifty currency points or imprisonment not exceeding two
years or both.

47. Instructions from a REIT manager.

The trustee shall carry out the instructions of the REIT manager unless
the trustee has reasonable cause to believe that compliance with such
instructions would cause it to contravene the duties of the trustee under
the scheme documents or any other relevant law.
52
48. Change of address of the trustee.
A trustee shall notify the Authority and the REIT securities holders
within twenty-eight calendar days before the trustee changes its address,
registered office or permanent place of business in Uganda.

49. Liability of a trustee.

In addition to any obligation imposed under regulation 20 or the scheme
documents, the trustee may be liable to the holders of REIT securities as
a fiduciary, and to the REIT manager for any loss suffered by them
during its period as trustee or as a consequence of actions taken by it or
which it failed to take during such period which are as a result of—

(a) any failure by the trustee to perform its obligations; or

(b) the trustee’s improper performance of its obligations.

50. Exemption from taking action in respect of REIT assets.

(1) The trustee, may be exempted from taking action in respect of
the assets of the real estate investment trust or on behalf of the REIT
securities holders if the trustee has access to insufficient funds to pay the
costs and expenses of taking such action and that—

(a) the trustee has called a meeting of the beneficiaries or a class

of beneficiaries;

(b) the meeting called under paragraph (a) has failed to pass a
resolution to provide the funds necessary to conduct the action
or to provide the necessary funds within thirty days of the
passing of such resolution; and

(c) the trustee had given prior notice of the meeting to the
Authority.

51. Register of REIT securities holders.

(1) The trustee shall establish and maintain a register of REIT
securities holders of the scheme in a manner approved by the Authority.

53
 (2) The trustee may, with the prior written approval of the
Authority, appoint another person to establish and maintain the register
on behalf of the trustee.

(3) The register shall be conclusive evidence as to the persons

respectively entitled to the REIT securities registered in their name.

52. Voluntary resignation of trustee.

(1) The scheme documents may provide for the legal entitlements
of trustee upon retirement.

(2) A trustee shall not resign as trustee unless another person

eligible to be appointed a trustee has been appointed to act as the trustee.

(3) If the trustee wishes to resign he or she shall give not less than
three months’ notice in writing to the Authority, the REIT manager and
the REIT securities holders of his or her desire to resign and shall set out
in such notice its reasons for wanting to retire.

(4) The REIT manager in consultation with the trustee shall

negotiate with alternative parties who are eligible to be appointed to
undertake the role of trustee and within two months from the date of the
notice, the trustee may call a meeting at the expense of the trustee, of
REIT securities holders for the purposes of considering and passing a
special resolution in respect of any recommendation to appoint a new
trustee.

(5) The notice of meeting shall include—

(a) the consent in writing of any proposed trustee and an

acceptance of the appointment;

(b) the terms of the appointment including fees;

(c) a copy of the supplemental deed; and

(d) the approval of the Authority to any appointment.

54
 (6) In the event that the REIT manager is unable to find a
replacement trustee or the REIT securities holders fail to consent to the
appointment of any proposed replacement trustee before the expiry of
the period specified in the notice given in sub regulation (3), the trustee
may advise the Authority, the REIT manager and the REIT securities
holders of its intention to make an application to the Court for the
appointment of an eligible replacement trustee as provided under
regulation 45.

(7) The appointment of a new trustee shall take effect—

(a) in the case of a trustee appointed by the-REIT securities

holders, from the latter of the date of execution by the new
trustee of a supplemental trust deed and date of the completion
of the transfer or vesting in the new trustee of all of the assets
of the trust; and

(b) in the case of a trustee appointed by the Court, from the date
specified by the Court.

(8) All costs and expenses of or related to the resignation, change

and replacement of a trustee including those of the REIT manager shall
be the responsibility of the trustee.

(9) This regulation shall not override any provisions in the scheme
document which limit the trustee’s right to resign or any right of action
that a replacement trustee or the REIT securities holders may have
against the trustee.

53. Removal and replacement of a trustee.

(1) The scheme documents shall provide for a procedure for the
removal and replacement of a trustee.

(2) The Authority shall in all circumstances other than where

removal is ordered by Court, approve any removal and replacement of
the trustee.

55
 (3) The REIT securities holders shall, by way of a special
resolution, approve any removal and replacement of a trustee where the
removal and replacement of the trustee is not ordered by the Court or the
Authority.

(4) The REIT manager shall call and convene a meeting of the
REIT securities holders within one month of it becoming aware—

(a) that a court of competent jurisdiction has ordered for the

liquidation of the trustee except in case of a voluntary
liquidation for the purpose of reconstruction or amalgamation
under a scheme approved by the Authority;

(b) that a manager or a receiver is appointed over any of the

trustee’s assets; or

(c) that the trustee has ceased to be eligible for appointment as

provided for under regulation 45.

(5) The purpose of the meeting called under sub regulation (4),
shall be to consider the recommendation by the REIT manager on the
appointment of a replacement trustee or make an application to the Court
to appoint a person eligible for appointment as provided under
regulation 45 as a replacement trustee or as a temporary trustee and the
notice of the meeting shall include—

(a) in the case where the recommendation is made for the

appointment of a replacement trustee—
(i) the consent in writing of any proposed trustee and an
acceptance of the appointment;

(ii) the terms of the appointment and the fees involved;

(iii) the approval of the Authority to the appointment of a new
trustee; and
(iv) the supplementary trust deed;
56
 (b) an alternative recommendation that, in the event that a
replacement cannot be found or is not approved by a special
resolution at the meeting of REIT unit holders, an application
be made to the Court for the appointment of a replacement
trustee or a temporary trustee.

(6) In the event that the REIT manager is unable to find a

replacement trustee or the REIT securities holders fail to consent to the
appointment of a proposed replacement trustee or to approve an
application being made to the Court then the REIT Manager shall—

(a) advise the Authority, and

(b) as soon as possible, make an application to court for the

appointment of a person that is eligible for appointment under
regulation 45 as a replacement or temporary trustee.

(7) A REIT manager shall give a three months’ notice of removal

in writing to the trustee, with the approval of the Authority where—

(a) the trustee fails or neglects to carry out or satisfy any duty
imposed on the trustee in accordance with the scheme
documents and the relevant laws; or

(b) the trustee is in repeated breach of the Act, the scheme

documents or any written law.

(8) Subject to sub regulation (7), the REIT securities holders may
by ordinary or special resolution resolve—

(a) that a notice of removal be given to the trustee;

(b) that the appointment of a replacement trustee be approved; or
(c) that an application to court for the appointment of a
replacement trustee or temporary trustee be made.
(9) The appointment of a replacement trustee shall take effect—
57
 (a) in the case of a trustee appointed by the REIT securities
holders, from the latter of the date of execution by the new
trustee of a supplemental trust deed and date of the completion
of the transfer or vesting in the new trustee of all of the assets
of the trust; and
(b) in the case of a trustee appointed by court from the date
specified by the Court.
(10) The trustee shall, where the trustee is removed, resigns or is
otherwise replaced immediately—
(a) make available to the replacement trustee, all books, records,
reports, information and data including access to software and
source code which is within the possession or control of the
trustee relating to the activities of the scheme or the assets of
the trusts; and
(b) execute such notices to tenants, assignments and novations of
contracts as may be required.
54. Notification of contraventions.
The trustee shall, in addition to preparing any periodic reports required
under the law or any listing rules, notify the Authority, in writing—
(a) immediately after becoming aware of any matter or failure, act
or omission by the REIT manager or any other party involved
in the real estate investment trust scheme, which constitutes a
breach or contravention of any of the provisions of the Act or
the scheme documents; and
(b) of any steps taken or proposed to be taken by the trustee to
ensure that the breach or contravention is rectified as soon as
is reasonably practicable.
PART VIII—APPOINTMENT, REMOVAL AND OBLIGATIONS OF A REIT
MANAGER
55. Appointment of a REIT manager.
(1) The scheme documents shall provide for the appointment,
resignation and removal of a REIT manager.
58
 (2) The Authority may authorise a scheme to be self-managed by a
company which is wholly owned and controlled by the trustee and is an
eligible asset of the real estate investment trust.
(3) In considering whether a scheme should be self-managed the
Authority shall take into account—

(a) the type, objectives, history and performance of the REIT and
the number and type of REIT securities holders;

(b) the proposed terms of appointment;

(c) the resources including, human, systems and financial
resources that will be available to the company;
(d) the experience of the directors and senior management of the
company;

(e) the experience and history of performance of the trustee and

the resources available to it;
(f) the potential for conflicts of interest and the powers of the
trustee and REIT securities holders—
(i) to remove the company as REIT manager;

(ii) to appoint the directors of the company;

(iii) to limit conflicts of interest including the remuneration of

directors and employees of the company;
(iv) to limit the risks to the fund and to the unit holders
including the availability of insurance in respect of
negligent acts by the company as REIT manager or its
directors; and
(v) to control other factors that the Authority considers
relevant in the interests of REIT securities holders;
(g) the amendments proposed to the trust deed and the scheme
documents to reflect the scheme as self-managed.
59
 (4) Where the Authority authorises self-management through a
wholly owned company, the Act shall, except where expressly provided
for, apply to the REIT manager notwithstanding that it is a company that
is wholly owned.

(5) Any approval by the Authority for a scheme to be self-managed,

shall be conditional upon the trustee and the REIT securities holders
approving the appointment and the terms of the appointment.

(6) A REIT manager can only manage one real estate investment
trust scheme unless otherwise authorised by the Authority.

(7) Every REIT manager shall be appointed by the trustee with the
prior approval of the Authority.

56. Eligibility for appointment.

(1) A person appointed as a REIT manager of a REIT scheme or
any real estate investment trust shall be a person licenced by the
Authority as provided under regulation 124.

(2) The REIT manager shall be a company—

(a) incorporated or registered in Uganda;

(b) licenced as a collective investment scheme operator as

provided for by the Act;

(c) which demonstrates that it has—

(i) key personnel with the experience and skills in real estate
to manage the scheme;

(ii) the key personnel have the experience and skills in real
estate to implement the objectives of the scheme and to
permit it to undertake the role of and duties as REIT
manager, including property management, in compliance
with the law; or
60
 (iii) access to and will appoint from time to time as required
persons having the required skills to enable it to
implement the objectives of the scheme and to permit it
to undertake the role of and duties as REIT manager,
including property management, in compliance with the
law;

(d) that has a minimum paid up capital of ten thousand currency

points; and

(e) that is independently audited.

(3) The REIT manager may be associated with the promoter but the
board of directors of the REIT manager shall be comprised of at least
two independent directors one of whom shall be appointed as the
Chairperson.

(4) Where a REIT scheme is, with the approval of the Authority,
self-managed, then the directors of the REIT manager shall be appointed
by and subject to removal by the trustee.

(5) The REIT manager shall appoint a property manager approved

by the trustee to manage the real estates of the fund and shall be a person
with the necessary experience and expertise in real estate management.

(6) The REIT Manager shall be responsible for—

(a) the actions of any property manager; and

(b) supervising the property manager to ensure that the property

manager complies with the terms of scheme documents and
the related laws.

57. Duties of a REIT manager.

(1) The scheme documents shall provide for the legal obligations
and duties of the REIT manager.

61
 (2) The REIT manager shall subject to the terms of the scheme
documents and any directions in writing received from the trustee, in the
performance of its duties, act in the best interests of REIT securities
holders as beneficiaries of the real estate investment trust and take
reasonable care to protect those interests, and in particular—
(a) acquire, manage, maintain and dispose assets of the scheme
and where authorised by the scheme documents, conduct
development and construction activities—
(i) in accordance with the provisions of the Act and these
Regulations;

(ii) in accordance with the scheme documents;

(iii) in accordance with the law applicable from time to time to
trusts; and
(iv) to give effect to the objectives of the scheme;

(b) take all reasonable steps and exercise due diligence to avoid
the assets of the scheme being invested in contravention of the
scheme documents and the related laws;

(c) while acting in the capacity as a fiduciary on behalf of the

REIT securities holders—

(i) exercise a degree of care and diligence that a reasonable

and skilled person would exercise in the position of a
REIT Manager;

(ii) act in the best interests of the REIT securities holders and
if there is a conflict between the interests of the REIT
securities holders and that of the REIT manager, give
priority to the interests of REIT securities holders;

(iii) observe high standards of integrity and fair dealing in

managing the fund to the best and exclusive interests of
the REIT securities holders;
62
 (iv) not improperly make use of information acquired by being
the REIT manager to gain an improper advantage for
itself or other persons, or to cause detriment to the REIT
securities holders;

(v) ensure that the property of the fund is clearly identified and
held separately from the assets of the REIT manager or
any other person;

(vi) establish and maintain risk management systems and

controls and ensure that it has adequate resources and
systems, including suitably qualified and equipped
human resources to fulfil the functions and obligations of
a REIT manager;

(d) account to the trustee and the REIT securities holders for any
loss suffered by the fund as a result of the REIT manager, any
director of the REIT manager, any officer, employee or agent
including any property manager appointed by the REIT
manager for failure to exercise the required standard of care
and diligence necessary to operate and manage the fund;

(e) maintain on behalf of the trustee proper accounting records

and other records to enable an accurate view of the fund to be
formed;

(f) prepare accounts as provided under regulation 103 in the

prescribed form;

(g) provide all assistance necessary to permit the accounts

prepared under paragraph (f) to be audited as provided in these
Regulations;

(h) take all reasonable steps and exercise due diligence to assist
and ensure that the assets of the trust are valued as required
under regulation 113;

63
(i) obtain tenants and manage tenancy arrangements;
(j) carry out or cause to be carried out all property management
functions in compliance with applicable laws;

(k) obtain quotes for insurance of the assets of the trust and make
recommendations to the trustee;

(l) prepare budgets for capital works and maintenance of the

assets of the trust;

(m) recommend to the trustee for approval, the budgets for capital
works and maintenance prepared under paragraph (l);

(n) implement approved budgets, capital works and maintenance

programmes;

(o) prepare budgets and work programmes, negotiate contracts to

be recommended to the trustee for approval in relation to the
development and construction works including the
appointment of contractors and professional and expert
advisors;

(p) implement any budgets, work programmes and contracts

approved by the trustee in relation to development and
construction works, update budgets and work programmes as
required and recommend changes to the trustee;

(q) prepare and submit to the trustee recommendations on

distributions;

(r) undertake all calculations including calculations of net asset

values and ratios required to comply with the terms of the
scheme documents, the Act and these Regulations;

(s) arrange and recommend to the trustee for approval any

borrowings or other financing arrangements and the entering
into of any risk management products or strategies;
64
 (t) make recommendations to the trustee and manage repayment
and compliance with the terms of any borrowing arrangement
under paragraph (s);

(u) in the case of an unlisted trust, take all reasonable steps and
exercise due diligence to ensure that the REIT securities are
correctly priced and redemption provisions of the scheme
documents are complied with;

(v) prepare and lodge with the Authority and circulate to the
trustee and REIT securities holders periodic reports as
required under these Regulations;

(w) in the case of an unrestricted issue I-REIT, ensure that the

scheme documents are made available for inspection by the
public in Uganda, without any charge at all times during
normal office hours, and make copies of such documents
available upon the payment of a reasonable fee; and

(x) in the case of a D-REIT, ensure that the scheme documents are
available to any REIT securities holder or person who is
potentially qualified to be a REIT securities holder.

58. Connected party transactions.

(1) A REIT manager shall conduct all transactions in an open and
transparent manner.
(2) A REIT manager shall—
(a) not act or conduct transactions in a manner that would result
in unnecessary cost or risk to the fund; and
(b) at all times, in fulfilment of its fiduciary obligations to the
REIT securities holders, act in the best interests of the REIT
securities holders.
(3) A REIT manager shall comply with regulation 120 if the REIT
manager wishes to conduct a transaction with a connected person.
65
59. Change of address.
A REIT Manager shall notify the Authority and the REIT securities
holders, not less than twenty-eight calendar days before the REIT
manager changes its address, its registered office or permanent place of
business in Uganda.

60. Trustee requests to a REIT manager.

The REIT manager shall—

(a) at the request of the trustee, supply the trustee with such
information concerning the administration of the fund and of
the real estate investment trust and the scheme as the trustee
may reasonably require;

(b) comply with any lawful directions given by the trustee for the
purposes of satisfying paragraph (a);

(c) prepare and make available on a timely basis, any additional

information as may be required from time to time by the
Authority, auditor, any property manager or project manager
certifier or the trustee;

(d) grant the trustee and any auditor access to the books of
accounts and records of the REIT manager, the trust or the
scheme or the fund, and

(e) ensure that the trustee is provided, on a timely basis, with the
necessary information to ensure that the continuing disclosure
obligations under these Regulations are complied with.

61. Removal and replacement of a REIT manager.

(1) The Authority shall, in all circumstances other than where the
removal is ordered by the Court, approve any removal and replacement
of a REIT manager including the appointment of a replacement REIT
manager where the REIT manager resigns or is not reappointed by the
trustee.

66
 (2) The trustee shall convene a meeting of REIT securities holders
for purposes of approving the removal of the REIT manager and the
appointment of a replacement REIT manager where—
(a) a court of competent jurisdiction orders the liquidation of the
REIT manager for the purpose of reconstruction or
amalgamation under a scheme approved by the Authority;
(b) a manager or a receiver is appointed over any of the REIT
manager’s assets;

(c) the REIT manager ceases to be eligible for appointment under

regulation 56.

(d) the REIT manager is in repeated breach of the scheme

documents and the related laws; or
(e) the trustee is of the opinion that a change is in the interests of
the REIT securities holders or is necessary to protect the assets
of the trust.

(3) All costs and expenses of or related to the replacement of the

REIT manager pursuant to the operation of this regulation including
those of the trustee shall be the responsibility of the REIT manager.

(4) The resignation of a REIT manager shall not be effective until

a replacement has been appointed by the trustee and the appointment
approved by the Authority.

(5) Where the REIT manager is removed, resigns or is otherwise

replaced, he or she shall immediately on taking effect of the removal,
resignation or change—

(a) make available to the trustee and to any newly appointed REIT
manager, all books, records, reports, information and data
including access to software and source code which is within
the possession or control of that REIT manager relating to the
activities of the scheme or the assets of the trusts; and
67
 (b) execute such notices to tenants, assignments and novation of
contracts as may be required by the trustee.
PART IX—SPECIFIC REQUIREMENTS FOR I-REITS
62. Investments and objectives of an I-REIT.
The investments of an I-REIT real estate investment trust scheme
shall—
(a) comply with the Act and these Regulations; and
(b) be relevant, appropriate and consistent with the investment
objectives of the real estate investment trust and scheme as set
out in the Prospectus or Information Memorandum and other
scheme documents.

63. Investments in real estate related securities.

(1) A fund’s property may consist of real estate related securities
subject to the following—

(a) that the securities are traded on an approved securities

exchange in or outside Uganda;

(b) spread limits where—

(i) the value of a fund’s investments in securities issued by
any single issuer shall not exceed five percent of the
fund’s total asset value; and
(ii) the value of a fund’s investments in securities issued by
any group of companies shall not exceed ten percent of
the fund’s total asset value;

(c) concentration limits where a fund’s investments in any class of

securities shall not exceed ten percent of the securities issued
by any single issuer.

(2) The REIT manager shall ensure that the investment limits and
restrictions are complied with at all times based on the most up-to-date
value of the fund’s property.
68
 (3) The limits and restrictions in sub regulation (1) do not apply to
securities issued or guaranteed by the Government or a Central Bank.

(4) In determining compliance with the limits or restrictions, any

accrued entitlement on the securities held by the fund may be excluded
except that the entitlement should not be exercised if the exercise results
in the breach of any limit or restriction.

(5) Notwithstanding sub regulation (4) the right of convertibility

may be exercised if it results in a breach of any limit or restriction,
provided there are justifiable reasons and prior approval of the trustee
has been obtained.

(6) The REIT Manager shall take all necessary steps and actions to
rectify the breach within one month from the date of the breach.

(7) In determining compliance with the limits and restrictions, the

use of the fund’s latest total asset value shall be made as disclosed in the
latest published audited accounts of the fund and adjusted for any
subsequent transaction since the publication of such accounts.

64. Investments in foreign real estates or markets.

(1) Where a fund proposes to acquire a real estate located outside
Uganda, the REIT Manager shall ensure that such an acquisition is in the
best interests of the fund and its unit holders.

(2) The REIT Manager shall before acquiring the real estate under
sub regulation (1), take into account various factors, including—

(a) entry barriers, such as foreign ownership restrictions, foreign

exchange and remittance control, and anti-trust or competition
provisions;

(b) economic and political environment, legal, judicial and

accounting systems, and the real estate market in the foreign
country;
69
 (c) operational barriers, such as enforcement of legal rights as
landlord and transparency of accounting and financial
reporting systems;
(d) taxation matters that may affect operations of a fund investing
in the foreign country concerned;
(e) the existence of a foreign entity where applicable to whom
functions are delegated, the ability of the REIT manager to
maintain sufficient ongoing supervision of such foreign entity
and the presence of any constraint or limitation in engaging
such an entity;
(f) possible exit strategies or mechanisms for the foreign market
and termination arrangements for the fund’s foreign
investments; and
(g) practical and effective measures that will address any issue or
mitigate the risks that may arise out of the foreign investment.

(3) Notwithstanding regulation 67(1) a fund which acquires or

owns real estates located outside Uganda may participate in forward
sales or purchases in any currency of choice and its participation in the
forward contracts shall be allowed for the following purposes—
(a) hedging for a specific real estate and a specific cash flow; and
(b) risk-management purposes limited to the fund’s existing
exposure.

(4) A foreign market, for investments in real estate-related assets

and non-real estate-related assets, is an eligible market with satisfactory
provisions relating to—
(a) the regulation of the foreign market;

(b) the general carrying on of business in the market with due

regard to the interests of the public;
(c) the adequacy of market information;
70
 (d) corporate governance;

(e) the discipline of participants for conduct inconsistent with just

and equitable principles in the transaction of business, or for a
contravention of, or a failure to comply with, the rules of the
market; and

(f) the arrangements for the unimpeded transmission of income

and capital from the foreign market to the fund.

(4) Notwithstanding sub regulation (4), investments in real-estate

related assets and non-real estate-related assets are limited to foreign
markets where the regulatory authority is a member of the International
Organisation of Securities Commissions (IOSCO).

65. Eligible investments for I-REIT and income requirements.

(1) The trustee of an I-REIT may, provided that the shares or REIT
securities are listed on an approved securities exchange and subject to
any limitations which may be included in the scheme documents and if
requested by the REIT manager, invest—

(a) directly in eligible real estate, except where it is prohibited by

the Act or these Regulations;

(b) in eligible real estate assets;

(c) in cash, deposits, bonds, securities and money market

instruments;

(d) in a wholly beneficially owned and controlled subsidiary

which conducts real estate related activities; and

(e) in other income producing assets including shares in property

companies incorporated in Uganda or elsewhere whose
principal business is real estate related or REIT securities in
other Ugandan I-REITS.

71
 (2) The requirements to be the sole trustee, shall not be applicable
where a secondary disposition trustee is appointed.
(3) The trustee and the REIT manager shall only invest in
accordance with the Act.
(4) The promoter of an I-REIT and the REIT manager shall
nominate in the Prospectus or Information Memorandum at least one
real estate asset that is already vested or it is proposed will be acquired
and vested in the trust and for which all legal registration requirements
will have been completed within one hundred and eighty days of the
closing of the initial offer.

(5) In order to enable the trustee and the REIT manager to meet
their obligations under regulation 67—
(a) in the event that the requirements of sub regulation (4) have
not been complied with during the intervening period from the
close of the initial offer or issue referred to in sub regulation
(4); and

(b) until the vesting of the nominated real estate asset in the trust
and the completion of all registration requirements has been
done, the funds raised by the initial offer and issue of REIT
securities shall only be invested in bank deposits or other
liquid investments with a duration not exceeding one hundred
and eighty days.
(5) An I-REIT shall have invested, within two years of the date of its
authorisation as a real estate investment trust scheme, at least seventy-five
percent of the total net asset value in income producing real estate.

(7) A fund’s investment in non-real estate related assets and or cash

deposits and money market instruments shall not exceed twenty-five
percent of a fund’s total asset value.

(8) The trustee and the REIT manager shall, in fulfilling the
requirements under sub regulation (6), ensure that the real estate
acquired or to be acquired as an asset of the I-REIT is—
72
 (a) tenanted on a commercial basis to commercial rent paying
tenants;
(b) has good prospects for future net rental income and is
competitively located as evidenced by market studies;
(c) is competitive and located within good catchment areas as
evidenced by market studies;
(d) is free from encumbrances at the time of acquisition except for
any charges entered into by the trustee as authorised by the
trust deed, the Act and these Regulations; and
(e) in a good state of repair or if requiring redevelopment or
capital expenditure, this has been factored into the purchase
price as reflected in the—

(i) valuation obtained prior to the acquisition;

(ii) the budget prepared by the REIT manager; and

(iii) disclosures in the report of the structural engineer

obtained on the condition of the real estate to be acquired.

(9) Notwithstanding sub regulation (8), an I-REIT may acquire a

real estate which is not fully tenanted at the time of acquisition provided
that—

(a) the REIT manager reasonably believes that there is good

potential to secure tenants within a reasonable period of time
at a commercial rate;

(b) any capital expenditure required to be incurred to enhance the

real estate and secure tenants would not materially affect the
level of distributions or the yield to REIT unit holders;

(c) the REIT manager has provided certification of under

paragraphs (a) and (b) to the trustee prior to the acquisition;
and
73
 (d) the acquisition will yield a reasonable return within a
reasonable period of time.
(10) A REIT manager shall ensure that—
(a) an acquisition of a real estate includes the ownership of all
rights, interests, and benefits related to the ownership of real
estate; and

(b) the fund has majority ownership and control in the real estate
acquired to enable the fund to exercise all rights and interests
over the real estate without hindrance.
(11) Notwithstanding sub regulation (9), a fund may acquire real
estate where it does not have majority ownership and control provided
that—
(a) the total value of the real estates does not exceed twenty-five
percent of the fund’s total asset value after acquisition;
(b) the acquisition of the real estates is in the best interest of the
unit holders;
(c) the fund has legal title and beneficial interest in these real
estates; and
(d) there are clear disclosures in the fund’s offer document or
notification to unit holders of risks associated with holding
real estates with no majority control.

(12) For leasehold real estates, a REIT manager shall ensure that -

(a) the consent of the relevant authority to transfer the lease has
been obtained before the fund’s Prospectus is registered with
the Authority or where it is an excluded offer, the information
Memorandum is deposited with the Authority or prior to the
acquisition of the leasehold property in case of an existing
fund; and

(b) the lease is registered.

74
 (13) For real estates under construction, a fund may enter into an
arrangement or agreement at any stage during the construction phase to
acquire the real estate, provided the following terms are met—
(a) income from real estates within the fund’s investment
portfolio is sufficient to ensure that there is no substantial
dilution to the fund’s earnings per unit during the construction
period;

(b) the purchase agreement is made subject to the completion of

the building with sufficient cover for construction risks;

(c) the construction of the real estate is carried out on terms which
are the best available for the fund and at an arm’s length
transaction between independent parties;

(d) the prospects for the real estate to be acquired upon its
completion is reasonably expected to be favourable; and

(e) the total value of real estates under construction acquired by

the fund does not exceed ten percent of the fund’s total asset
value after the acquisition.

(14) For real estates located outside Uganda, the REIT manager
shall ensure that the relevant rules, guidelines and laws are complied
with and that approvals and authorisations from the relevant authorities,
foreign or domestic have been obtained prior to the acquisition.

(15) All real estates acquired by a fund shall be insured to the full
replacement value, including loss of rental, where appropriate, with
insurance companies approved by the trustee.

(16) The trustee and the REIT manager shall, where the real estate
acquired is leasehold, ensure that—
(a) at the time of entering into the lease, the lease has a remaining
term of at least 15 years however the term may be revised by
the Authority;
75
 (b) prior to entering into the lease, a certificate by a structural
engineer has been obtained in respect of the real estate;
(c) the real estate has been valued as a leasehold;
(d) the lease is registered and a certificate of title is issued; and
(e) the planning approval for the developments on the eligible real
estate shall be provided by the relevant authorities.
(17) Where a real estate asset is disposed by the trustee of an I-
REIT or a new issue of REIT securities has been made, there shall be no
breach of obligations under sub regulation (6) if within a period of one
year from the completion of the disposition or from the issue of REIT
securities, the trustee on behalf of the I-REIT at the request of the REIT
manager either acquires additional or substitute real estate assets or
makes an additional distribution to REIT securities holders so as to
reduce its total assets.
(18) The trustee of an I-REIT and the REIT manager shall ensure
that investments in cash, deposits, bonds and money market instruments
are spread across a number of issuers, securities and instruments to
ensure that not more than five percent of the total asset value is exposed
to any issuer or institution or to members of the same group provided
that—
(a) this restriction shall not apply to deposits, bonds or securities
issued by or guaranteed by the Government of Uganda or to
deposits with a financial institution licenced in Uganda; and
(b) the requirements of this paragraph shall not be breached where
a limit is exceeded but rectified within a period of one month
from the day on which the limit was exceeded.

(19) Subject to the terms of the trust deed and where not
specifically authorised by the trust deed with the consent of the REIT
securities holders, the REIT manager may request the trustee of an I-
REIT to invest up to a maximum of ten percent of the total asset value
in a wholly owned and controlled company of the REIT manager
carrying out real estate related activities which may include—
76
 (a) property management;

(b) REIT management;

(c) property maintenance or design or the provision of services to

tenants or to the I-REIT, but shall not include the provision of
mortgages or finance.

(20) For the purpose of determining the level of the investment that
can be made under this regulation, the percentage shall be calculated by
reference to the amount of the proposed investment and the total asset
value at the date on which the investment is made.

66. Consequences of failure to invest in real estate within one

hundred and eighty days.
(1) Where an investment in real estate has not been completed in
accordance with the requirements of these Regulations within one
hundred and eighty days, the trustee shall within fourteen days after the
expiry of the period for investment refund in full all monies paid into the
fund by investors in REIT securities together with any interest or
earnings on the amount subscribed and without making any deductions
other than the withholding of any amounts required by law in respect of
interest or other income.

(2) Failure to complete the nominated investment in real estate shall

not constitute an offence but failure to refund monies within the
specified period shall constitute an offence on the part of the promoter,
the trustee and the REIT manager.

67. Acquisition and disposal of real estate and price.

(1) The trustee of an I-REIT shall not—

(a) acquire a real estate at a price which exceeds the price in the
valuation report by more than ten percent unless the
acquisition is approved by a special resolution of the REIT
securities holders; or

77
 (b) dispose of a real estate at a price lower than ninety percent of
the value assessed in the valuation report unless the disposal is
approved by a special resolution of the REIT securities
holders.
(2) Where the disposal of an asset would exceed fifty percent of the
total asset value, the disposal shall be sanctioned by an ordinary
resolution of REIT securities holders prior to the trustee entering into a
binding contract for disposal except where a disposal is for the purpose
of terminating or winding up an I-REIT.
(3) A REIT manager shall not recommend and a trustee of an I-
REIT shall not enter into a binding contract which can only be
terminated on the payment of penalties in connection with a transaction
to which sub regulation (1) applies, unless approval from where has been
obtained.

68. Investments in single purpose companies.

(1) In acquiring a single-purpose company that owns a real estate,
a REIT manager shall ensure that—

(a) the acquisition is in the best interests of unit holders;

(b) there are valid commercial reasons for acquiring the company
instead of the real estate;
(c) the real estates owned by the single-purpose company
complies with regulation 65(8) -(13);
(d) where the circumstances under paragraph (c) are not possible,
the fund shall wholly acquire equities of the single-purpose
company that will ensure it has majority ownership and
control of the company to enable it to exercise an effective
control over the company and to exercise all rights and
interests over the real estate without hindrance;
(e) the fund shall not assume any liability of the single-purpose
company it is acquiring, except for the commitments under
regulation 65; and
78
 (f) the value of the single-purpose company is backed by the
value of the real estate.

(2) In disposing of investments in a single-purpose company, the

REIT manager shall ensure that regulation 67(2) is complied with.

69. Partial ownership of properties.

(1) Interests in a real estate acquired as an asset by the trustee of an
I-REIT including where the investment by the REIT is held through its
investment in investee companies or investee trusts shall—

(a) not consist of partial ownership of real estate assets;

(b) in the case of a real estate which is on a freehold land, from the
time of acquisition, the real estate asset shall be wholly owned
and controlled by the trustee who shall exercise all rights,
interests and benefits normally enjoyed by an owner without
hindrance; and

(c) in the case of a real estate which is on a leasehold land, from

the time of entering into the lease, the trustee shall have sole
rights, interests or benefits normally enjoyed by a lessee
subject to the terms of the lease and the rights of the lessor,

unless such assets are investments through purchases of shares in

property companies or REIT securities of other I-REITS permitted under
these Regulations and which are not investee companies or investee
trusts.

(2) Total investments by an I-REIT in shares in property company

shares or REIT securities of other I-REITS which are not investee
companies or investee trusts shall not in total exceed ten percent of the
total asset value where the percentage is calculated based on the value of
the investment and the total net asset value as at the time of acquisition
of the shares or REIT securities.

79
70. I-REIT income requirement.
(1) An I-REIT shall in each financial year after the second
anniversary of its authorisation, earn at least seventy percent of its
income from rent, licence fees or access or usage rights or other income
streams of a similar nature generated by eligible investments in income
producing real estate.

(2) Any profits or capital gains from the sale of real estate shall be
excluded in calculating income as provided under sub regulation (1).

(3) An I-REIT shall not be in breach of the income requirements

under sub regulation (1) if the I-REIT has disposed of a real estate asset
and is proposing to reinvest the proceeds of the sale in the acquisition of
substitute real estate assets provided that the real estate disposed had
been an asset of the real estate investment trust for at least three years,
and the I-REIT—
(a) reinvests the funds received from disposal of the income
producing real estate assets within a period of two years from
the completion of the disposition; or
(b) makes a distribution to REIT securities holders to reduce its
assets.

71. Real estate construction and development activities by an I-

REIT.
The trustee of an I-REIT on the recommendation of the REIT manager,
subject to any limitations in its scheme documents and meeting the
requirements of these Regulations including the appointment of a project
manager certifier, may acquire a real estate under construction, vacant
land for development or enter into construction on vacant land acquired
for the purposes of development, provided—
(a) the total acquisition value of all the land on which the
construction is to be undertaken by the trust combined with the
cost of the construction on that land and the acquisition of real
estate under construction at any time does not exceed fifteen
percent of total asset value;
80
 (b) the total value at acquisition, cost of vacant land held for
development and construction by the I-REIT and the value of
real estate which is not producing a commercial income at any
time does not exceed ten percent of total asset value;

(c) vacant land acquired for the purpose of development by the I-

REIT can only be held for a maximum of three years at the
conclusion of which it must be developed and producing
commercial income or sold;

(d) income from other assets are sufficient to ensure that there
shall be no substantial dilution to the earnings of the fund per
unit during the construction or development period;

(e) the contract for any acquisition of property under construction

is subject to the completion of the building and for an agreed
fixed price;

(f) the REIT manager is reasonably believing that the prospects

for obtaining tenants for any property being constructed or
developed at a commercial rent are good; and

(g) development contracts are carried out on terms which are the
best available and at arm’s length transactions.

72. Maximum level of borrowing by an I-REIT.

(1) A trustee may, subject to any restriction or lesser limit in the
scheme documents, enter a borrowing arrangement—
(a) on the initiative of the trustee where such borrowing is
required to preserve the value of the assets of the trust and is
in the best interests of the REIT securities holders; or

(b) if requested to do so by the REIT manager to give effect to the

objectives of the scheme to acquire real estate assets or to
undertake capital expenditure or refinance an existing
borrowing.
81
 (2) The trustee may provide security over the assets of the trust to
support the monies borrowed under sub regulation (1).

(3) Notwithstanding sub regulation (1) and (2), the trustee shall
ensure that any borrowing or provision of security is not prejudicial to
the interests of the REIT securities holders.

(4) The total amount borrowed by the trustee on behalf of an I-

REIT or by any investee company or investee trust shall not exceed, in
aggregate, at the time the liability is incurred, thirty-five percent of the
total asset value provided—

(a) the limit in this regulation shall not operate to prevent the
rolling over or refinancing of any debt in the case where the
amount rolled over or refinanced is not more than the amount
originally borrowed, and

(b) the trustee may borrow on its own initiative or on the

recommendation of the REIT manager up to a maximum of
forty percent of the total asset value with the prior sanction of
REIT securities holders by way of an ordinary resolution for a
temporary purpose for a term not exceeding six months.

(5) Non-compliance with the borrowing limitation under this

regulation shall not result in a breach of the Act and these Regulations
but may result in—

(a) the I-REIT ceasing to be classified as a real estate investment

trust scheme for taxation purposes;

(b) the REIT securities holders having a cause of action against

the trustee or the REIT manager subject to the scheme
documents; and

(c) enforcement by the Authority.

82
73. Distribution requirements of an I-REIT.
(1) The REIT manager shall only recommend and the trustee may
only make distributions to REIT securities holders from realized gains,
realized income or from cash held in the fund which is surplus to the
investment requirements of the trust.
(2) A trustee of an I-REIT on the recommendation of the REIT
manager shall, subject to a higher minimum being specified in the
scheme documents and to these Regulations, distribute in each financial
year, a minimum of eighty percent, of the fund from sources other than
from realised capital gains on the disposal of real estate assets and the
distribution shall be made within four months of the end of such year.
(3) The net income after tax under sub regulation (2) shall be
calculated according to International Financial Reporting Standards and
tax standards applying in Uganda based on the assumption that, for
calculation purposes only, the REIT is subject to the general income tax
provisions applicable generally to trusts and the REIT is entitled to
similar deductions and allowances, including depreciation.
(4) The trustee shall make the distribution of income on the basis
proposed by the REIT manager after the trustee has taken into
consideration the—
(a) income for the period;
(b) total returns for the period;
(c) liabilities and financial obligations;
(d) cash flow available for distribution;

(e) need to preserve and maintain the condition of the assets of the
real estate investment trust and scheme and to provide for
asset replacement;
(f) stability and sustainability of distribution of income;
(g) investment objective of the I-REIT;
(h) stated distribution policy of the I-REIT; and
(i) requirements of the scheme documents.
83
 (5) The trustee may—

(a) where the distribution is proposed other than on an annual

basis based on audited financial accounts, require an audit to
be undertaken for the purpose of assisting in its consideration
under sub regulation (4) or (8); and

(b) if the trustee is of the opinion that the level of distribution

recommended by the REIT manager is not in the interests of
REIT securities holders, call a meeting of REIT securities
holders for the purposes of approving, by an ordinary
resolution, a lower but not a higher distribution.

(6) The REIT manager shall, where the REIT manager does not
recommend a distribution of at least the eighty percent, provide the
trustee with a statement of the reasons for proposing a lower distribution
and when that minimum distribution level of eighty percent is likely to
be restored.

(7) Where there is a failure to make distribution as a consequence

of the REIT manager not proposing or REIT securities holders not
voting to receive a distribution which is below the minimum eighty
percent level, the failure to make a distribution shall not result in a
breach of the Act and these Regulations but may result in—
(a) the I-REIT ceasing to be classified as a real estate investment
trust scheme for taxation purposes;

(b) the REIT securities holders having a cause of action against

the trustee or the REIT manager subject to the scheme
documents; and

(c) revocation of authorisation by the Authority.

(8) The REIT manager may propose and the trustee may pay a
distribution in excess of the current income where the REIT manager,
after consultation with the trustee, certifies on reasonable grounds that—
84
 (a) immediately after making such distribution, the I-REIT shall
still be able to pay, from the assets of the fund, the liabilities
incurred on behalf of the trust as and when they fall due and
the projected liabilities for at least the next year; and

(b) the payment will not adversely impact on the capacity to

maintain and preserve the assets.

(9) The REIT manager shall—

(a) disclose to the trustee, the basis of calculation of the

distribution of income proposed under sub regulation (8); and

(b) report any such proposal as part of the continuing disclosure

obligations.

(10) Nothing in these Regulations shall prevent distributions being

proposed or made, or the trust deed providing for distributions to be
made at intervals more frequently than annually.

74. Distribution of realised capital gains by an I-REIT.

(1) Subject to any provision in the scheme documents, a trustee or
the REIT manager may distribute realised capital gains.

(2) Any realised capital gains may be retained and invested in

income producing real estate provided that any realised capital gains
which have not been invested within a period of two years from the date
of realisation shall be distributed to REIT securities holders within two
months of the second anniversary of the realisation.

(3) Failure to make the minimum distribution specified in sub

regulation (2) shall not result in a breach of the Act or these Regulations
but may result in—

(a) the I-REIT ceasing to be classified as a real estate investment

trust scheme for taxation purposes;

85
 (b) subject to the scheme documents, may result in the REIT
securities holders having a cause of action against the trustee
or the REIT manager; and

(c) revocation of authorisation by the Authority.

75. Minimum retained investment by the promoter and lock-in

period.
(1) A promoter of an I-REIT who sells or transfers any real estate
or proposes to transfer or sell real estate to the trustee of the I-REIT
within a period of one year of the establishment of the I-REIT, shall
maintain an investment in the I-REIT of at least thirty percent of the net
asset value as at the date of the initial offer of REIT securities in the I-
REIT for the first year from the latter of the close of the offer or, if the
issue is to be listed, from the date of the first listing of the REIT
securities and the date of transfer of the real estate to the I-REIT.

(2) Where a D-REIT converts to an I-REIT, the restrictions in sub

regulation (1) shall not apply where the requirements of regulation 84
have been or are being complied with.

(3) The REIT securities held by the promoter shall not be sold or
transferred during the lock in period except if the transfer is as a
consequence of the death or insolvency of the promoter.

(4) The promoter may, after the—

(a) first year of the close or listing, reduce its holding to a

minimum of ten percent; and
(b) second anniversary of the close or listing, reduce its holdings
to zero percent.

(4) The trustee shall not register any transfer from the promoter, if
the transfer will result in the holding of REIT securities by the promoter
in any period being below the minimum level which the promoter is
required to retain in the relevant period.
86
 (5). Where a fund fails to comply with regulation 65 (6) as a result
of disposals, divestments or issuance of new units, the REIT manager
shall, within a period of not more than twelve months from the date of
the breach, take all necessary steps and actions to rectify the breach.

(6) Notwithstanding regulation 65(7) a five percent allowance in

excess of any limit or restriction imposed under these Regulations is
permitted where the limit or restriction is breached through an
appreciation or depreciation of the fund’s total asset value which is as a
result of an appreciation or depreciation in the value of the fund’s asset
or as a result of a repurchase of units in the case of unlisted funds or
payments made out of the fund.

(7) A REIT Manager shall not make any further investments to

which the relevant limit is breached and the REIT manager shall, within
a reasonable period of not more than three months from the date of the
breach take all necessary steps and actions to rectify the breach.

(8) A REIT manager shall notify the Authority of any breach of

investment limits provided under these Regulations and the reasons for
the breach.

PART XI—SPECIFIC REQUIREMENTS FOR D-REITS

76. Investments and objectives of a D-REIT.

The investments of a D-REIT scheme shall—
(a) comply with the provisions of the Act and these Regulations;
and
(b) be relevant, appropriate and consistent with the investment
objectives of the real estate investment trust and scheme as set
out in the Information Memorandum and the scheme
documents.

77. Eligible investments for a D-REIT.

(1) A trustee of a D-REIT may, subject to any limitations in the
scheme documents, if requested by the REIT manager invest—
87
(a) directly in eligible real estate, except where it is prohibited by
the Act or these Regulations;

(b) in eligible real estate assets through investment in an investee

company incorporated or registered in Uganda which directly
owns the eligible real estate and which is wholly beneficially
owned and controlled by the trustee in its capacity as the
trustee of the D-REIT where—

(i) the D-REIT trustee has without restriction, the absolute

power at any time to decide and without penalty or the
payment of compensation, to remove the directors;

(ii) a shareholders’ agreement has been entered into between

the trustee of the REIT, the company, the directors and
the shareholders;

(iii) the REIT manager of the D-REIT is appointed as the

manager of the investments of the investee company;

(iv) the Memorandum and Articles of Association of the

investee company and the terms of the shareholders’
agreement limit the objectives of the investee company
and the company’s and directors’ powers and impose the
same obligations on the company, its directors and the
manager of the trust as if the investee company was a D-
REIT and an authorised scheme and were subject to the
same obligations and restrictions as are imposed under
the Act and these Regulations;
(v) the valuation, reporting and audit provisions of the Act
and these Regulations apply to the investee company as if
the investee company was a D-REIT and an authorised
scheme;

(vi) the investee company invests directly in the eligible real

estate and is recorded on the certificate of title or register
as the sole owner;
88
(c) in eligible real estate assets through an investee trust in which
the trustee of the D-REIT in its trustee capacity is the sole
beneficiary and has absolute control of voting and right to
appoint and remove the trustee of the investee trust and
where—
(i) the investee trust is formed under the laws of Uganda as
an unincorporated common law trust;
(ii) the D-REIT trustee is also the trustee of the investee trust;
(iii) the REIT manager of the D-REIT is also the manager of
the investee trust;
(iv) the terms of the trust deed for the investee trust limit the
objectives of the investee trust, the trustee’s powers and
impose the same obligations on the trustee and the
manager of the trust as if the investee trust was a D-REIT
and an authorised scheme and is subject to the same
obligations and restrictions as are imposed under the Act
or these Regulations;
(v) the valuation, reporting and audit provisions of the Act
and these Regulations apply to the investee trust as if the
investee trust was a D-REIT and an authorised scheme;
(vi) the trustee as trustee for the investee trust invests directly
in the eligible real estate and is recorded on the certificate
of title or register as the sole owner;
(d) in cash, deposits, bonds or securities and money market
instruments;

(e) in a wholly beneficially owned and controlled company which

conducts real estate related activities; and

(f) in income producing assets including shares in property

companies incorporated or registered in Uganda whose
principal business is real estate related or REIT securities in
other Ugandan real estate investment trust schemes.
89
 (2) The requirement to be the sole trustee shall not be applicable
where a secondary disposition trustee is appointed.

(3) The trustee and the REIT manager shall only invest in
accordance with the Act and these Regulations.

(4) The promoter of a D-REIT and the REIT manager shall—

(a) nominate in the Information Memorandum at least one real

estate asset that is already vested or is proposed to be acquired
and vested and for which all legal registration requirements
will have been completed within one hundred and eighty days
of the closing of the initial offer.

(b) in order to enable the trustee and the REIT manager to meet
their obligations under this regulation, in the event that the
requirements of paragraph (a) have not been complied with
during the intervening period from the close of the initial offer
or issue referred to in paragraph (a) and until the vesting of the
nominated real estate asset in the trust and the completion of
all registration requirements are complete, the funds raised by
the initial offer and issue of REIT securities shall only be
invested in bank deposits or other liquid investments with a
duration not exceeding one hundred and eighty days.

(c) include the Information Memorandum, the initial development

or construction project which the D-REIT proposes to
undertake; and
(d) include a timetable, budget and a project plan for the initial
development or construction the D-REIT proposes to
undertake.

(5) A D-REIT shall, within one year of the date of its authorisation
invest at least thirty percent of the total asset value directly in—

(a) development and construction projects; or

90
 (b) income producing real estate which the D-REIT has developed
or constructed.

(6) A D-REIT shall not be in breach of sub regulation (5), if the D-

REIT disposes the real estate asset and within one year of such
disposition, the D-REIT—
(a) acquires a substitute real estate asset; or
(b) makes an additional distribution to REIT securities holders so
as to reduce its assets.

(7) The trustee and the REIT manager shall, for the purposes of
giving effect to the requirement for investment predominantly in
development and construction projects for either sale, retention or
leasing as income producing property, ensure that the real estate
acquired or to be acquired as an asset of the D-REIT—
(a) is able to be developed in the manner and for the proposed use;

(b) is free from encumbrances at the time of acquisition except for

any charges entered into by the trustee as authorised by the
trust deed, the Act and these Regulations; and

(c) has reasonable prospects when development or construction is

completed for sale for a profit or for leasing as income
producing real estate.

(8) The trustee and the REIT manager shall, where any real estate
acquired is leasehold, ensure that—

(a) at the time of entering into the lease, the lease has a remaining
term of at least five years which term may be revised by the
Authority in its discretion;

(b) the real estate has been valued as leasehold;

(c) the lease is registered and a certificate of title is issued; and

91
 (d) the planning approval for the developments on the eligible real
estate is provided by the relevant authorities.

(9) The trustee and the REIT manager shall ensure that investments
in cash, deposits, bonds, securities and money market instruments are
spread across a number of issuers, securities and instruments so that not
more than five percent of the total asset value is exposed to any one
issuer or institution or to members of the same group provided that—
(a) this restriction shall not apply to deposits, bonds or securities
issued by or guaranteed by the Government of Uganda or to
deposits with a financial institution licenced in Uganda; and

(b) the requirements of this regulation are not contravened where

a limit is exceeded but rectified within one month from the day
on which the limit was exceeded.

(10) Subject to the terms of the trust deed and with the consent of
the REIT securities holders, the REIT manager may request that the
trustee of a D-REIT invests up to a maximum of ten percent of the total
asset value in a wholly owned and controlled company carrying out real
estate related activities which may include—

(a) property management;

(b) REIT management;
(c) property maintenance or design; or
(d) the provision of services to tenants or to the D-REIT,
but shall not include the provision of mortgages or finance except to the
extent that the D-REIT is authorised by these Regulations to provide
mortgages or finance.

(11) For the purposes of determining the level of the investment

which can be made under this regulation, the percentage shall be
calculated by reference to the amount of the proposed investment and the
value of the total asset value at the date that the investment is made.
92
78. Consequences of failure to invest in real estate within one
hundred and eighty days.
(1) Where an investment in real estate has not been completed in
accordance with these Regulations within one hundred and eighty
days—

(a) the trustee shall within twenty-eight days of the expiry of the
period for investment call a meeting of the REIT securities
holders;

(b) the purpose of that meeting in paragraph (a) shall be—

(i) to consider the report by the REIT manager on the reason

for the delay in completion;

(ii) to consider the implications for the holders of investment

in the D-REIT;

(iii) to decide by special resolution whether—

(A) the period for registration should be extended and

the period of extension;

(B) all monies paid into the fund together with any
interest or earnings should be refunded within
fourteen days of the date of the meeting; or

(C) any other action should be taken by the trustee or

REIT manager.

(2) The failure to complete a nominated investment in real estate

shall not constitute an offence but failure to call the required meeting or
to refund monies within the specified period shall constitute an offence
on the part of the promoter, the trustee and the REIT manager.

79. Acquisition and disposal of a real estate and price.

(1) A D-REIT shall not—
93
 (a) acquire real estate at a price which exceeds the price in the
valuation report by more than ten percent unless the
acquisition is approved by REIT securities holders; or
(b) dispose of real estate at a price lower than ninety percent of the
value assessed in the valuation report unless the disposal is
approved by REIT securities holders.
(2) Except where a disposal is for the purposes of terminating or
winding up of a D-REIT, where the disposal of an asset will exceed fifty
percent of the total asset value, the disposal shall be sanctioned by an
ordinary resolution of REIT securities holders, prior to the trustee
entering into a binding contract for disposal.
(3) A REIT manager shall not recommend and a trustee of a D-
REIT shall not enter into a binding contract which can only be
terminated on the payment of penalties in connection with a transaction
to which sub regulation (1) applies, unless approval of whom has been
obtained.

(4) Any contract entered into under sub regulation (3) shall be
based on a valuation report.

80. Partial ownership of real estate.

(1) Interests in real estate acquired as assets of a D-REIT shall—
(a) not constitute partial ownership of real estate assets;
(b) in the case of a real estate which is on freehold land, from the
time of acquisition, the real estate shall be wholly owned and
controlled by the trustee who shall exercise all rights, interests
and benefits normally enjoyed by an owner without hindrance;
and
(c) in the case of a real estate which is on leasehold land, from the
time of the commencement of the lease entered into by the
trustee on behalf of the scheme, the trustee shall have sole
rights, interests or benefits normally enjoyed by a lessee
subject to the terms of the lease and the rights of the lessor,
94
unless such assets are investments through purchases of shares in
property companies or REIT securities permitted under these
Regulations and which are not investee companies or investee trusts.
(2) The limitation on partial ownership of real estate shall not apply
to a D-REIT in the case of real estate which the D-REIT—
(a) has developed and constructed and sold part of the interest in
the completed project to another person; or
(b) has partial ownership—
(i) as a consequence of the D-REIT entering into a terms or
instalment sale or other transaction of a similar nature, or
(ii) where in connection with an acquisition or sale, sub-
division of the real estate is in progress.

(3) Total investments by a D-REIT in property company shares or

REIT securities which are not in investee companies or investee trusts
shall not, in total, exceed ten percent of the total asset value where the
percentage is calculated based on the value of the investment and the
total net asset value at the time of acquisition of the shares or REIT
securities.

81. Construction and development activities by a D-REIT.

(1) A trustee of a D-REIT may, subject to any limitations in the
scheme documents, and on the recommendation of the REIT manager
acquire—

(a) vacant land for development;

(b) real estate under construction; or

(c) land for redevelopment.

(2) A trustee of a D-REIT may also subject to any limitations in the

scheme documents, and on the recommendation of the REIT manager
enter into contracts for or conduct development and construction.
95
82. Maximum levels of borrowings by a D-REIT.
(1) A trustee of a D-REIT may, subject to any restriction or lesser
limit in the scheme documentation, borrow or enter into financing
arrangements—
(a) on its own initiative where such borrowing is required to
preserve the value of the assets of the trust and is in the best
interests of the REIT securities holders; or
(b) if requested to do so by the REIT manager so as to give effect
to the objectives of the scheme to acquire real estate assets, to
undertake development and construction, to undertake capital
expenditure or to refinance any existing borrowing.
(2) The trustee may provide security over the assets of the real
estate investment trust and scheme to support borrowings under sub
regulation (1).

(3) Borrowings entered into by the trustee on behalf of a D-REIT or

by any investee company or investee trust shall not exceed, in aggregate,
at the time the liability is incurred, sixty percent of the total asset value
provided that—
(a) the limit shall not operate to prevent the rolling over or
refinancing any debt provided that the amount rolled over or
refinanced is not more than the amount originally borrowed;
and
(b) the trustee cannot borrow or enter a financing agreement
exceeding fifty percent of the total asset value, without the
prior sanction of REIT securities holders by way of an
ordinary resolution for a temporary purpose for a term not
exceeding six months.
(4) Any non-compliance with the borrowing limitation under this
regulation shall not result in a breach of the Act or these Regulations
but—
(a) may result in the D-REIT ceasing to be classified as a real
estate investment trust scheme for taxation purposes;
96
 (b) subject to the scheme documents, may result in the REIT
securities holders having a cause of action against the trustee
or the REIT manager; or

(c) revocation of the authorisation by the Authority.

83. Distribution requirements of a D- REIT.

(1) Distributions shall be recommended by the REIT manager and
made by the trustee as provided for in the scheme documents.

(2) The trustee shall make the distribution of income on the basis as
provided for in the scheme documents and proposed by the REIT
manager after the trustee has taken into consideration the—

(a) income for the period;

(b) total returns for the period;

(c) liabilities and financial obligations;

(d) cash flow available for distribution;

(e) need to preserve and maintain the condition of the assets of the
fund and to provide for asset replacement;

(f) stability and sustainability of distribution of income;

(g) investment objective of the D-REIT;

(h) stated distribution policy of the D-REIT, and

(i) requirements of the scheme documents.

(3) The trustee may—

(a) where the distribution is proposed other than on an annual

basis based on audited financial accounts require an audit to be
undertaken for the purpose of assisting in its consideration
under this subregulation or regulation (4); and
97
 (b) if the trustee believes that the level of distribution
recommended by the REIT manager is not in the interests of
REIT securities holders call a meeting of REIT securities
holders to approve, by ordinary resolution, a lower but not a
higher distribution.

(4) A REIT manager may propose and the trustee may pay
distributions in excess of the current income where the REIT manager,
after consultation with the trustee, certifies on reasonable grounds that-

(a) immediately after the making of such distribution the D-REIT

shall still be able to pay from the assets of the fund, the
liabilities incurred on behalf of the trust as and when they fall
due and the projected liabilities for at least the next year; and

(b) the payment shall not adversely impact on the capacity to

maintain and preserve the assets of the REIT.

(5) The REIT manager shall, where the REIT manager proposes
payment of distributions in excess of the current income—

(a) disclose to the trustee the basis of calculation of the

distribution proposed under sub regulation (4); and

(b) report any such proposal as part of the continuing disclosure

obligations.

84. Distribution of realised capital gains by a D- REIT.

(1) Subject to the scheme documents, the REIT manager may,
recommend to the trustee to distribute any realised capital gains.

(2) Any capital gains may be retained and invested in new

acquisitions or development and construction or buy to rent housing
income producing real estate provided any realised capital gains which
have not been invested within a period of two years from the date of
realisation shall be distributed to REIT securities holders within two
months of the second year after authorisation.
98
 (3) Failure to make the required distribution under sub regulation
(2) may result in—

(a) the D-REIT ceasing to be classified as a real estate investment

trust scheme for taxation purposes;
(b) subject to the scheme documents, the REIT securities holders
having a cause of action against the trustee or the REIT
manager; or
(c) revocation of the authorisation by the Authority.

85. Minimum retained investment by the promoter and lock-in

period.
(1) A promoter who sells or transfers any real estate or proposes to
transfer or sell any real estate to the trustee of the D-REIT within a
period of one year of the establishment of the D-REIT shall, subject to
any requirements in the scheme documents requiring a higher level of
investment, maintain an investment, of at least ten percent of the net
asset value for two years from the close of initial the offer or if the issue
is to be listed from the date of first listing of the REIT securities.

(2) The REIT securities held by the promoter shall not be sold or
transferred during the lock in period except if the transfer is as a
consequence of the death or insolvency of the promoter.

(3) A promoter may, after the second anniversary of the close of the
initial offer or issue, reduce its holding to zero percent.

(4) The trustee shall not register any transfer from the promoter if
the transfer results in the promoter holding REIT securities which are
below the minimum level the promoter is required to retain at any time.

PART XII—CONVERSIONS OF REITS

86. Requirements for conversion from a D-REIT to an I-REIT.

(1) A REIT manager of a D-REIT may apply to the Authority to
convert to an I-REIT where—
99
 (a) the conversion has been approved by the trustee and by a
special resolution passed at a meeting of REIT securities
holders held not more than six months prior to the proposed
conversion date;

(b) the scheme documents are amended to comply with the

requirements of an I-REIT;

(c) a conversion Prospectus or Information Memorandum, which

meets the requirements for an I-REIT, is filed with and
approved by the Authority and distributed to existing REIT
securities holders prior to the holding of the meeting of REIT
securities holders to consider the resolution to approve the
conversion;

(d) the D-REIT demonstrates to the Authority that it shall, upon

conversion, be able to meet the eligible asset requirements for
an I-REIT; and

(e) the D-REIT is able to establish that at least fifty percent of the
total value of the real estate assets of the fund—

(i) are subject of long-term leases; or

(ii) where the nature of the real estate asset is such that long
term leases are not the norm, the real estate assets have
been income producing for at least six months.

(2) Regulation 18 shall apply to the application for conversion as if

the application was for an authorisation as an I-REIT.

PART XIII—ADVERTISING

87. Advertising.
(1) The REIT manager shall not issue or cause to be issued any
advertisement for or in connection with the scheme unless the contents
of the advertisement have been approved by the trustee and the
Authority.
100
 (2) For the purposes of sub regulation (1), “advertisement” does not
include any publication of the issue, sale, repurchase or redemption
prices of REIT securities.

(3) Any advertisement in respect of a real estate investment trust

scheme shall set out a summary of the rights of the REIT securities
holder as provided for in the scheme documents including a warning
statement that—

(a) the price and value of REIT securities and the income from
REIT securities, may fluctuate;

(b) the REIT securities holder in a restricted offer REIT may have
limited, or no rights to redemption and in certain
circumstances the right of a REIT securities holder to redeem
the REIT securities may be suspended; and

(c) if the REIT securities are those of an unrestricted offer I-REIT

a statement that the holder is not entitled to require the trustee
to compulsory redeem their REIT securities and their exit
would in ordinary circumstances be through sale on an
exchange at a price determined by the market which may not
reflect the net asset value per unit.

(4) A warning statement under sub regulation (3) shall be printed in

the same font size as the rest of the text in the advertisement.

88. Inclusion of performance data.

(1) The Authority may require a justification of the calculation, if
performance data or estimated yield is quoted in—

(a) any report;

(b) an advertisement; or

(c) any other invitation to the public to invest in a real estate

investment trust scheme.
101
 (2) A forecast of the performance of the real estate investment trust
scheme shall not be included in any advertisement or in any Prospectus
or Information Memorandum.

(3) For the purposes of this Regulation, a publication of a

prospective yield does not constitute a forecast of performance.

PART XIV—ALTERATION OF SCHEME DOCUMENTS

89. Alterations to REITs documentation.

(1) Subject to sub regulation (2), a person shall not alter the scheme
documents of a scheme except—

(a) by a special resolution of REIT securities holders; and

(b) subject to the prior approval of the Authority.

(2) The REIT manager and the trustee may alter the scheme
documents without consulting the REIT securities holders provided the
trustee certifies, in writing, in respect of each proposed alteration that in
the opinion of the trustee, the proposed alteration—

(a) is necessary to enable compliance with fiscal or other statutory

or official requirements; or

(b) does not materially prejudice the interests of the REIT

securities holders;

(c) does not, to any material extent, release the trustee, REIT
manager or any other person from any liability to REIT
securities holders;

(d) does not increase the costs and charges payable from the assets
of the real estate investment trust; or

(e) is necessary to correct a manifest error.

102
PART XV—FEES AND TERMS OF THE TRUSTEE, THE REIT MANAGER AND
OTHER PARTIES

90. Remuneration of the trustee.

(1) A trustee shall be remunerated by an annual fee charged to the
fund which may be paid in instalments during the course of the year.

(2) The trustee shall be entitled to first priority for the payment of
the fees and expenses out of the fund.

(3) The scheme documents shall provide for the payment of fees as
long as such provisions are not in conflict with the Act or these
Regulations.

91. Remuneration of a REIT manager.

A REIT manager may be remunerated—

(a) by way of an annual fee charged to the fund;

(b) through an issue of REIT securities in the REIT;

(c) by way of a profit share from—

(i) the sale of the real estate in the case of a D-REIT;

(ii) increase in net earnings of the REIT or achievement of

earnings above a minimum specified hurdle rate;

(iii) the realisation of value on the conversion to an I-REIT or

listing; or

(iv) by a combination of paragraphs (i) –(iii).

92. Deferment of fees payable to a REIT manager.

A REIT manager may, at its option, agree to defer some or all the fees
payable to it, provided—

(a) the fees are deferred at the rate otherwise payable;

103
 (b) no interest is payable in respect of any deferred payment and
the impact or potential impact of such deferral on returns,
distributions and performance of the scheme shall be clearly
disclosed in any Prospectus or Information Memorandum and
in the reports prepared under regulation 101; and

(c) in the case of an unrestricted offer I-REIT, the deferral is not

for more than three years.

93. Basis for remuneration of trustee and REIT manager.

(1) A basis of calculation of fees and the fees applicable from time
to time shall be specified in—
(a) the scheme documents; and

(b) the reports prepared from time to time.

(2) The fees payable to the REIT manager and the trustee shall,
notwithstanding the provisions in the scheme documents, be fair and
reasonable based on the—

(a) roles, duties and responsibilities of the REIT manager or the

trustee;

(b) interests of the REIT securities holders;

(c) nature of the real estate investment trust;

(d) extent of the services provided;

(e) size and composition of the assets of the fund;

(f) success, in the case of a REIT manager, in meeting the

investment objectives; and

(g) need to protect, in the case of a trustee, the interests of REIT

securities holders.
104
 (3) Where the trustee is of the opinion that any proposed material
increase in fees or change in the method of calculation of the fees
charged by the REIT manager is not fair and reasonable the trustee shall
convene a meeting of the REIT securities holders.

(4) The trustee shall, at a meeting convened under sub regulation

(3), require the REIT manager to justify any increase in fee charged by
the REIT manager or the basis of calculation.

(5) The REIT manager shall not, where the trustee calls a meeting
under sub regulation (3), effect an increase or change the basis of
calculation unless agreed to by an ordinary resolution of the REIT
securities holders.

(6) The approved fee shall be disclosed in a supplemental

Prospectus and approved by the Authority.

(7) Notwithstanding any provision in the scheme documents, a

REIT manager that is removed or dismissed for any reasonably cause
shall not be entitled to—

(a) any additional fee other than that payable on an annual or

accrued basis up until the time of the removal or dismissal; or

(b) claim any penalty in respect of the dismissal, removal or

ceasing to act.

94. Term of the REIT manager of an I-REIT and prohibition on

penalties.
(1) A person appointed as a REIT manager of an I-REIT may serve
for a maximum term of three years but is eligible for reappointment for
subsequent terms each, not exceeding three years.

(2) Any appointment or reappointment under sub regulation (1)

shall be subject to approval by an ordinary resolution of REIT securities
holders.

105
 (3) The REIT manager shall not be paid additional fees or penalty
as a consequence of the REIT manager not being reappointed.

(4) For the purposes of sub regulation (3), any fee which is
payable—

(a) only on the cessation of a person being the REIT manager; or

(b) at a higher rate than otherwise payable including where it has

been deferred and whether payable in cash, by way of a profit
share or other means, shall be taken to be a penalty and shall
be void.

95. Recoverable expenses.

(1) Any entitlement to deduct fees by the trustee or the REIT
manager together with—

(a) a reasonable estimate of the recoverable expenses to be

incurred; and

(b) details of the estimated MER,

for the first two years following authorisation of the real estate
investment trust scheme from the date of the Prospectus or Information
Memorandum, shall be set out in the Prospectus or Information
Memorandum.

(2) The REIT manager shall, subject to the scheme documents, be

entitled in addition to any fee payable to recover and pay out of or charge
to the fund, expenses or an appropriate apportionment thereof, directly
related and necessary in operating and administering the real estate
investment trust which may include—

(a) the costs and expenses of or associated with the—

(i) undertaking of any capital works or authorised

development or construction including the appointment
of professional advisers; or
106
 (ii) the letting, maintenance, refurbishment of, development,
acquisition, investment, incurring income from or
disposal of assets;

(b) costs and expenses of or associated with—

(i) services provided in relation to the assets of the fund,
including electricity, water, cleaning, security or services
of a similar nature;
(ii) incurred for the modification of the scheme documents
other than for the benefit of the REIT manager or the
trustee;

(iii) incurred for any meeting of REIT securities holders other

than those convened for the benefit of the REIT manager
or the trustee;
(iv) insurance and maintenance of the real estate and other
assets belonging to the fund;

(v) related to or connected with the leasing and tenanting of

properties or otherwise earning income from the assets;

(c) general taxes and other duties, levies or charges on the fund
but not taxes levied on the trustee or REIT manager in their
personal capacities;

(d) fees and other expenses properly incurred—

(i) by the auditor appointed for the fund;

(ii) by any project manager certifier appointed for the real

estate investment trust or in respect of a particular
project;

(iii) by any structural engineer appointed for the real estate

investment trust or in respect of a particular project;

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 (iv) for the valuation of any investment or proposed
investment or asset of the fund by independent valuer for
the benefit of the fund;

(v) in defending claims against the fund; or

(vi) in respect of any asset or investment or proposed

investment of the fund;

(e) initial and ongoing listing expenses; and

(f) legal, accounting and normal underwriting fees and expenses

incurred in—

(i) arranging borrowing or other financing arrangements by

the trustee on behalf of the real estate investment trust; or

(ii) the issuing of additional REIT securities but not the costs
or expenses ordinarily associated with the redemption of
REIT securities or the issue of new or replacement REIT
securities in the fund.

(3) The overheads and costs of services expected to be provided by

a REIT manager in its capacity as REIT manager shall not be charged to
the fund.

(4) The trustee and the auditor shall review all expenses charged to
the fund and only allow such expenses which they reasonably determine
are legitimate and in accordance with standard arm’s length commercial
rates generally prevailing in Uganda.

(5) The trustee in addition to payment of its fee shall be entitled to

reimbursement by the fund, for any costs and expenses reasonably
incurred in the performance of its duties and responsibilities as a trustee
including the defending of the assets of the fund and the interests of the
REIT securities holders.

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 PART XVI—MAINTENANCE OF BOOKS, ACCOUNTS AND RECORDS

96. Maintenance of books, accounts and records.

(1) A trustee and REIT manager shall cause to be kept books,
records and accounts in respect of the fund, the scheme and the REIT in
accordance with the law and International Financial Reporting Standards
(IFRS).
(2) The books, records and accounts kept under sub regulation (1)
shall—
(a) adequately account for the assets and liabilities of the real
estate investment trust or incurred by the trustee or the REIT
manager in relation to or in connection with real estate
investment trust and the scheme; and
(b) sufficiently explain all contracts and transactions entered into
by the trustee or the REIT manager in relation to or in
connection with the real estate investment trust and the
scheme.

PART XVII—APPOINTMENT AND REMOVAL OF AN AUDITOR AND AUDIT

OF ACCOUNTS

97. Appointment of an auditor and audit of accounts.

(1) A trustee shall appoint an independent auditor to audit, at least
annually, the accounts and financial statements of the real estate
investment trust and the scheme.
(2) The auditor shall report whether the trustee and the REIT
manager have complied with these Regulations throughout the year.
(3) The Authority may appoint an auditor to undertake the audit
required under the Act and these Regulations where—

(a) the Authority is of the opinion that the auditor appointed under
sub regulation (1) is not suitable; or

(b) the trustee has failed to appoint an auditor.

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 (4) The Authority may, if it is of the opinion that a special audit is
necessary in the interests of the holders of REIT securities, appoint an
auditor to conduct such an audit.

(5) An auditor appointed under sub regulation (1) and (3), shall be
remunerated out of the assets of the real estate investment trust.

98. Removal of an auditor.

(1) An auditor appointed under Regulation 97 may be removed by
the trustee on—

(a) its own instance; or

(b) the request by way of ordinary resolution passed at a meeting

of REIT securities holders.

(2) Where an auditor has been removed under in sub regulation (1),
the trustee shall appoint another auditor in its place.

99. Notification to the Authority.

A trustee shall—
(a) notify the Authority and the REIT manager within seven days
of the removal or appointment of an auditor; and

(b) provide such information as the Authority may require, as to

the circumstances of any removal or replacement.

100. Co-operation with the auditor.

A trustee, REIT manager, valuer, property manager, property manager
certifier, structural engineer, legal or other adviser or party appointed in
relation to the real estate investment trust scheme or by the REIT
manager or in respect of a transaction entered into or proposed to be
entered into, shall—

(a) provide such assistance as the auditor reasonably requires to

discharge its duties;
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 (b) allow the auditor, at all reasonable times, access to premises,
documents, records, data and information including, access to
software and systems;

(c) not interfere with the ability of the auditor to discharge its
duties;

(d) not provide false or misleading information to the auditor;

(e) report to the auditor any matter which may significantly affect
the financial position of the real estate investment trust,
scheme or the fund or the conduct of the audit;

(f) waive and not claim any right to confidentiality or to privilege,

including legal professional privilege, in respect of any
information, advice, documents or data provided to or
prepared for or on behalf of the trustee or the REIT manager
which has been paid for out of the assets of the fund or was
obtained for the purposes of inclusion in any Prospectus or
Information Memorandum; and

(g) take all reasonable steps to ensure that any employee or person
appointed by it complies with the same requirements.

PART XVIII—PREPARATION OF PERIODIC REPORTS AND ACCOUNTS BY

THE REIT MANAGER AND TRUSTEE

101. Preparation of semi-annual and annual reports.

(1) A REIT manager shall prepare or cause to be prepared on behalf
of and present to the trustee for the trustee’s consideration, semi-annual
and annual reports for the scheme which includes the accounts for the
real estate investment trust for the periods.

(2) The reports prepared under sub regulation (1) shall—

(a) be submitted to the trustee for approval;

111
 (b) provide all the information necessary to allow the holders of
REIT securities and potential investors to evaluate the
performance of the real estate investment trust scheme; and
(c) be prepared in accordance with IFRS, the Act and these
Regulations.

(3) The reports prepared under sub regulation (1) shall contain the
information required to be provided as set out in Form 4, Schedule 3 and
as the Authority may require and shall include—
(a) in the case of—
(i) the annual report, audited financial statements certified
by both the trustee and the REIT manager to be true and
correct; and
(ii) semi-annual report, financial statements which need not
be audited but are to be certified by both the trustee and
the REIT manager to be true and correct;
(b) the auditor’s report for annual statements which shall include
a compliance report.

(4) Any certifications by the trustee and REIT manager shall be

signed by the compliance officer of the trustee and in the case of the
REIT manager, by the chief executive officer and at least one non-
executive director.

102. Failure to prepare reports.

(1) Where the REIT manager fails to cause the preparation of
accounts and reports as required under the Act or these Regulations, the
trustee shall, without relieving the REIT manager of any obligation—

(a) advise the Authority of the failure of the REIT manager; and

(b) cause the accounts and reports, other than the REIT manager’s
report, to be prepared as expeditiously as possible at the
expense of the REIT manager.
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 (2) The REIT manager, any property manager and other person
appointed by the REIT manager or the trustee in connection with the real
estate investment trust scheme or any person whose fees or costs have
been paid out of the fund or are recoverable from the fund, shall provide
the trustee and any person appointed by the trustee to prepare the reports
and accounts with all such information, assistance and access to
information and data as the trustee or the person appointed by the trustee
may require.

103. Submission of reports to the Authority and REIT securities

holders.
(1) The REIT manager, in consultation with the trustee, shall-

(a) file with the Authority, a copy of the—

(i) first half financial year reports and accounts within thirty
days of the end of the half year;

(ii) annual report and the audited accounts within three

months of the end of the financial year;

(b) provide such other information, statements, books, records or

other particulars as may be required by the Authority, and

(c) in the case of an unrestricted I-REIT publish in at least two

daily newspapers of national circulation the—
(i) first half financial year and accounts within thirty days of
the end of the first half of the financial year;

(ii) annual report and audited accounts within three months

of the end of the financial year.

(2) The REIT manager shall send to every REIT securities holder,
without a charge, a copy of—

(a) the first half financial year reports and accounts within thirty
days of the end of the half year; and
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 (b) the annual report and the audited accounts within three months
of the end of the financial year.

104. Distribution recommendations and statements.

A REIT manager shall, whenever a distribution, including any interim
distribution is made, circulate to the Authority and to the REIT securities
holders a notice of distribution and a statement authorised by the trustee
which statement shall include details of—

(a) the source and nature of the distribution;

(b) the total returns of the real estate investment trust and scheme
from income or capital gains;

(c) in the case of an I-REIT the percentage income distributed as

calculated in accordance with regulation 73 and if less than
eighty percent the reasons why the proposed distribution is
less than eighty percent; and

(d) the net asset value per unit prior to and subsequent to, the
making of the distribution.

PART XIX—NOTIFICATIONS AND REPORTING TO THE AUTHORITY

105. Notification and compliance report by the trustee.

A trustee shall, in addition to any other requirement for notification
under the Act or these Regulations, notify the Authority, within seven
days of—

(a) its becoming aware of any failure, act or omission by the

trustee, REIT manager, property manager including any
person appointed by the REIT manager; the valuer or project
manager certifier which constitutes or may constitute a breach
or contravention of any provisions of the Act, these
Regulations or the scheme documents and any steps taken by
the trustee or any other party to ensure that the breach or
contravention is rectified as soon as possible;
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 (b) appointment, removal or retirement of—

(i) the REIT manager;

(ii) the auditor;
(iii) valuer; or
(iv) project manager certifier;
(c) amendments to the trust deed;
(d) appointment or changes to the compliance officer of the
trustee;
(e) amendments to any REIT manager agreement or other scheme
document;

(f) acquisition or disposal of any real estate assets;

(g) any resolution passed to wind up the real estate investment
trust;

(h) any resolution proposed to remove the trustee or the REIT

manager; and

(i) the completion of the termination or winding up of the real

estate investment trust.

106. Notification and compliance report by the REIT manager.

The REIT manager shall, in addition to any other requirement for
notification under the Act or these Regulations, notify the trustee and the
Authority, within seven days of—

(a) appointment or changes to the compliance officer of the REIT

manager;

(b) appointment, removal or retirement of—

(i) the chief executive officer of the REIT manager;

(ii) a director of the REIT manager; and

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 (c) becoming aware of any failure, act or omission of the trustee,
REIT manager including any person appointed by the REIT
manager, any property manager, valuer, project manager
certifier which constitutes or may constitute a breach or
contravention of any provisions of the Act, these Regulations
or the scheme documents and the steps taken by the REIT
manager or any other party to ensure that the breach or
contravention is rectified as soon as possible.

107. Notification and compliance report by the auditor.

An auditor shall, in addition to any other requirement for notification
under the Act or these Regulations, notify the trustee and the Authority
within seven days of becoming aware of any failure, act or omission of
the trustee, REIT manager, including any person appointed by the REIT
manager, any property manager, valuer, project manager certifier which
constitutes or may constitute a breach or contravention of any provisions
of the Act, these Regulations or the scheme documents and the steps
taken by the auditor or which the auditor has recommended be taken to
ensure that the breach or contravention is rectified as soon as possible.

108. Availability of reports.

The Authority shall make available, for public inspection as soon as
possible after filing, all the reports, notifications and continuing
disclosure documents filed with the Authority which relate to a real
estate investment trust or scheme.

PART XX—ACQUISITION AND DISPOSAL OF ASSETS

109. Acquisition from promoter and connected parties.

A trustee may, subject to compliance with the Act and these Regulations
and any listing requirements, if authorised by the scheme documents and
approved by the Authority, acquire or dispose of real estate and related
assets of the real estate investment trust from or to—
(a) the promoter of the scheme; or

(b) other connected persons or connected parties.

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110. Additional acquisitions.
(1) Following the initial issue or offer of REIT securities to persons
other than the promoter or persons connected with the promoter, where
there is an intention to acquire or dispose of any real estate assets, then
prior to entering into any binding contract or any agreement that can
only be terminated on the payment of consideration or of a penalty, the
REIT manager shall obtain and provide to the trustee—

(a) a report from a structural engineer on the condition of the real

estate assets, which report shall be made available to each
valuer prior to the conduct of any valuation;

(b) a valuation report;

(c) where the total consideration for the proposed acquisition

from or disposal to a person who is not the promoter or
connected person represents more than fifteen percent of the
latest published net asset value, the approval by way of an
ordinary resolution, passed in a general meeting, of the holders
of REIT securities, or

(d) where the total consideration for proposed acquisition from or

disposal transaction to the promoter or a connected person
represents more than five percent of the latest published net
asset value of the trust, obtain the approval by way of an
ordinary resolution, passed in a general meeting, of the holders
of the REIT securities.

(2) Where, as part of the initial offer of REIT securities it is

proposed to acquire or dispose of any real estate assets prior to entering
into any binding contract or any agreement that can only be terminated
on the payment of consideration or of a penalty, the REIT manager shall
comply with the requirements of sub regulation 1(a) and (b) but shall not
be required to comply with sub regulation 1(c) or (d).
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 PART XXI—APPOINTMENT OF A VALUER AND VALUATION OF ASSETS

111. Appointment of a valuer.

(1) A trustee in consultation with the REIT manager shall—
(a) prior to an application being made to the Authority for
authorisation of a scheme, appoint a valuer to value the real
estate assets which have been vested in the trust or acquired or
are proposed to be acquired by trustee;
(b) ensure that where necessary, an additional alternative or
substitute valuer is appointed on a timely basis in the event
of—
(i) the retirement, removal or the valuer ceasing to act;
(ii) the valuer not being qualified to act; or
(iii) an additional valuation report being required;
(c) where the real estate investment trust has assets which are not
real estate assets and which are not in the form of cash, bank
deposits or listed securities, appoint a suitably qualified
independent professional valuer, to undertake the valuation of
those assets.

(2) The valuer shall be appointed for a term of not more than three
years and shall not, except with the prior approval of the Authority, be
reappointed as valuer of that scheme at the conclusion of the term from
the date of expiry of any prior term.

(3) The trustee, in consultation with the REIT manager shall, where
for any reason or in respect of any acquisition, disposal or specific
transaction, the valuer ceases to be independent or the trustee is of the
opinion that given the nature of the asset the valuer does not have the
required skills, appoint another valuer for the specific purpose of
conducting the required valuation.

(4) A person shall only be eligible to be appointed as a valuer of a

real estate asset if that person—
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 (a) is registered, licenced or recognised by the Institution of
Surveyors of Uganda or similar body established under the
Laws of Uganda as a valuer;
(b) is independent as provided for under sub regulation (8) and
does not have a conflict of interest;
(c) provides real estate and other property valuation services on a
regular basis;
(d) carries on business of valuation of real estate in Uganda;

(e) has been a member of the relevant Authority or organisation in

good standing for a minimum of five years; and
(f) has in place and maintains professional liability insurance to
cover its obligations.

(5) In the case of a specialist valuer appointed in respect of assets

other than real estate, only sub regulations (4)(a) and (f) shall apply.

(6) All valuations prepared by a valuer shall be addressed to the

trustee and expressed to be for the benefit of the trustee as trustee of the
REIT and the REIT securities holders as beneficiaries of the REIT.

(7) Where the REIT manager is a manager of more than one

scheme, the same valuer may not be appointed for more than one
scheme.

(8) A valuer shall not be considered to be independent if—

(a) that valuer falls within the definition of a connected person;
(b) the valuer or its partners, directors, officers or key personnel
hold REIT securities in the scheme;
(c) the valuer has any financial, professional or other interest that
can affect the ability of the valuer to render unbiased
professional services to the trustee in relation to the scheme or
its assets including any assets that it consider acquiring; or
119
 (d) in the case of a valuation that is conducted in connection with
the disposition or acquisition or proposed disposition or
acquisition of an asset, the valuer has within the two years
immediately prior to the date of the valuation undertaken or
been retained to provide a valuation for the counterparty or
proposed counterparty to the disposal or acquisition.

(9) A valuer shall—

(a) include in any valuation undertaken, a declaration as to its

independence and evidence of the currency of its professional
liability insurance; and

(b) on request provide the trustee with a declaration and evidence

of currency of insurance for inclusion in any periodic report
the trustee is required to prepare.

(10) A valuer shall inform the trustee immediately if it becomes

aware of any potential conflict or event that would cause it to cease its
independence generally or where it would not satisfy the requirements of
this regulation generally or in respect of a particular or proposed
valuation, disposition or acquisition.

(11) Where a valuer appointed under this regulation—

(a) generally ceases to be independent or qualified for

appointment, the valuer shall retire and the trustee in
consultation with the REIT manager shall, within a period of
thirty days, appoint a new valuer; or

(b) would not be independent in respect of a particular or

proposed disposition or acquisition or notifies the trustee that
it does not satisfy the requirements of this regulation, the
trustee in consultation with the REIT manager, shall appoint
an alternative valuer to act in respect of that particular
transaction and any subsequent valuations required of that
particular asset.
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112. Obligations of a valuer.
A valuer shall—

(a) not hold REIT securities in an investment scheme for which it

has been appointed as a valuer;

(b) comply with the Act and these Regulations;

(c) immediately advise the trustee and the REIT manager if it

ceases to be independent or to be qualified for appointment or
to conduct a specific valuation or has a conflict;

(d) ensure that its opinion and valuation are objective and
independent of its business or commercial relationships; and

(e) immediately inform the trustee and the REIT manager of any
circumstance or factors which come to the knowledge of the
valuer which may reasonably affect the accuracy of the last
valuation report prepared in respect of any asset.

113. Basis for valuation and conduct of valuation.

(1) The trustee shall cause a valuation of the real estate assets of the
trust to be conducted and ensure that other assets of the trust are
appropriately valued—

(a) prior to acquisition or disposal of any asset;

(b) prior to the issue or offer of any REIT securities except where
the issue or offer is made to the promoter or to connected
persons;
(c) on an annual basis or shorter period as is necessary to enable
the trustee and or the REIT manager to prepare the reports
required to be prepared under the Act or these Regulations or
to fulfil its obligations as trustee;

(d) if the auditor or REIT securities holders request; and

121
 (e) at any other time, if the trustee or the REIT manager or the
auditor is of the opinion that it is desirable in the interests of
the REIT securities holders that a valuation be conducted or
that there has been a material change that may result in the
then current valuation being incorrect.

(2) A valuer shall conduct a full valuation of all the real estate
assets—

(a) based on a full physical inspection of all sites and inspection

of all buildings and any facilities erected thereon, associated
plant and equipment at least once every three years; and

(b) based, in each other year, on a desk top review unless the
valuer is of the opinion that a full physical inspection is
necessary or is requested by the trustee to conduct a full
physical inspection.

(3) The trustee and the REIT manager shall, where the assets of the
scheme involve—

(a) land or real estate under development or construction; or

(b) a contract to acquire assets under construction,

ensure that a project manager certifier prepares an assessment report and

any structural engineer’s report that has been obtained or is required to
be obtained has been made available to the valuer prior to the completion
of the valuation.

(4) An assessment report made under sub regulation (3) by the

project manager certifier shall include—

(a) the estimate of the cost to complete the development or

construction;

(b) the costs incurred to date in the development or construction;

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 (c) the progress against the original and any revised schedule,
contract or project plan; and

(d) a comparison of costs incurred against the original and any

amended budgets.

(5) A valuer is not required to accept the contents of the assessment

or report prepared under sub regulation (3) in its valuation, but shall
disclose the details of the assessment or report and include comments on
the impact, if any, of the assessment or report on the valuation.

(6) Unless a specialist valuer is appointed, a REIT manager shall

value cash, bank deposits, bonds, other assets of a similar type and listed
securities on a daily basis and report to the trustee at the conclusion of
each working day and provide the trustee with details of such valuations
so as to enable the trustee to fulfil its obligations under the Act and these
Regulations.

(7) Where—

(a) the trustee, at the request of the REIT manager, proposes to

issue new REIT securities for subscription; or

(b) redemption is required or permitted and the trustee proposes to

redeem REIT securities,
and the assets were valued more than six months prior to the proposed
issue or redemption, a minimum desk top valuation, not involving a full
physical inspection, shall be conducted by the valuer prior to the issue or
redemption provided the REIT manager and the valuer certifies to the
trustee that they are not aware of any fact or condition that would have
resulted in values of the real estate assets to have changed materially.

(8) Valuations shall be conducted on the basis and in accordance

with the procedures and methodologies as set out in Schedule 4 as well
as the valuation standards published and adopted by the body
responsible for the registration of surveyors.
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114. Fees and remuneration of a valuer.
(1) Subject to sub regulation (3) and to compliance with any law
relating to valuation fees, a valuer shall be paid a pre-determined annual
fee.
(2) Except where required by law, the fees payable under sub
regulation (1) shall not be contingent upon the valuation of the assets as
determined by the valuer.
(3) Where as a consequence of the operation of these Regulations,
an additional or alternative valuer is appointed to undertake a specific
valuation, except where a law requires a fixed fee for conducting the
required valuation, it shall be agreed prior to appointment of the valuer
that such fee shall not be contingent upon the valuation of the assets as
determined by the valuer.
(4) Neither the trustee nor the REIT manager shall be entitled to
charge a separate or additional fee in respect of a valuation.

115. Removal of a valuer

The trustee shall remove a valuer where—

(a) the valuer ceases to be qualified under regulation 111 other

than where a valuer has a conflict or is otherwise not qualified
only in respect of a particular acquisition or disposition and an
alternative valuer has been appointed for the purpose of
undertaking such valuation;

(b) the valuer goes into liquidation, becomes bankrupt or if a

receiver or administrator is appointed over the assets of the
valuer;

(c) the trustee, on its own initiative or following a request from

the REIT manager, is of the opinion that it is desirable in the
interests of the REIT securities holders;

(d) the valuer has contravened any provisions of the scheme

documents, the Act or these Regulation;
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 (e) the REIT securities holders at a meeting—
(i) of which the Authority has been provided with not less
than seven days prior notice;
(ii) where the valuer has been given the opportunity to be
present at the meeting and make oral or written
submissions; and
(iii) after hearing the recommendations of the trustee and the
REIT manager,
pass an ordinary resolution requiring the removal of the valuer.

116. Retirement of a valuer.

(1) A valuer shall retire—
(a) if it ceases to be qualified except where there is a conflict or it
is not qualified in respect of a particular acquisition or
disposition and an alternative valuer has been appointed for
the purpose of undertaking such valuation; or
(b) as provided for in the scheme documents.
(2) The valuer shall, upon retirement before the end of a three-year
term, provide the Authority with the reasons for its retirement.

117. Power of the Authority to require a valuation.

(1) The Authority may, if it considers necessary, appoint a valuer to
carry out a valuation of any assets of a scheme.

(2) A valuation carried out under sub regulation (1) shall be final
and binding.

(3) The trustee, REIT manager, property manager, property

certifier, valuer including any former valuer or other party appointed in
connection with the scheme, shall provide such documents, information
and assistance to the Authority and any valuer appointed by the
Authority to enable that valuer undertake its role in a professional
manner.
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 (4) Fees, expenses or costs incurred by the Authority in appointing
a valuer under this regulation shall be paid by the trustee out of the assets
of the REIT.

PART XXII—CONNECTED PARTY TRANSACTIONS

118. Connected party transactions.

(1) For the purposes of these Regulations, a connected party
transaction is a transaction entered into or proposed to be entered into
between the trustee or the REIT manager on behalf of the real estate
investment trust and a connected person.
(2) Where the REIT manager manages more than one scheme and
a transaction or proposed transaction involves two or more schemes
managed by the REIT manager, any such transactions shall be deemed
to be connected party transactions for each of the schemes.
(3) A transaction carried out on behalf of the trust by the trustee, the
REIT manager or any party appointed by the trustee or the REIT
manager shall be—
(a) carried out at arm’s length;
(b) in cases of any real estate transactions be valued by a valuer in
accordance with the requirements of the Act and these
Regulations;
(c) consistent with the stated objectives and strategy of the
scheme;

(d) in the best interests of the REIT securities holders; and

(e) properly disclosed to the REIT securities holders.
(4) Where money is deposited with or borrowed from any
connected party being a party authorised to accept deposits and advance
loans, the interest to be paid on the deposit shall not be less than that
currently applying for deposits of a similar amount and on similar terms
and the rate of interest charged on borrowing shall be not greater than
that applying to a transaction of a similar amount and on similar terms.
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 (5) All connected party transactions shall be conducted on terms no
less favourable than standard commercial terms and shall be subject to
the prior approval of the trustee and where required by the Act or these
Regulations by the REIT securities holders.

(6) Where goods or services are to be contracted with a connected

party other than for which a fee is charged by the trustee or the REIT
manager under regulations 92 and 93, unless the goods and services are
to be provided pursuant to a transparent open bidding process, if the
proposed cost of the goods and services when aggregated with all other
transactions conducted with connected persons relating to the provision
of goods and services in the immediately preceding twelve months
exceeds or would exceed fifteen percent of the amount spent on
connected party provided goods and services, such a contract shall not
be entered into or approved by the trustee unless it has first been
approved by-

(a) an ordinary resolution passed by the REIT securities holders

at a duly convened meeting; and

(b) no person connected with the person with whom it is proposed

to enter into the contract, shall be entitled to vote.

(7) Details of all connected party transactions and the value of such
transactions on an aggregated basis shall be disclosed in the next
published semi-annual or annual report of the real estate investment
trust.

PART XXIII—DOCUMENTS TO BE AVAILABLE FOR INSPECTION BY REIT

SECURITIES HOLDERS

119. Documents to be availed for inspection.

A trustee and a REIT manager shall avail at their principal places of
business to the REIT securities holders and any prospective investor, at
no charge during ordinary business hours the following documents for
inspection—

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(a) the trust deed and any supplemental deeds of the real estate
investment trust;

(b) the first Prospectus or Information Memorandum issued and

any supplemental, replacement or subsequent Prospectus or
Information Memorandum, including a conversion Prospectus
or conversion Information Memorandum;

(c) the latest annual and semi-annual reports;

(d) each material contract or document referred to in any

Prospectus or Information Memorandum;

(e) all reports, letters, documents, valuations or statements by any

expert or where any part of such document is extracted or
referred to in any Prospectus or Information Memorandum the
complete version of the document and the consent given by
the experts for inclusion in the Prospectus or Information
Memorandum;

(f) copies of any valuation reports undertaken in the previous

three years together with assessments or reports by any project
manager certifier or structural engineer;

(g) the audited accounts and any semi-annual unaudited accounts

for the real estate investment trust for the past three financial
years or if established less than three years, then for the period
since establishment;

(h) the audited accounts for the trustee and the REIT manager for
the past three financial years or if established less than three
financial years, then for the period since establishment;
(i) copies of minutes of all the meetings of REIT securities
holders; and

(j) the register of REIT securities holders.

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 PART XXIV—ISSUE OF ADDITIONAL REIT SECURITIES

120. Issue of additional REIT securities.

(1) Except where otherwise authorised by the Act or these
Regulations, all new or additional issues of REIT securities shall be
offered to existing holders on a pro rata basis to their existing holdings
and shall only be offered or issued to other persons to the extent that they
have previously been offered on no less attractive terms to and have not
been taken up by existing holders.

(2) Subject to compliance with the Act and these Regulations

relating to acquisitions and valuations, this regulation shall not apply to
issues—

(a) of a connected person or an independent third party in full or

part payment for the acquisition of real estate assets provided
that the aggregate number of REIT securities issued in the
previous twelve months, other than on a pro rata basis, does
not exceed twenty percent of the number of REIT securities on
issue at the commencement of that period;

(b) where the issue has been authorised by an ordinary resolution

passed by the REIT securities holders at a duly convened
meeting, and at that meeting no person being a connected
person with the person to whom it is proposed to issue the
REIT securities shall be entitled to vote; or

(c) made under regulation 28 or regulation 30 to fund a cost

overrun.

PART XXV—MEETINGS OF REIT SECURITIES HOLDERS

121. Meetings of REIT securities holders.

(1) The scheme documents shall provide for the meetings of the
REIT securities holders, voting and procedures for the conduct of
meetings.

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 (2) The provisions in the scheme documents shall—

(a) include the matters set out in Schedule 5;

(b) be read in addition to the rights set out in the Act and in these
Regulations to call meetings; and

(c) not conflict with the provisions of the Act or these

Regulations.

(3) In cases where the approval of the REIT securities holders is

required—
(a) where the proposed transaction involves the promoter or any
connected person, neither the promoter nor any connected
person shall be permitted to vote at a general meeting on the
resolution;

(b) details of the proposed transaction together with any

connection to the promoter shall be disclosed and a full copy
of the valuation provided to all REIT securities holders at the
time when the notice of the meeting is given, and

(c) the Authority shall receive prior notification of the intended

proposal to seek REIT securities holders approval prior to the
circulation of any notice.

PART XXVI—LICENSING OF TRUSTEE AND REIT MANAGER

122. Application for a licence by a trustee and a REIT manager.

An application for a licence to operate as a REIT manager or as a trustee
of a REIT scheme shall be submitted to the Authority in duplicate in
Form 5 as set out in Schedule 3.

123. Specific requirements for licensing as a trustee or REIT

manager.
(1) The application under regulation 122 shall be accompanied
with—
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(a) a certificate of incorporation;

(b) a memorandum and articles of association;

(c) a statement of audited accounts for the period of the
accounting year ending not earlier than six months prior to the
date of application and the applicant’s audited accounts for the
preceding two years and for the entities that at the time of
application have been in existence for less than six months
from the date of their incorporation, an opening balance sheet
and an auditor’s certification of the company’s share capital;

(d) a business plan containing particulars on—

(i) the management structure;

(ii) the directors, including one or more executive directors,
their qualifications, addresses and details of other
directorships;

(iii) the shareholding structure, disclosing whether any of the

shareholders will have an executive role to oversee the
day-to-day operations of the business;
(iv) the evidence of a minimum paid-up share capital of not
less than ten thousand currency points for REIT
managers or other fee as specified in the Act and the
Regulations issued thereunder;

(v) the qualifications, experience and expertise of the chief

executive;

(vi) the proposed management and qualifications of key

personnel with capacity to undertake the designated role
or the accessibility of the key personnel to such skills and
experience;

(vii) the financial projections for three years for the trustee and
the REIT manager in respect of their businesses;
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 (viii) the proposed operating and information technology
system to be utilised in connection with the scheme;

(ix) one bank reference and in the case where the applicant is
a bank, the reference shall be given by another bank
independent of the applicant;

(x) business references;

(xi) the proposed premises suitably located and equipped to

provide satisfactory service to REIT securities holders or
evidence acceptable to the Authority that such premises
will be available;

(xii) the staff capable of providing professional services or

evidence acceptable to the Authority that such staff will
be available; and

(xiii) the independent auditor of or proposed for the trustee or

the REIT manager;

(e) the fees as prescribed in Schedule 6.

(2) Every person who is a director, chief executive, REIT manager

or trustee, shall be fit and proper to hold the particular position which he
holds.

(3) Where the applicant for trustee is a financial institution or an

insurance company, it shall obtain and submit to the Authority a no
objection letter from its primary regulator.

124. Financial requirements for a trustee and REIT manager.

(1) The level of shareholders’ funds of paid up share capital and
reserves for a REIT manager or a trustee, shall not fall below seven
thousand five hundred currency points for a REIT manager at any time
during the licence period.

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 (2) The paid up share capital of the REIT manager or a trustee shall
always be unimpaired and shall not be advanced to the directors or
associates of the REIT manager or the trustee as the case maybe.

(3) A trustee and a REIT manager shall maintain a liquid capital of

seven thousand five hundred currency points.

(4) Unsecured advances, loans and other amounts to directors or

associates of a REIT manager or trustee shall be made out of
shareholders’ funds which are in excess of the prescribed minimum
shareholders’ funds provided that such loans shall not exceed ten percent
of the shareholders’ funds at any time.

(5) The ratio of the REIT manager’s or trustee’s borrowings to the

paid-up capital shall not exceed twenty percent, at any time.

(6) Where a trustee is a financial Institution licenced under the

Financial Institutions Act or an insurance company licenced under the
Insurance Act, the trustee shall be considered to be in compliance with
these financial requirements as long as it holds a valid licence issued by
either the Central Bank of Uganda or the Insurance Regulatory
Authority.

125. Records to be maintained by trustee and REIT manager.

(1) Every REIT manager or trustee shall maintain and preserve for
a period of ten years which in the case of the sale or disposal of an asset
shall be from the date of disposal of the asset and in the case of a
borrowing or financing arrangement or risk management transaction
shall be from the date of the termination or maturity of the transaction or
such later period as is specified, the following records—

(a) journals, cash receipts, disbursement records and any other

records or original entry forming the basis of entries in any
ledger in respect of the REIT manager or the trustee’s business
and in respect of the REIT;
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(b) general and auxiliary ledgers or other comparable records
reflecting assets, liabilities, reserves, capital, income and
expense accounts in respect of the REIT manager or the
trustee’s business and in respect of the REIT;

(c) a record or memorandum of each request, direction or

instruction given by the REIT manager or the trustee for the
purchase or sale of real estate assets or REIT securities as the
case may be or any other asset, investment, request, direction
or instruction received by the REIT manager from the trustee
or REIT securities holders concerning the purchase, sale,
receipt or delivery of a particular real estate asset or REIT
securities of other asset or investment and any modification,
cancellation or any such order or instruction and the record
shall—

(i) show the date and terms and conditions of the request,
direction, instruction, modification or cancellation;

(ii) identify the person connected with the REIT manager

who recommended the transaction to the trustee;

(iii) all valuation reports requested or obtained;

(d) all cheque books, bank statements, cancelled cheques and cash
reconciliation of the REIT manager or the trustee;

(e) all bills, statements or copies paid or unpaid relating to the

business of the REIT manager or trustee;

(f) a record or memorandum of all requests, directions or

instructions by the REIT manager or the trustee and of any
meeting of REIT securities holders held for the purpose of
entering into a borrowing, financing or risk management
arrangement together with details of any comparative quotes
obtained in respect of such transactions which shall be
maintained indefinitely;
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(g) originals of all written communication received from REIT
securities holders or trustee, copies of resolutions put to or
passed by meetings or REIT securities holders and copies of
all written communication sent by the REIT manager or
trustee relating to—
(i) any recommendations made or proposed in a meeting of
the REIT securities holders;
(ii) any receipts, disbursement or delivery of funds or real
estate assets or REIT securities or other assets; and
(iii) the placing or execution of any request, direction or
instruction to purchase or sell any real estate asset, REIT
securities or other asset or investment provided that
where the REIT manager sends any notice, circular or
other advertisement Information, report, analysis,
publication or other investment advisory services to more
than ten persons, the REIT manager shall not be required
to keep a record of the names, addresses and the source
of the information of the persons to whom it was sent
except if such notice, circular or advertisement is
distributed to persons named on any list;
(h) all written agreements or copies entered into by the REIT
manager with a trustee or REIT securities holder or otherwise
relating to the REIT manager’s business, the operation of the
REIT or the conduct of the REIT managers activities in
respect of the REIT which shall be retained indefinitely;

(i) a copy of each notice, circular, advertisement, newspaper

article, investment letter, bulletin or other communication
recommending the purchase or sale of REIT securities, which
the REIT manager circulates or distributes directly or
indirectly to ten or more persons and if such notice, circular,
advertisement, newspaper article, investment letter, bulletin or
other communication does not state the reasons for such
recommendation, a Memorandum from the REIT manager
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 indicating the reasons thereof of all advertisements by the
REIT manager and all records, worksheets and calculations
necessary to form the basis for performance data in such
advertisements;
(j) a record of every transaction in REIT securities in which the
REIT manager or trustee or any of the REIT manager’s or
trustee’s employees acquire any direct or indirect beneficial
ownership and the record shall state the title and amount of the
security involved, the date, whether the transaction was a
purchase or sale or other acquisition or disposition, the price at
which it was effected, and the name of the stockbroker with or
through whom the transaction was effected;

(k) a copy of each written statement, the amendment or revision

as the case may be, given or sent to any REIT securities holder
or prospective REIT securities holder of such REIT and a
record of the dates that the same was given or offered to be
given; and

(l) any other records as may be determined by the Authority.

(2) The records specified under sub regulation (1) shall, without
notice, be subject to inspection from time to time by the Authority.

126. Conduct of REIT manager and trustee.

(1) A trustee or REIT manager shall not—

(a) guarantee a REIT securities holder that a specific result will be

achieved arising from the advice which will be rendered; or

(b) publish, circulate or distribute any advertisement which does

not comply with the Act and these Regulations;

(2) Information provided by a REIT manager or a trustee to REIT

securities holders through reports, newsletters and advertisements shall
be factual and accurate.
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 (3) A REIT manager or trustee shall not lend money to a REIT
securities holder unless the REIT manager or the trustee is a financial
institution engaged in the business of loaning funds or the loan is made
by the trustee on behalf of the D-REIT subject to regulation 13.

127. Reporting by REIT manager and trustee.

(1) All financial statements prepared by a REIT manager and a
trustee as a licencee shall be prepared in accordance with International
Financial Reporting Standards and every trustee or REIT manager shall
in addition to complying with the reporting obligations in respect of the
REIT submit to the Authority—

(a) half yearly reports of its own financial performance within

thirty days before the end of the half year; and

(b) audited annual accounts for its operations within three months
following the closure of the financial year, in the form as may
be prescribed from time to time.

(2) Notwithstanding sub regulation (1), the Authority may require

such other form of reporting as it may specify.

128. Application of the Collective Investment Schemes (Licensing)

Regulations, 2003.
(1) The Collective Investment Schemes (Licensing) Regulations,
2003, shall be deemed to apply to a trustee or REIT manager licenced
under these Regulations as if the trustee or REIT manager was licenced
under those Regulations.

(2) The Collective Investment Schemes (Licensing) Regulations,

2003, as regards renewal of a licence, shall apply except that, the
reference in the Regulations to “Form 1 set out in the First Schedule”
shall be deemed to be a reference to Form 5 as set out in Schedule 3 of
these Regulations.
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PART XXVII—APPLICATION OF UGANDA SECURITIES EXCHANGE LISTING
RULES, 2013

129. Application of the Capital Markets (Prospectus Requirements)

Regulations, SI 84-2
(1) The Capital Markets Authority (Prospectus Requirements)
Regulations, S.I 84-2, shall apply to offers, listing and disclosure in
relation to REIT securities and subject to any variations as specified in
these Regulations.

(2) Where there is any inconsistency or conflict in the requirements

of these Regulations and those of the Capital Markets (Prospectus
Requirements) Regulations, these Regulations shall apply to the extent
of the inconsistency or contradiction.

130. Fees
The fees under these Regulations shall be as prescribed in Schedule 6.

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 Schedule -1
Reg. 3

CURRENCY POINT

One currency point is equivalent to twenty thousand Uganda shillings.

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 Schedule - 2
Reg. 6

MINIMUM CONTENTS OF TRUST DEED

The requirements set out in this Schedule in relation to the minimum contents
of a trust deed for a REIT are in addition to the provisions contained in the Act
and any other duty or obligation imposed under the laws of Uganda.

A trust deed shall reflect the requirements of the Act and these Regulations.

The trust deed shall include a list of definitions or glossary of terms and a table
of contents.

1. Establishment of the trust and vesting of property.

(1) The trust deed shall expressly state that it is binding on the promoter,
trustee, REIT manager, all REIT securities holders and investors in REIT
securities and any party to the REIT and any scheme to which it relates that is
authorised by the Authority, as if each party had been a party to the trust deed.

(2) The trust deed shall be subject to the Act and these Regulations and
shall specifically state that, “the provisions of the trust shall apply to the extent
that where there is conflict with the Act or these Regulations, the Act and these
Regulations shall prevail.

(3) The trust deed shall provide for—

(a) the creation of the trust;
(b) the name of the trust;
(c) the duration of the trust subject to the law on perpetuities;
(d) a declaration of trust or initial vesting of assets in the trustee by the
promoter as settlor of the trust to constitute the fund to be held on
trust for the beneficiaries;
(e) the terms of the trust;
(f) a statement that the REIT has been authorised by the Authority;
(g) particulars of the type of trust as provided under regulation 9; and
(h) any other scheme documents to be governed by the laws of Uganda.
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2. Appointment of trustee and duty of trustee.
The trust deed shall include—

(a) an agreement by the trustee upon establishment of the trust to act as

trustee of the REIT subject to the terms of the deed, the Act and
these Regulations;

(b) a clear and unqualified statement of the trustee’s fiduciary role and
obligations to the REIT securities holders as beneficiaries of the
trust and its discretions; and

(c) an acknowledgement by the trustee that it is bound by the terms of

the trust deed, the Act and the Regulations.

3. Requirement for segregation of assets and acknowledgement that the

trustee has no claim on the assets.
The trust deed shall specifically include an acknowledgement by the trustee of
its fiduciary obligations to—

(a) hold the assets of the trust in a manner which ensures that these are
segregated from the assets of the trustee and from the assets of any
other trusts administered by the trustee;

(b) clearly identify assets which are held on trust for the REIT securities
holders as beneficiaries of the REIT;

(c) not to charge, pledge or deal with any asset of the trust except in a
manner authorised by the trust deed, the Act and these Regulations;
and

(d) ensure that the accounts of the trustee do not include any assets of
the trust.

4. The REIT securities holders as beneficiaries.

The trust deed shall ensure that the trust is constituted as a REIT securities trust
and shall provide for—

(a) the beneficial interest in the trust to be divided into units called
REIT securities;

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 (b) the classes of REIT securities and the rights attaching to each class;
(c) subject to any rights, obligations or restrictions attached to any
particular REIT securities, that each of the REIT securities confers
a right to an equal undivided interest or share in the assets of the
trust as a whole, subject to liabilities, and does not confer an interest
in a particular asset;

(d) the limit of the issue or offer of REIT securities to persons other than
the trustee or parties connected with the promoter—
(i) until the trust has been authorised as a REIT scheme; and

(ii) pursuant to the issue of a Prospectus or Information

Memorandum.
(e) the trustee to issue REIT securities and to register REIT securities in
the name of the beneficiary;
(f) the liabilities of REIT securities holders as investors in REIT
securities and shall ensure that their liability is limited to the assets
of the trust and shall clearly state that the trust deed and the scheme
documents—
(i) are binding on the REIT securities holders as if each REIT
securities holder had been a party to the trust deed; and

(ii) provide the trustee and REIT manager with a range of

discretions and powers and authorise and require the trustee
and the REIT manager to comply with the trust deed.

5. Initial role of promoter and obligations.

The promoter’s role and relationship with the trust shall include—

(a) the basis of payment or remuneration for the assets vested, acquired,
transferred to, vested or acquired by the trustee on behalf of the
trust;

(b) the promoter’s ongoing role and relationship with the REIT
manager including any arrangement to offer future real estate
acquisitions to the trustee and any involvement in development,
construction or management of the real estate assets of the trust;
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 (c) any leasing arrangement entered into or proposed to be entered into
by the promoter or any connected person and the trustee;

(d) any obligation by the promoter to defer its entitlements or to provide

income support;

(e) any lending or financing arrangement entered into or proposed to be

entered into by the promoter or any connected person and the
trustee; and

(f) the lock up period attached to any REIT securities issued or offered
to the promoter including in exchange for or in part exchange for
assets vested in, transferred to or acquired by the trustee.

6. Promoter’s covenants.
Following covenants by the promoter for the benefit of each of the REIT
securities holders as beneficiaries including past and future REIT securities
holders, the REIT manager and any subsequent trustee or REIT manager, the
trustee shall—

(a) comply with the Act, these Regulations and scheme documents to
which it is a party;

(b) pay the fees, expenses and costs of the trustee associated with the
establishment of the trust, the authorisation of the scheme, the
preparation, approval and issue of any Information Memorandum or
Prospectus including the obtaining of valuations and other expert
reports associated with the listing of the REIT securities;

(c) if the scheme is to be listed, use its best endeavours to provide any
required information or support to achieve the listing of the REIT
securities in the scheme; and

(d) assist and provide any required information or support required by

the trustee, REIT manager, valuer, auditor or any other party
appointed by the trustee or REIT manager for the purposes of
undertaking their roles in connection with the trust, the assets of the
trust or in fulfilling their obligations under trust deed, the Act or
these Regulations.

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7. Appointment of REIT manager and duties of REIT manager.
(1) The trust deed shall provide for the trustee to appoint a qualified REIT
manager as provided under the Act and these Regulations.

(2) The REIT manager shall be appointed as a contractor and is not the
agent of the trustee.

(3) The REIT manager shall be appointed in a fiduciary capacity to fulfil

the role of REIT manager as set out in the Act, these Regulations and the trust
deed and shall fulfil the objectives of the trust.

(4) The trust deed shall set out in detail the role of and functions to be
undertaken by the REIT manager so that the roles of the REIT manager and the
trustee are clearly delineated.

(5) The REIT manager shall provide instructions to the trustee to

implement the objectives of the trust and may appoint a property manager as
its agent and other parties as agents of the REIT manager to assist it in
undertaking its functions as REIT manager.

(6) The REIT manager shall be liable for any acts or omissions of its
agents.

(7) Provisions which exempt or purport to exempt a REIT manager from

liability for any failure to exercise due care and diligence in the discharge of its
functions in respect of the real estate investment scheme shall not be included
in the trust deed.

8. Appointment, retirement, removal and replacement of REIT

manager.
The trust deed shall contain provisions for the appointment, removal and
retirement of the REIT manager.

9. Objectives of the REIT and eligible assets.

(1) The trust deed shall set out—
(a) the purpose and objectives of the trust;

(b) the discretions of the trustee and the REIT manager in giving effect
to the stated objectives; and
144
 (c) authorised investments and eligible real estate assets in which the
trustee can invest.

(2) The trust deed shall identify the initial real estate assets that have been
or are to be vested in acquired by or transferred to the trustee on behalf of the
trust and set out clearly the implications of the failure to acquire assets within
the period of time as provided by the scheme documents, the Act or
Regulations.

(3) The trust deed shall set out in detail the requirements of the Act and
these Regulations as regarding eligible assets, requirements for minimum
investment in real estate and for the generation of income and provide
appropriate powers to address these requirements and the implications of non-
compliance.

10. Trustee’s powers.

(1) The trust deed shall set out in detail the powers of the trustee and shall
clearly delineate between the obligations of the trustee and the REIT manager.

(2) The powers of the trustee may be limited to acting in accordance with
the directions of the REIT manager provided that the directions are—

(a) in accordance with the terms of the trust deed and the Prospectus or
Information Memorandum;
(b) in conformity with the Act, these Regulations and the law relating
to trusts and trustees; and
(c) are in the trustee’s opinion, in the best interests of the REIT
securities holders.

(3) A provision included in the trust deed which exempts or purports to

exempt a trustee from liability for any failure to exercise due care and diligence
in the discharge of its functions in respect of the real estate investment scheme
is void as provided under regulation 20.

(4) The trust deed may provide for the trustee to delegate to an agent,
officer or employee provided that the trustee remains personally liable for the
fraud, negligence or default of its delegates and for the costs, fees and expenses
of any delegate.
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 (5) The trustee shall have power to appoint valuers, lawyers, accountants
and other professionals for the purpose of permitting the trustee to carry out its
duties and perform its obligations and shall charge their fees, costs and
expenses to the trust.

11. Trustee’s borrowing capacity and ability to charge trust assets as

security and right to indemnity.

(1) The trust deed shall set out the limits of the trustee’s capacity to
borrow and charge the trust assets as security.

(2) The trustee shall be entitled to limit its exposure or liability for any
borrowing to the assets of the trust subject to Act, these Regulations and the
laws relating to trusts and trustees.

12. Trustee’s covenants.

The trust deed in addition to providing for the usual fiduciary obligations of a
trustee for the benefit of each of the REIT securities holders as beneficiaries
and the past and future REIT securities holders, the REIT manager and any
subsequent trustee or REIT manager shall, contain as a minimum, the
following covenants by the trustee—

(a) act continuously as the trustee until the trust terminates, the trustee
retires or is removed in accordance with the trust deed;

(b) act honestly, prudently and in good faith at all times in the best
interests of the REIT securities holders as beneficiaries in the
performance of its duties and the exercise of discretion and due care,
skill, diligence and vigilance in carrying out its functions and duties
as a trustee and in safeguarding the rights and interests of the REIT
securities holders;

(c) take custody and control of all assets of the trust and hold the assets
on trust for the REIT securities holders;

(d) open a separate trust account in the name of the trustee, appoint
authorised signatories and ensure that the trust accounts are only
used for the purposes of the trust and as provided for by the scheme
documents;

146
(e) take all necessary steps to ensure that the assets of the trust are
adequately protected and insured in the name of the trustee;

(f) comply with the Act, these Regulations and terms of the trust deed
and scheme documents to which it is a party;

(g) ensure that the scheme has appointed a suitably authorised REIT
manager and in the interim period, act in the capacity as the REIT
manager;

(h) actively monitor the administration of the assets of the fund and the
performance by the REIT manager to ensure compliance with the
Act, Regulations and the scheme documents to which it is a party
and ensure that the interests of REIT securities holders are being
upheld;

(i) monitor the activities of the REIT manager to guard against the
REIT manager using its position to gain directly or indirectly an
advantage for itself or another person or to cause detriment to the
interests of REIT securities holders;

(j) make, when due, all authorised payments, including distributions

required by the scheme documents or requested to be made by the
REIT manager in accordance with the terms of the scheme
documents;

(k) cause to be kept proper books of account and records for all
investments and assets of the trust, liabilities or charges incurred
including taxes and imposts and transactions entered into by the
trustee or the REIT manager and distributions made;

(l) ensure that reports and accounts are prepared as required by the Act
and these Regulations and circulated to REIT securities holders and
filed with the Authority;

(m) appoint auditors and ensure that audits are undertaken as required by
the Act and these Regulations to protect the interests of REIT
securities holders;
(n) appoint valuers as required and take all reasonable steps to ensure
that the assets of the trust are correctly valued as required by the
Act, these Regulations and the trust deed;
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 (o) ensure that at all times through proper, adequate and diligent
supervision the fund and the scheme are managed and administered
by the REIT manager in accordance with the objectives of the trust,
the trust deed, the Act and these Regulations;

(p) notify the Authority to call a meeting of REIT securities if it

becomes aware of a breach of the trust deed, the Act or these
Regulations on any matter that could properly be regarded by a
trustee as not being in the interests of the REIT securities holders;

(q) convene or cause the trustee to convene meetings of REIT securities

holders whenever required by the Act, these Regulations or the trust
deed;

(r) ensure that the offer, issue, sale, purchase, repurchase, creation,
redemption or cancellation of REIT securities is in accordance with
the terms of the trust deed, the Act and these Regulations;

(s) not enter into any contract, agreement or arrangement which is in

conflict with or purports to override any term or obligation of the
trust deed, the Act or Regulation; and

(t) where the Act or these Regulations impose a specific requirement,

obligation or duty on the trustee, reflect in the trust deed by way of
a specific covenant, the requirement, obligation or duty.

13. Appointment, retirement, removal and replacement of trustee.

The trust deed shall provide for—

(a) the appointment of the initial trustee and the successor trustees;

(b) the retirement of the trustee;

(c) the vesting of the assets of the trust in a successor trustee and the
transfer of all books, accounts, documents, reports and records
including access to all required software and electronic records to
the successor trustee;
(d) the preservation of the rights, obligations, liabilities and any causes
of action by or against an outgoing trustee which arose or accrued
before the retirement or removal of the outgoing trustee; and
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 (e) the requirement of an outgoing or prior trustee to assist and join in
any subsequent action by a trustee or the Authority on behalf of
REIT securities holders against any party.
14. Reit manager’s covenants.
The trust deed in addition to providing for the usual obligations of a REIT
manager to implement and give effect to a real estate investment trust of the
designated type shall contain, as a minimum, the following covenants by the
REIT manager for the benefit of each the REIT securities holders as
beneficiaries including past and future REIT securities holders, the trustee and
any subsequent REIT manager—
(a) conduct its business and role as the REIT manager in a proper
diligent and efficient manner to implement the objectives of the trust
in an exclusive manner and in the best interest of REIT securities
holders and shall comply with the terms of the scheme documents,
the Act and these Regulations;
(b) act with due care, skill and diligence in managing the fund and the
trust and effectively employ the resources and procedures necessary
for the proper exercise of its duties and role in order to achieve the
objectives and performance of the scheme;
(c) comply with the Act, these Regulations, terms of the trust deed and
scheme documents to which it is a party;
(d) acquire, invest in, manage, lease and dispose of assets as authorised
in the trust deed in accordance with the stated objectives of the trust
so as to achieve optimum returns for REITS securities holders;
(e) conduct any construction and development activities in an efficient
manner within terms of the objectives of the trust and the risk profile
established for the trust;
(f) take all necessary steps to ensure that the assets of the trust are
adequately protected and insured in the name of the trustee and
segregated;
(g) not to enter into or recommend to or otherwise cause the trustee to
enter into contracts on behalf of the trust unless the transactions are
authorised by the trust deed and are for the purposes of operating a
REIT and do not contravene the Act or these Regulations and are in
the best interests of the REIT securities holders;

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(h) ensure that all payments or monies collected on behalf of the trustee
are paid as soon as possible and in any event no later than the next
business day into the trust’s designated bank account in the name of
the trustee and that payments are only requested to be made from a
bank account in accordance with the trust deed, the Act and these
Regulations;

(i) ensure that all payments required to be made by the trust, including
distributions, are requested from the trustee and are made when
payment is due;

(j) prepare recommendations as to distributions and draft distribution

statements when required by the Act and these Regulations;

(k) ensure that assets are correctly valued and are valued in time as
required by the trust deed, the Act and these Regulations;

(l) not exercise any voting rights that the REIT manager may hold in
respect of REIT securities in the trust except if authorised by the Act
or the Regulations and to avoid conflicts of interest;

(m) prepare and maintain proper accounting records and reports in

respect of the REIT manager and deliver a copy to the trustee;

(n) facilitate and assist in the audit of accounts and provide access to all
accounts, records, documents and reports and any assistance that is
required for the preparation of the reports and accounts;
(o) notify the Authority to call a meeting of REIT securities holders if
it becomes aware of a breach of the trust deed, the Act or these
Regulations of any other matter that could properly be regarded as
not being in the interests of REIT securities holders and take any
other steps as are necessary to protect the interests of REIT
securities holders;

(p) ensure that the offer, issue, sale or purchase or repurchase, creation,
redemption or cancellation of REIT securities is in accordance with
the terms of the trust deed, the Act and these Regulations and in the
case of an unlisted trust, that the REIT securities of the trust are
correctly priced;
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 (q) not to misuse information or knowledge gained in its capacity as a
REIT manager or to use its position as REIT manager to gain an
improper advantage for itself or another party or to gain a direct or
indirect advantage for itself or another person or to otherwise cause
detriment to REIT securities holders;
(r) convene or cause the trustee to convene meetings of REIT securities
holders whenever required by the Act, these Regulations or the trust
deed;
(s) not enter into any contract, agreement or arrangement which is in
conflict with or purports to override any term or obligation of the
trust deed, the Act or these Regulations; and
(t) where the Act or these Regulations impose a specific requirement,
obligation or duty on the REIT manager, this will be reflected in the
trust deed by way of a specific covenant by the REIT manager.

15. Joint covenants of trustee, promoter and REIT manager.

The trust deed, as a minimum, shall contain the following joint covenants by
the trustee and REIT manager for the benefit of each of the REIT securities
holders as beneficiaries, including past and future REIT securities holders, the
trustee and the REIT manager and any subsequent trustee or REIT manager
to—
(a) comply with and implement the requirements of the trust deed, the
Act and these Regulations and to undertake their roles and act in the
best interests of the REIT securities holders to fulfil the objectives
of the trust deed;
(b) where the trust is to be listed, to ensure that at all times each of the
trustee and the REIT manager individually and jointly use their best
endeavours to list and to maintain the listing of the scheme on the
designated exchange; and
(c) comply with the connected persons obligations of the trust deed, the
Act and Regulations to avoid any conflict of interest and ensure that
neither the REIT securities holders nor the trust are disadvantaged
by any transactions entered into.

16. Income and capital gains entitlements and distributions.

The trust deed shall set out particulars of—
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 (a) the distribution policy of the scheme;
(b) the entitlements of various classes of REIT securities holders to
distributions of income, profits, capital gains or capital or from other
sources;
(c) the REIT manager and trustees obligations under the Act and these
Regulations in relation to distributions and the discretion to vary
distribution from the minimum specified under these Regulations
and the implications of not making a minimum distribution.
17. Initial issue of reit securities.
In making a decision as to the type of REIT and whether or not the REIT
securities are to be listed, the trust deed shall provide for—
(a) the issue of REIT securities;
(b) the issue of certificates and registration;
(c) the circumstances in which repurchase or redemption may be
required or sought and the REIT securities holder’s rights and any
period in which repurchase or redemption cannot be sought or the
trustee’s or REIT manager’s right to defer or suspend repurchase or
redemption; and
(d) unlisted REIT securities full particulars of pricing policy and the
basis of calculation and regularity of re-pricing.

18. New issues of REIT securities.

In making a decision as to the type of REIT and whether or not the REIT
securities are to be listed, the trust deed shall provide for—
(a) the powers and procedures to be adopted in order to issue new REIT
securities;
(b) the entitlement of existing REIT securities holders to participate in
a new issue; and
(c) the pricing of the new issue.

19. Right to redemption of units of reit securities.

(1) The trust deed shall clearly set out whether or not the holder of REIT
securities has any right to request the trustee through the REIT manager to
redeem it’s holding of REIT securities in whole or in part.
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 (2) Where there is no right to request redemption, a caution shall be
clearly stated in bold, that, “the REIT securities’ holders are not entitled to seek
redemption.”
(3) Where the trust deed does not provide for redemption, it shall set out
exceptions to acquiring redemption as follows—
(a) the terms on which redemption can be sought including deferral
periods, preconditions, trigger events, number, notice periods and
redemption dates;
(b) the process and procedure for seeking redemption;
(c) the manner in which units are to be valued and the calculation of the
redemption price; and
(d) the ability of the trustee or the REIT manager to limit, suspend or
cancel redemptions.

20. Appointment of valuers and valuation of assets.

The trust deed shall clearly set out—
(a) the requirements for appointment of valuers and the obligations to
conduct valuations in accordance with the minimum requirements
of the Act and these Regulations;
(b) the powers and obligations of the trustee and REIT manager in
relation to the appointment of valuers and the conduct of valuations;
and
(c) the discretion of the trustee to conduct a valuation in the interest of
REIT securities holders, and specifically address the requirements
in the case of connected person transactions.
21. Trustee’s costs, fees and expenses.
The trust deed shall clearly set out—
(a) the trustee’s entitlement to fees and to receive reimbursement or
charge expenses and costs to the trust;
(b) the method of calculation of the trustee’s fees and basis of payment;
(c) the entitlement of the trustee to be paid fees, costs and expenses in
priority to any other payment;
(d) the obligation of the trustee to defer or suspend receipt of fees; and
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 (e) the trustee’s entitlement to an indemnity for fees, costs and expenses
incurred.
22. REIT manager’s costs, fees and expenses.
The trust deed shall clearly set out—
(a) the REIT manager’s entitlement to fees and to receive
reimbursement or charge expenses and costs to the trust;

(b) the method of calculation of the REIT manager’s fees and basis of
payment;
(c) the priority accorded to the payment of the REIT manager’s fees,
costs and expenses;
(d) the obligation of the REIT manager to defer or suspend receipt of
fees; and

(e) the entitlement to an indemnity for fees, costs and expenses

incurred.
23. Amendments to scheme documents.
The trust shall set out the process and procedure to be adopted in order for
amendments to be made to scheme documents.

24. Connected person transactions.

The trust deed shall set out in detail the powers and obligations of the trustee
and the REIT manager, subject to the requirements of the Act and Regulations,
to enter into transactions with connected persons and the process and procedure
to be adopted which shall include—
(a) the requirement to call a meeting of REIT securities holders; and
(b) the voting arrangements and the limits imposed on the ability of
connected persons who are also REIT securities holders to vote at
such a meeting.

25. Meetings of REIT securities holders.

The trust deed shall set out—

(a) the obligation to convene an annual meeting of REIT securities

holders and the rights of the REIT securities holders at the meeting;
and
154
 (b) the obligation, process and procedure for calling meetings by the
Authority, trustee, REIT manager and REIT securities holders.

26. Transfers and restrictions on transfers.

The trust deed shall include the process and procedure for transfers and in
making a decision as to the type of REIT and whether or not the REIT
securities are to be listed, the trust deed shall provide for—

(a) the rights to transfer units;

(b) the trustee’s obligation to register a transfer; and

(c) the restrictions on transfer, requirements for evidence of

qualification and the trustee’s obligation and powers not to register
a transfer.

27. Possible future conversion from D-REIT to I-REIT or issue of

prospectus to permit issue or offer.
(1) Where the REIT is a D-REIT the trust deed may include provisions
relating to the rights or obligations of the REIT manager to request the trustee
to exercise the conversion rights as provided in these Regulations.
(2) Where provision is to be made for conversion, the trust deed shall set
out the process and procedure to be adopted and the rights of REIT securities
holders.

28. Termination and winding up of the trust

The trust deed shall contain detailed provisions in relation to termination and
winding up of the trust and shall include details of -
(a) the circumstances in which the trust may be terminated or wound
up;
(b) the rights of REIT securities holders to call for termination or
winding up;
(c) the requirement for calling of meetings and voting rights;
(d) the distribution of the assets and priority of distribution; and
(e) the payment of expenses and provision of indemnities.
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 Schedule 3 - FORMS

FORM -1

APPLICATION FORM
Reg. 17

THE COLLECTIVE INVESTMENT SCHEMES (REAL ESTATE

INVESTMENT TRUSTS) REGULATIONS, 2016

AUTHORISATION AS A REAL ESTATE INVESTMENT TRUST

SCHEME
_______________________________________________________________

An application for authorisation of a REIT scheme shall be submitted jointly

by the promoter and the trustee*.

Please include the information listed below (separate sheets may be attached
where necessary):

1. Name of the REIT.

2. State—
(a) whether the authorisation is being sought as a D-REIT or an I-
REIT;

(b) whether the REIT is structured as a closed ended fund; and

(c) if the REIT is to be an I-REIT and shall accordingly be the subject

of a restricted offer

3. State in summary, the objectives of the REIT.

4. State the name, telephone number, facsimile email address and

registered office of the following parties and where a party is yet to be
appointed, give details of the party proposed for appointment—
(a) the promoter or issuer, directors and CEO;
(b) the transaction adviser;

156
 (c) the trustee, the directors, CEO and the designated representative
or compliance officer;
(d) the REIT manager, directors, CEO and the designated
representative or compliance officer;
(e) the property manager; (where applicable)
(f) the structural engineer;
(g) the project manager certifier; (where applicable)
(h) the auditor and any reporting accountant;
(i) the valuer; and
(j) the legal adviser.

5. Please attach the following in support of the application:

(a) prior consents and approvals where these are required by the Act
or the Regulations;
(b) the Trust Deed or draft Trust Deed;
(c) a draft Prospectus or an Information Memorandum;
(d) Management Services Agreement with the REIT manager or the
proposed agreement;
(e) agreements with the property manager or the proposed agreement;
(f) agreements with the property manager certifier or the proposed
agreement;
(g) certified copies of the valuations of the real estate vested in or to
be vested in, acquired or transferred to the REIT;
(h) signed and dated legal opinion on the title of the real estate vested
in or to be vested in, acquired or transferred to the REIT;
(i) a certified copy of the report of the structural engineer;
(j) audited financial statements of the REIT manager for the financial
year immediately preceding the application for authorisation;
(k) audited financial statement of the trustee for the financial year
immediately preceding the application for authorisation;
(l) consents of experts to inclusion;
(m) certified copies of any other scheme documents and material
contracts; and

157
 (n) proof of payment of the prescribed application fee.

Dated at ………… this…………… day of…………............. 20….

…………………………………. …………………………………
PROMOTER TRUSTEE

STATUTORY DECLARATION

We ………………………………………… as directors of
………………………… Limited and ………………..….. Limited, being the
promoter and trustee respectively of the proposed REIT scheme, do depone and
state that we have read and understood the requirements of this application
form and hereby certify under oath that the foregoing answers, statements and
annexures thereto are true and correct to the best of our knowledge, information
and belief.

SWORN at……………… this…………. day of…………………. 20………

BY:

…………………………………. …………………………………
PROMOTER TRUSTEE

BEFORE ME:

………………………………………….
COMMISSIONER FOR OATHS

*The material submitted shall be in two indexed binders. The pages of all
documents submitted shall be numbered and a check list provided which
corresponds to the relevant requirements of the Act, these Regulations and
the applicable Schedule addressed.

158
 FORM -2

Reg. 19(3)

THE COLLECTIVE INVESTMENT SCHEMES (REAL ESTATE

INVESTMENT TRUSTS) REGULATIONS, 2016

AUTHORISATION CERTIFICATE

The CAPITAL MARKETS AUTHORITY hereby certifies that

…………………………………………………………………………………

………………………………………………………………………….……….
has received authorisation as a Real Estate Investment Trust Scheme under sections
30, 31 and 84 of the Collective Investment Schemes Act, 2003 and the Collective
Investment Schemes (Real Estate Investment Trusts) Regulations, 2016.
CONDITIONS:
……………………………….
……………………………….
……………………………….

Dated this ……………. day of …………………………… 20…….

……………………………………………….
SEALED with the common
seal of the Capital Markets
Authority in the presence of:

………………………………… ……………………………….
Chairperson Chief Executive

NB: Please note that the above authorisation should not be construed as a
recommendation as to the merits of the above scheme and the
Authority shall not be liable for any action as a result of this
authorisation.
159
 FORM -3

Reg. 25(2)(a)
THE COLLECTIVE INVESTMENT SCHEMES (REAL ESTATE
INVESTMENT TRUSTS) REGULATIONS, 2016

CONTENTS OF PROSPECTUS OR INFORMATION

MEMORANDUM

1. Application.
The provisions of this form apply to all issues and offers of REIT securities
which fall under the Act or the Regulations and apply irrespective of whether
the issue or offer is made pursuant to a Prospectus or an Information
Memorandum.

The assets to be included in real estate investment trust scheme and the
activities of the scheme may vary significantly. Consequently, there is a need
for flexibility in what is required to be disclosed. It is, however, the obligation
of the issuer, the trustee and experts whose reports are contained or summarised
in the Prospectus or Information Memorandum to ensure that there is full,
adequate and proper disclosure to potential investors and REIT securities
holders and that the structure of the transaction and the terms of all the scheme
documents comply with the Act and the Regulations.

2. Consideration of type and financial education of potential investors.

In preparing the Prospectus or Information Memorandum consideration shall
also be given to the type and level of financial education of the persons to
whom the issue or offer is to be made; the level of disclosure required; the
language used, and the level of explanation provided.

3. Power of authority to grant exemptions or variations.

(1) The Authority may grant exemptions or permit variations from the
requirements of this Schedule where it is of the opinion that such
exemption or variation is required given the particular nature of
the assets or the activities of the real estate investment trust or
scheme or to address the conversion of a D-REIT to an I-REIT or
to permit a restricted I-REIT to be listed provided that such
exemption or variation will not disadvantage REIT securities
holders or potential investors in REIT securities.
160
 (2) The Authority may require inclusion of additional information or
material or the omission of information or material or other
changes be made to a Prospectus or Information Memorandum
and may impose conditions on its approval.

4. Reference to assets of a REIT.

A reference in this Schedule to assets being assets of the REIT means assets
vested, acquired, transferred or held or to be held by the trustee under the terms
of the trust deed for investors in REIT securities as REIT securities holders and
as beneficiaries of the real estate investment trust.

5. Minimum requirements.
This Schedule sets out minimum requirements for matters to be included in a
Prospectus or Information Memorandum. The requirements do not reduce or
in any way impact on the overriding obligations to provide disclosure as
provided for in the Act, the Regulations and the law of Uganda.

PART 1

GENERAL REQUIREMENTS, FOR ISSUER AND PARTIES

RESPONSIBLE.

1. The prospectus or information memorandum shall include—

(a) glossary of defined terms and abbreviations;

(b) table of contents;

(c) whether the REIT is a D-REIT or an I-REIT or issued in

connection with a D-REIT converting to an I-REIT or a restricted
I-REIT becoming unrestricted, etc;
(d) a clear statement of the persons to whom the offer is made or to
whom the issue of REIT securities can be made and of the
qualifications, if any, to be met in order for a person to invest;
(e) the objectives of the REIT;

(f) summary of the number, price and class of REIT securities being
issued or offered and the rights attached thereto;

161
 (g) summary of the transaction, REIT securities and key risks with a
cross reference to the pages of the Prospectus or Information
Memorandum which includes a warning in bold type-face that
this is only a summary and investors shall read and understand the
whole Prospectus or Information Memorandum;

(h) statement as to whether or not the REIT securities are to be listed

or not and whether or not a REIT securities holder can seek
redemption, the conditions attached to seeking redemption and
include a prominent warning to investors in bold type-face in
relation to the potential liquidity of the investment in REIT
securities;

(i) the on-going role of the promoter or other issuer and investment
in the REIT;

(j) the structure diagram which summarises the parties, relationship,

roles of parties and cash flows;

(k) a statement as to any financial structuring mechanisms utilised or

incorporated in the trust structure and the potential impact on
performance and on future distributions; and

(l) a summary of the obligations of the trustee and REIT manager

under the Act and the Regulations including eligible investments,
source of income and minimum distributions and the impact on
the taxation of the REIT or on distributions if these requirements
are not complied with.

2. All pages shall be consecutively numbered and a type-face of not less

than Times New Roman 10 points used.
3. The names, addresses and telephone numbers and email contacts of the
promoter or other issuer or offeror, of each person associated with the
issue or offer, the Prospectus or Information Memorandum or any part
thereof, and their functions and shall include—

(a) the Promoter or other issuer or offeror responsible for the issue
and the offer and where a company or corporation the directors of
such a person;
162
 (b) the transaction adviser;
(c) the trustee and the trustee’s directors, compliance officer and other
key personnel;
(d) the REIT manager and the REIT manager’s directors, compliance
officer and other key personnel;
(e) any property manager appointed or to be appointed by the REIT
manager;
(f) the structural engineer;
(g) any project manager certifier;
(h) the valuer appointed by the trustee;
(i) the auditor appointed by the trustee;
(j) the reporting accountant; (where applicable)
(k) the REIT securities registrar;
(l) the legal adviser appointed by the trustee; and
(m) other experts and advisers whose names appear in the Prospectus
or Information Memorandum or who have been appointed.

4. In all cases the Prospectus or Information Memorandum shall contain on

the cover and in a prominent position in the document the words:

“In making your investment decision to invest in REIT securities you

should be aware that there is very limited, if any, recourse to the assets
of the issuer or the trustee.

Your investment in REIT securities and as a REIT securities holder in

the REIT is as an equity investor. Distributions and return of capital is
not guaranteed and are entirely dependent on the performance of the
assets of the real estate investment trust.

Your rights in most cases will be limited solely to the assets of the real
estate investment trust.

If the trustee is authorised to borrow on behalf of the trust, then your

rights to distributions and to the assets will rank after the payments to
lenders.

163
 The trustee, REIT manager and other parties are also entitled to receive
payment of fees and expenses ahead of payments to REIT securities
holders who invest in REIT securities.”

5. The date of publication of the Prospectus or Information Memorandum

and the period for which the offer is open and how applications can be
made. A statement that no REIT securities can be issued based on this
Prospectus or Information Memorandum more than six months after the
stated date of the publication of the Prospectus or Information
Memorandum.

6. A statement that the scheme has been authorised by the Authority but
that authorisation by the Authority is not a recommendation or a
statement by the Authority in relation to the suitability of the REIT for
investment or as to the risks and that the Authority has no liability.

7. A statement that the Prospectus or Information Memorandum has been

approved by the Authority and the limitation on the liability of the
Authority but that approval by the Authority is not a recommendation or
a statement by the Authority in relation to the suitability of the REIT for
investment or as to the risks and that the Authority has no liability

8. Include a statement in the following words:

“If you are in any doubt about the contents of this document or the
nature or the transaction or investment or the risks attached to the
investment then you should consult a person licenced under the Capital
Markets Authority Act, Cap 84 and the Collective Investment Schemes
Act, 2003 who specialises in advising on investments in or acquisitions
of securities, including REIT securities in schemes.”
9. A statement as to the full accountability for liability for statements and
misrepresentations included in the Prospectus or Information
Memorandum and omissions by the promoter, issuer and the liability of
other parties and experts for statements made by them and inclusions,
misrepresentations and omissions.
10. Include a statement, signed by each of, the directors of the issuer or
offeror, the transaction adviser and the legal adviser appointed by the
trustee to act on behalf of REIT securities holders that:
164
 (a) the Prospectus, Information Memorandum and the scheme
documents comply with the Act and the Regulations, and
(b) in the case of the issuer and the directors of the issuer that they,
collectively and individually, and having made all reasonable
enquiries confirm to the best of their knowledge and belief, that
there are no false or misleading statements or omissions of other
facts which would make any statement in the Prospectus or
Information Memorandum false or misleading.

PART 2

THE STRUCTURE OF THE TRANSACTION, THE TRUST, THE

FUND, SCHEME & NATURE OF THE REIT SECURITIES BEING
ISSUED OR OFFERED AND OBJECTIVES

1. An explanation of the nature of the investment being offered as REIT

securities in the form of units in a trust established as a REIT and an
authorised real estate investment trust scheme authorised by the
Authority, including—
(a) an explanation of the nature of a trust and the respective roles of
the trustee and the REIT manager;
(b) detail of the REIT securities being issued or offered, their class
and the rights attached thereto and restrictions on the persons to
whom an issue or an offer can be made;
(c) details of any restrictions on the transferability of REIT securities;
(d) the term of the trust;
(e) whether the trust is to be open or closed and the implications;
(f) listing and redemption rights and entitlements;
(g) the classification as either a D-REIT or an I-REIT or as a D-REIT
converting to an I-REIT or a restricted I-REIT converting to an
unrestricted I-REIT;
(h) the objectives of the trust and of the scheme;
(i) a brief description of the investment strategy of the REIT manager
to meet the objectives of the fund and the scheme;
(j) the number and price of the REIT securities being issued or offered;
165
 (k) the use to be made of the proceeds of the issue or offer;
(l) how an application for REIT securities can be made and the
closing date for applications; and
(m) the costs, fees and charges associated with the establishment of the
REIT and the scheme and by whom these are to be paid.

2. Include details of the requirements for continuing as an authorised real

estate investment trust scheme and the requirements including those
relating to investment in eligible assets, income and distribution of the
Act and these Regulations and the taxation implications for the scheme
and on implications for failure to comply.

PART 3

ELIGIBLE ASSETS OF THE TRUST AND PROPOSED

ACTIVITIES OF THE SCHEME

1. Include a summary of the eligible or permitted assets of the specific

REIT including restrictions and the focus and objectives of the fund and
the scheme. These must comply with the Act and the Regulations but
may impose additional restrictions on the sectors or type of assets that
the trustee is authorised to invest in and the activities of the scheme,
including the trustee’s power to borrow and the level of development and
construction activities that an I-REIT may engage in.

2. Detail the assets vested in the trust, when and from whom acquired or
transferred and the price paid and if not in cash the consideration paid,
including by way of issue of REIT securities or otherwise.

3. Include details of the real estate assets that it is proposed to invest in or

the initial development and construction activities that it is initially
proposed to engage in. These shall be supported by—

(a) valuations and structural engineer’s reports to be summarised in

the Prospectus or Information Memorandum,

(b) copies of the valuations and reports shall be included in the list of
documents available for inspection; and

166
 (c) summarised details of the legal opinion in relation to transfer or
acquisition of the real estate and the title shall be included in the
Prospectus or Information Memorandum with full copies
available for inspection.

4. Detail the strategy of the REIT manager in implementing the objectives.

5. Where the REIT is a D-REIT, the following shall be provided in detail:

(a) The development and construction activities to be undertaken and
the budget and estimates for undertaking such activities.
(b) Consents and approvals to be obtained and the time frame for
such.
(c) The time frame over which the total development and construction
activities are intended to be conducted.
(d) The REIT manager’s strategy as to sale or lease of the completed
properties or a combination of both and the time frame until it is
anticipated that cash flows will be generated.
(e) Any foreign exchange exposure, for example, as regards the
acquisition of any plant or equipment or building materials.
(f) Any structural engineer’s report or of a quantity surveyor or of
any project manager.

6. Details of permitted non-real estate assets and restrictions on investment

and REIT manager’s strategy as regards such investment.

7. Risk management strategies to be employed by the REIT manager.

8. If the REIT is an I-REIT but proposes undertaking development and

construction activities within the limit provided for in the Act and
Regulations detail the development and construction activities to be
undertaken, consents and approvals required, and the budget and
estimates for undertaking such activities and the time frame over which
such activities shall be conducted and the time frame until it is
anticipated that cash flows will be generated and the potential impact of
delays or cost increases on the performance of the scheme and on
distributions and the exposure, if any, to foreign exchange risk.

167
9. Include details of the level of borrowings and the assumed terms and
interest rates.

10. Include details of the limitations contained in the Act and Regulations
depending on the classification of the REIT, on borrowing levels and on
the REIT manager’s strategy on borrowings and level of gearing of the
assets of the REIT.
11. Include a statement that material changes can only be made to the
objectives and eligible assets of the REIT if authorised by the Act and
the Regulations and approved by the REIT securities holders.

PART 4

THE REIT MANAGER AND PROPERTY MANAGER

1. Provide details of the REIT manager including, the directors and key
personnel and their experience in the management of property and
resources and experience in the conduct of development and
construction activities.
2. Outline the role of the REIT manager and its obligations as a fiduciary
to REIT securities holders.
3. Detail how the REIT manager proposes to fulfil its role and obligations
and appointments of agents, including a property manager or structural
engineer or project manager, or delegations it has made or it proposes to
make.
4. Policy on the making of recommendations to the trustee of distributions
and the implications of a lower than the prescribed minimum distribution
being made.
5. Include details of any property manager and its experience and of the
fees to be paid to any property manager by the REIT manager.
6. Include as an Appendix the last audited accounts of the REIT manager
and any property manager.

7. Include details of the term of the appointment, rights to reappointment,

rights to resign and the rights to remove the REIT manager and its rights
to fees and to payment or reimbursement of expenses.
168
8. Include a statement as to the REIT manager’s prior or any ongoing
association with the promoter, issuer or any other party associated with
the REIT or the real estate assets transferred or to be acquired and its on-
going connections or roles.

PART 5

THE TRUSTEE

1. Details of the trustee including directors, name of its chief executive

officer and of the compliance officer.
2. Include details of the trustee’s experience, resources and its other key
personnel.
3. Include a description of the trustee’s role, duties, responsibilities and
obligations as a fiduciary and its powers.
4. Disclose the trustee’s powers to recommend a lower distribution and the
implications of a lower than the prescribed minimum distribution being
made.
5. Disclose any potentially conflicting or competing roles and detail any
current, pending or threatened litigation against the trustee which might
materially affect the resources or financial capacity of the trustee to fulfil
its role or responsibilities as the trustee of the REIT.
6. Include as an Appendix the last audited accounts of the trustee.

PART 6

KEY TERMS OF THE TRUST DEED AND SCHEME DOCUMENTS

1. A summary of the key aspects of the trust deed shall be included. This
summary shall as a minimum include details of- (where the required
details have been disclosed elsewhere in the document then a cross
reference may be included in this Part)

(a) the trustee’s, REIT manager’s, valuers’, auditor’s and structural

engineers and any project manager’s roles, responsibilities and
obligations;

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 (b) the liabilities of the trustee and REIT manager and the invalidity
of any purported limitation on fiduciary liability;
(c) the powers of the trustee and REIT manager;
(d) the requirement to appoint and provisions relating to the removal,
retirement or replacement of—
(i) the trustee;
(ii) the REIT manager;
(iii) an auditor;
(iv) valuers;
(v) structural engineers; and
(vi) project manager.

(e) the obligation to conduct valuations and frequency of valuations;

(f) the obligation to call meetings and the rights of REIT securities
holders to call meetings and receive reports and financial
statements;
(g) the rights of REIT securities holders, including limitations of
those rights and decisions or actions requiring the approval of
REIT securities holders;
(h) the requirements for listing; (where applicable)
(i) the rights and limits on the ability to call for or to obtain
redemption of REIT securities;
(j) the circumstances in which connected persons are not permitted to
exercise voting rights in respect of REIT securities held by them;
(k) the maximum fees and charges permitted by the trust deed and
payable by investors either directly or indirectly or out of the
assets of the trust;
(l) the permitted expenses, costs and charges payable out of or
reimbursable from the assets of the fund; and
(m) the termination or winding up of the trust and scheme.

2. Shall include a summary of the material terms of other scheme

documents including any documents appointing or governing the
relationship with the REIT manager or any other party or adviser or
underwriter.

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 PART 7

THE ASSETS, VALUATIONS & BASIS OF VALUATION &

HISTORIC INFORMATION ON THE INCOME & EXPENSES
ASSOCIATED WITH THE ASSETS

1. Include all the details of the real estate and other assets vested or to be
vested in acquired or transferred to the REIT within the first year and the
proposed dates of vesting, transfer or acquisition.

2. The implications, under regulations 66 or 78 on the failure to invest

within one hundred and eighty days should clearly be set out.

3. The details required will vary significantly depending on the nature of

the assets and the real estate sector. For example, the considerations for
investment in office buildings will be largely determined by the market
for office accommodation and the state of the economy, this contrasts
with real estate investments in, for example, residential housing,
hospitals, hotels, retail shopping malls, factories or storage or ports or
other sectors. In each case the key drivers will vary and the information
disclosed will need to be adapted. By way of an example only the
Prospectus or Information Memorandum shall include—

(a) title particulars of real estate;

(b) details of any encumbrances, easements or restrictions on use;

(c) confirmation that the REIT owns or will own on completion of the
vesting, transfer or acquisition the whole of each real estate asset
or if not detail extent and confirm compliance with the
requirements of the Act and Regulations;

(d) description of any buildings or fixtures erected on any land

together including age, with details of the structural engineer’s
report on the real estate, including details of monies which the
structural engineer estimates need to be spent on the real estate
assets in order to being them to a reasonable state of repair
together with estimates of ongoing maintenance requirements for
and costs;
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(e) photographs may be included but these shall be not more than six
months old;
(f) details of the price for which the property was acquired or the
value of the consideration and the terms of any vesting, transfer or
acquisition or proposed, including the issue of REIT securities and
the basis on which the price paid or consideration provided was
determined;
(g) a copy of the structural engineer’s report shall be included in the
documents available for inspection;
(h) details of current usage and permitted usage for each property and
lettable area or other relevant metric;
(i) if the real estate vested in or to be acquired by or transferred to the
REIT is currently leased, the following details shall be required—
(i) existing and contracted tenancies including, area tenanted,
number of leases, term for each lease, an expiry profile for
leases as a whole, gross rental income and concentrations,
details of rent reviews and occupancy rates for prior three
years (where applicable),
(ii) historic vacancy factors,
(iii) the levels of rent relative to the current market,
(iv) revenues received for the past three years where available,
(v) rents in arrears or written off,
(vi) the operating costs including, maintenance,
(vii) provision of depreciation, amortization of assets or for
replacement of capital, and
(viii) profit before and after tax.
(j) where the transaction involves a sale and lease back or there is a
lease to the promoter or other connected party then details of the
basis of ascertaining the rental and an estimate from the principal
valuer of the market rent;
(k) if the real estate vested in or to be acquired by or transferred to the
REIT is not currently leased is proposed to be leased then details
of the estimated gross rental and terms and an estimate from the
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 principal valuer of the market rent and an estimate of the time
required and fees, costs and expenses estimated to be incurred in
order to lease the real estate; or
(l) in the case of real estate being acquired or transferred:
(i) the stage of acquisition or transfer;
(ii) from whom it is being acquired or transferred;
(iii) conditions and terms of the acquisition or transfer including
price or other consideration;
(iv) scheduled date for completion; and
(v) details of the valuations.

4. Where a REIT is a D-REIT or is an I-REIT that proposes to undertake

development and construction activities the Prospectus or Information
Memorandum shall include—

(a) details of the real estate on which the development or construction

is to be undertaken;

(b) details of the price for which the property was acquired or the
value of the consideration and the terms of any vesting, transfer or
acquisition or proposed, including the issue of REIT securities and
the basis on which the price paid or consideration provided was
determined;

(c) details of the project including intended usage of the real estate on
completion and the property manager’s strategy for marketing the
real estate or acquiring tenants;

(d) a detailed description of the development or construction to be

undertaken and of any report or estimates by the project manager;
(e) details of approvals and consents required and the time frame for
obtaining;
(f) a budget, work plan and time-frame to undertake the development
and construction together with details of all consents and approval
required and costings;
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 (g) an assessment from the structural engineer and the project
manager as appropriate as to whether or not it considers the
budget and costings for the development and/or construction are
reasonable; or
(h) an assessment by the REIT manager of the market to sell or lease
up the real estate when completed together with any expert
assessments of the market.

5. A table reflecting the objectives and classification of the REIT that sets
out the key assumptions underlying any projections included in the
Prospectus or information Memorandum and a sensitivity analysis of the
impact on income, earnings, profits and distributions to implement the
assumptions and shall include—

(a) failure to let up to assumed level within the scheduled time;

(b) failure to achieve assumed rents;
(c) cost over runs for development and construction;
(d) time overruns for development and construction;
(e) changes in interest rates;
(f) the impact of any financial structuring; and
(g) any other material factors.

6. Details of the valuations obtained in respect of the real estate and other
assets vested in or proposed to be acquired by or transferred to the REIT
including basis of valuation.

7. The date of each valuation and the basis of valuation.

8. Policy in relation to revaluations and requirements of the Act and these

Regulations for revaluations.

9. Where the trust deed authorises the trustee of the REIT to invest in non-
real estate assets detail the investments in which the trustee is authorised
to invest, the investment strategy and trading policy that the REIT
manager proposes to adopt and the timing of valuations and basis of
valuation.

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 PART 8

APPOINTMENT AND ROLE OF STRUCTURAL ENGINEER AND

PROJECT MANAGER CERTIFIER
1. Details of the structural engineer including details of experience,
resources and key personnel.
2. Include a description of the structural engineer’s role, duties,
responsibilities and obligations.

3. Disclose any potentially conflicting interests or competing roles.

4. Details of the appointment of any project manager certifier including,

details of experience, resources and key personnel.

5. Include a description of the project manager certifier’s role, duties,

responsibilities and obligations.
6. Disclose any potentially conflicting interests or competing roles.

PART 9

THE ROLE OF THE PROMOTER OR ISSUER AND ONGOING

RELATIONSHIP AND HOLDINGS OF REIT SECURITIES,
INCLUDING LOCK-UP PERIODS

1. Provide details of the promoter or issuer.

2. Include details of any property vested or to be transferred or acquired by
the REIT and details of the price paid in cash or REIT securities or other
consideration or of value attributed.
3. Include a summary of the requirements under the Act or these
Regulations for the promoter to maintain an investment in REIT
securities in the REIT.
4. Include details of the percentage and value of REIT securities held or to be
issued to the promoter and obligations as regards retention and lock up periods.
5. Provide details of the ongoing relationship of the promoter or of persons
connected with the promoter with the REIT and proposed roles,
including any option or right of first refusal to acquire real estate assets.
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6. Details of the promoter’s capacity, if any, to fund overruns and to receive
additional REIT securities as a consequence. Unless the promoter has
undertaken to fund any cost overruns then it should be clearly stated in
bold type that the promoter may but has no obligation to fund cost
overruns.

PART 10

CONNECTED PARTY TRANSACTIONS

1. Include details of any existing relationships and potential conflict of

interest situations together with the steps taken to address such conflicts
or potential conflicts and any proposed connected party transactions
including roles to be undertaken by connected persons, e.g. as REIT
manager.

2. Detail the processes to be adopted to address potential conflicts of

interest and in particular conflicts with connected persons.

3. Detail the rights of the REIT securities holders to vote on proposed

connected person transactions.

PART 11

KEY DATA AND MARKET

1. Key information shall be included on the real estate market in which the
REIT proposes to invest.

2. The data that is relevant will vary significantly depending on the sector
of proposed investment and classification of the REIT and the activities
in which it proposes to involve. Data might include but not be limited
to, brief information on the following and references to—

(a) relevant details on supply and demand in the market for real estate
in specified locations;
(b) price trends;
(c) Rental property supply and demand in specified locations;
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 (d) rent trends;
(e) impact of the economy on demand for real estate, real estate prices
and rents;
(f) key drivers of the income from the sector being invested in or on
capital gains or profits from sale; and
(g) Government policies and their impact.

PART 12

DETAILS OF ANY FINANCIAL STRUCTURING INCORPORATED

OR TO BE INCORPORATED IN THE SCHEME AND POTENTIAL
IMPACT ON PERFORMANCE OF SCHEME AND FUTURE
DISTRIBUTIONS

Provide as required by the Act and these Regulations details of any financial
structuring as required by regulation 37.

PART 13

RISKS
1. The Prospectus or Information Memorandum shall contain information
on the risk factors relating to investment in REIT securities. The risks
disclosed shall include the risks—

(a) generally of investment in REIT securities;

(b) associated with the particular REIT given its structure,
classification and objectives and strategy; and
(c) specifically associated with the investment portfolio or assets of
this REIT and its objectives and proposed activities.

2. Risks, where possible, shall be listed based on potential severity

and impact.
3. Where appropriate and possible a sensitivity table or other method
for quantifying the risk and its potential impact shall be included.
4. For major risks any mitigating factors or risk management mechanisms
employed or proposed by the REIT manager shall be disclosed.
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 5. Disclaimers included shall not be so wide as to cause the
disclosure of the risks to be of little or no benefit to investors in
REIT securities.

PART 14

TRUSTEE’S POWER TO BORROW ON BEHALF OF THE TRUST

AND CHARGE OR PLEDGE ASSETS AS SECURITY

Provide details of:

(a) The trustee’s powers under the trust deed to borrow or raise
finance for the purposes of the trust and to provide security for
such borrowing by charging or pledging the assets of the REIT.
(b) Limits contained in the Act or these Regulations on the trustee’s
powers.
(c) Circumstances, if any, in which REIT securities holder may be
required to vote to approve a borrowing by the trustee.
(d) The implications of the trustee exceeding the limits in the Act or
these Regulations or the limits set out in the trust deed.

PART 15

EXPERTS OPINIONS AND LEGAL OPINIONS

1. The Prospectus or Information Memorandum shall include a summary of

any opinions obtained from experts or upon which the promoter or issuer
has placed reliance for statements made in the Prospectus or Information
Memorandum and the reports shall be included in the list of documents
available for inspection.
2. Details of the legal opinion obtained by the trustee in relation to the title
of any real estate asset vested in or to be acquired by or transferred to the
REIT, compliance with the Act and these Regulations and in respect of
any other matters required by the trust deed, the scheme documents, the
Act or these Regulations.
3. Where a Prospectus or Information Memorandum contains a summary
of or excerpt from an expert’s report, the complete report of which is

178
 included as an additional document available for inspection then there
shall also be included a statement from that expert stating whether or not
the report was prepared for inclusion in the Prospectus or Information
Memorandum and whether or not the summary or excerpt accurately
reflects their opinion and is relevant in the context in which it is used.
4. All experts’ reports shall be signed by the expert and dated not more than
ninety days prior to the date of publication of the Prospectus or
Information Memorandum. Reports may be updated by the expert
confirming that the opinion is unchanged and is still relevant.
5. Experts’ opinions that include disclaimers that are so wide that the report
is of little or no value to potential investors in REIT securities may be
misleading and shall not be included.

PART 16

FEES, COSTS AND EXPENSES

1. Include details of all fees, costs and expenses payable in respect of the
issue or offer of the REIT securities including underwriting fees and
amounts reimbursable to any party, the manner of calculation together
with details of who is responsible for the payment of such.
2. Provide details of all fees, costs and expenses payable by the trustee out
of the assets of the trust and the manner of their calculation.
3. Include a statement of the estimated MER of the REIT.

4. Provide details of the limits imposed by the Act or Regulations on the

charging of fees or the reimbursement of expenses.

PART 17

DISTRIBUTION POLICY AND FACTORS DETERMINING

DISTRIBUTION

1. Provide details of the distribution policy set out in the trust deed.
2. Include a statement of the requirements under the Act or these
Regulations to make distributions and of the impact of the failure to
make minimum distributions.
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3. Detail the powers and obligations of the REIT manager and the trustee
with respect to distributions and any requirements for a vote of REIT
securities holders.

PART 18

TAXATION, DISCRETION AS REGARDS DISTRIBUTIONS AND

IMPLICATIONS FOR TAXATION TREATMENT OF THE REIT AND
DISTRIBUTIONS
1. Provide details of the taxation treatment of the income, trading profit,
capital gains and profit of the REIT and of the taxation of distributions
including withholding tax obligations.
2. Provide details of any expert opinion obtained and addressed to the
trustee for the benefit of the investors in REIT securities to support the
conclusions set out in paragraph 1, above. The full opinion shall be
included in list of additional documents available for inspection.
3. Provide details of the circumstances in which such taxation treatment
could vary and in particular of the implications of failure to comply with
specific provisions of the Act or these Regulations.

PART 19

TRANSFERABILITY OF REIT SECURITIES, LISTING AND

REDEMPTION

Given the nature of the assets in which REITs invest the ability of the REIT
manager to provide for redemptions is in most circumstances extremely limited
and redemption may not be available or only available after the happening of
specified trigger events.
1. Include details of any restriction on the transferability of the REIT
securities.
2. Include details of the intention to list the REIT securities on a securities
exchange and the persons who can trade on such an exchange.
3. Where there is no right to request redemption then this fact should also
be stated in bold type and include a caution that the REIT securities’
holders are not entitled to seek redemption.
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4. Where redemption is provided for then include an explanation of how
the REIT manager and the trustee are to fund redemptions and their
powers to limit or freeze redemptions.
5. Where there is an ability to seek redemption then the trust deed should
clearly set out the—
(a) terms on which redemption can be sought including, deferral
periods, preconditions or trigger events, number, notice periods
and redemption dates;
(b) process and procedure for seeking redemption;
(c) manner in which units are to be valued and the redemption price
is to be calculated; and
(d) the ability of the trustee or the REIT manager to limit, suspend or
cancel redemptions.

6. Where REIT securities are not to be listed then a prominent warning in

bold type-face shall be included warning that the investment has limited,
if any, liquidity and drawing attention to the rights to redemption, if any,
or the lack thereof.

PART 20

ACCOUNTS, PRO FORMA ACCOUNTS AND FINANCIAL

STATEMENTS

1. All pro forma accounts and the pro forma financial statements included
shall be identified as being pro forma only and to be clearly labelled in
bold type-face as having been included for illustrative purposes only and
being based on a number of assumptions which may or may not
eventuate.

2. A statement shall be included that the pro forma accounts and balance
sheet have been prepared in accordance with IFRS.

3. Where forecasts are included based on assumptions then in addition to

the assumptions being clearly identified and highlighted a sensitivity
table or tables shall be included to indicate the implications of changes
in the key assumptions or variables.
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4. Any accounts or financial statements of the trustee or REIT manager
should be clearly labelled as such and a statement included in bold type
that the investor in REIT securities only has recourse to the assets of the
real estate investment trust and not to the assets of the trustee or the
REIT manager.

A. For newly formed I-REIT with income producing properties

1. Where a newly formed REIT has property vested in it or real
estate assets have or are to be acquired or transferred to the REIT
which assets have had an income stream then the Prospectus or
Information Memorandum shall include by way of illustration
only pro forma financial statements prepared on the assumption
that the REIT had been in existence for the three years
immediately preceding the date of the Prospectus or Information
Memorandum or if the real estate assets had not been income
producing for three years then for such lesser period.

2. The pro forma financial statements shall-

(a) be clearly identified as pro forma accounts prepared for
illustrative purposes only;

(b) be prepared based on IFRS and show the income and all
outgoings and expenses of the real estate assets including,
maintenance, capital works and depreciation or capital
allowances or permissible allocations to reserves or sinking
funds for the replacement of capital assets and include
estimates for fees and expenses that would have been
payable for, for example, trustee’s fees, REIT manager’s
fees, valuation costs and audit costs if the real estate assets
had been assets of the REIT during that period. Allowance
shall also be made for any costs of the establishment of the
REIT and for acquisition costs if these are to be borne by
the REIT; and

(c) clearly identify variations to take account of REIT specific

fees, charges, expenses and other adjustments.

3. Provision shall be made in the pro forma accounts for the payment
of the minimum distribution provided for in the Act or these
Regulations.
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 4. Where the I-REIT proposes to undertake any development or
construction activities within the first year after the date of the
Prospectus or Information Memorandum then the impact of such
activities on returns shall be illustrated through adjustments made
to the last year of the pro forma accounts. These adjustments and
the underlying assumptions on which they are based shall be
clearly identified.

5. The objective of the pro forma accounts is to illustrate the returns

that would have been received if the real estate had been assets of
the REIT for that period and an analysis of the performance of the
assets shall be included.

B. For a newly formed I-REIT with real estate assets a substantial

proportion of which have not previously been income producing

1. Pro forma accounts, for illustrative purposes only, based on

forecasts for the next year of operation, shall be included.

2. These shall be based on the reasonable expectations of the

promoter and REIT manager and there shall be clear identification
and differentiation of-

(a) known information based, for example, on leases entered

into, and existing contracts and finance charges;

(b) §assumed income and costs charges, expenditure and

provisions for e.g. depreciation etc. any proposed
development and construction costs and expenses including
allowances for over runs, and

(c) the underlying assumptions on which income or expenses are

based shall be clearly stated.

3. Provision shall be made in the pro forma accounts for the payment
of the minimum distribution provided for in the Act or these
Regulations.

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C. For a newly formed D-REIT with real estate assets in a development
and construction phase and a substantial proportion of which have
not previously been income producing
1. Include pro forma accounts, for illustrative purposes only, based
on forecasts for the next full year of operation.
2. These shall be based on the contracted work, known liabilities and
commitments, budgets and work plans for the period and the
reasonable expectations of the promoter and REIT manager and
there shall be clear identification and differentiation of-
(a) known information based, for example, on leases entered
into, and existing contracts and finance charges;
(b) assumed development and construction costs and expenses
including allowances for over runs, any income and costs
charges, expenditure and provisions for e.g. depreciation;
and
(c) the underlying assumptions on which costs income or
expenses are based shall be clearly stated.

D. For a D-REIT converting to an I-REIT or a restricted I-REIT which

proposes to become unrestricted

1. Include, for illustrative purposes only, a pro forma accounts based

on the three years prior audited financial statements prepared by
the trustee in respect of the REIT, adjusted only to take account of
the additional costs, if any, that would have been incurred if the
REIT had been an I-REIT or an unrestricted I-REIT for the period.

2. Provision shall be made in the pro forma accounts for the payment
of the minimum distribution, if any, provided for in the Act or
these Regulations.

E. Pro forma Financial Statements for all classifications of REITs

1. Include, for illustrative purposes only, a pro forma balance sheet

as at the projected date of the closing of the issue or offer and
adjusted for, as appropriate;

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 (a) vesting of assets and proposed contracted acquisitions;
(b) proceeds from the issue of REIT securities and proposed
use of funds;
(c) borrowings contracted or proposed to be entered into on
closing;
(d) contracted development and construction activities;
(e) other contractual obligations;
(f) requirements for minimum distributions, if any, provided
for in the Act or Regulations; and
(g) costs of acquisitions and the issue.
2. All adjustments and underlying assumptions shall be clearly
identified and highlighted.
3. The pro forma balance sheet shall be accompanied by a reporting
accountant’s or auditor’s letter confirming that it has been
prepared as a pro forma balance sheet in accordance with IFRS
and the accounting policies recommended by the REIT manager
and adopted by the trustee on behalf of the REIT.
PART 21
MEETINGS, REPORTS, ACCOUNTS AND REIT SECURITIES
HOLDER’S RIGHTS
1. The Prospectus or Information Memorandum shall include in
summary form details of:
(a) requirements for meetings and the rights or REIT securities
holders to require the calling of meetings;
(b) provisions as to notice required for meetings and
procedures and voting and the voting level required to pass
ordinary and special resolutions;
(c) list those matters which require a special resolution;
(d) list those matters which are required to be put to a vote of
REIT securities holders;
(e) REIT securities holder’s right to receive reports and
financial statements; and
(f) include a brief statement of the key rights of REIT
securities holders.
2. Where any matters required to be disclosed in this Part have been
included in another Part then they may be addressed in this part by
the inclusion of a cross-reference.
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 PART 22
ADDITIONAL INFORMATION

1. The Prospectus or Information Memorandum shall disclose any

additional information relevant to a potential investor in REIT
securities where the failure to include could constitute an omission
or lead to information contained being misleading.

2. In particular, there shall be full disclosure of all material contracts

(including contracts not reduced to writing).

PART 23
CONSENTS

1. The Prospectus or Information Memorandum shall include a

statement of consent from all relevant parties and from all parties
named in the document consent to their being named in the
document in the form and context in which it appears together
with the statement that they have not subsequently withdrawn
their consent.

2. Signed copies of consents, dated not more than thirty days prior to
the date of publication of the Prospectus or Information
Memorandum shall be included in the list of documents available
for inspection.

PART 24
DOCUMENTS AND ADDITIONAL DOCUMENTS AVAILABLE FOR
INSPECTION
1. The Prospectus or Information Memorandum shall contain a
statement that for a period of not less than three years from the
date of the approval of the Prospectus or Information
Memorandum by the Authority copies of the documents listed in
the Prospectus or Information Memorandum shall be available for
inspection at the registered office of the trustee or such other
address as the Authority may approve and subsequently shall be
made available by the trustee for inspection for a period of eight
years from the date of approval of the Prospectus on the giving of
fourteen days’ notice in writing to the trustee.
186
2. Documents shall include-

(a) the trust deed and any supplemental deeds;

(b) each contract disclosed in the Prospectus or Information
Memorandum (including agreements with the REIT
manager or any loan or funding agreements), and in the
case of a contract not reduced to writing, a memorandum
setting out the parties, date and full particulars;
(c) all valuation reports obtained in respect of the real estate
assets;
(d) structural engineer reports;
(e) any reports by any project manager certifier;
(f) legal opinions;
(g) expert reports;
(h) where applicable the audited annual and semi-annual or
interim reports and financial statements for the trust for
whichever is the later of the three years prior to the date of
approval of the Prospectus or Information Memorandum or
from the date of formation of the trust;
(i) audited financial statements for the trustee and REIT
manager for whichever is the later of the three years prior
to the date of approval of the Prospectus or Information
Memorandum or from the date of formation of the entity;
(j) all reports, letters, opinions or other documents and
statements by any expert, any part of which is extracted in
or summarized in or referred to in the Prospectus or
Information Memorandum and where an extract or
summary is included the corresponding full report shall be
made available for inspection;
(k) signed and dated consents given by any experts and copies
of any withdrawals of consents;
(l) underwriting agreements;
(m) any letters with any parties whether enforceable or not; and
(n) copies of any court orders or other documents relating to
court actions commenced against the trustee or the REIT
manager in the previous three years relating respectively, to
the conduct of their duties as a trustee or REIT manager.

187
 PART 25
ADDITIONAL MATERIAL TO BE INCLUDED WHERE A D-REIT IS
CONVERTING TO AN I-REIT

Where a Prospectus or Information Memorandum is being issued as part of the

process of conversion of a D-REIT to an I-REIT then the Prospectus or
Information Memorandum shall include-

(a) details of amendments or amendments proposed to be made to the

trust deed;
(b) all information that would have been required to be included in the
Prospectus or Information Memorandum for an I-REIT including
current experts’ reports;
(c) details of the audited annual and semi-annual or interim reports
and financial statements for the trust for whichever is the later of,
the three years prior to the date of the Prospectus or Information
Memorandum, or from the date of approval of the D-REIT;
(d) valuation reports for the later of the three years prior to the date of
the Prospectus or Information Memorandum or from the date of
approval of the D-REIT;
(e) compliance reports for the later of the three years prior to the date
of the Prospectus or Information Memorandum or from the date of
approval of the D-REIT;
(f) details of amendments proposed to the trust deed;
(g) details of all distributions made since the establishment of the D-
REIT, the percentage distributed and the source of the distribution;
(h) details of the taxation treatment of the D-REIT and of
distributions made;
(i) details of the periodic trustee compliance reports for the previous
three years;
(j) details of any legal action or proceeding commenced against or by
the trustee or the REIT manager in the previous three years or
which is current or has not been settled; and
(k) details of any action taken by the Authority or any other
government body or authority in respect of the scheme, the trustee
or the REIT manager or any auditor, valuer or structural engineer
of the REIT.

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 PART 26
ADDITIONAL INFORMATION TO BE INCLUDED WHERE A
RESTRICTED I-REIT IS CONVERTING INTO AN UNRESTRICTED
I-REIT TO BE LISTED AND NOT SUBJECT TO RESTRICTIONS

Where a Prospectus or Information Memorandum is being issued as part of the

process of conversion of a restricted I-REIT to a listed unrestricted I-REIT not
subject to restrictions then the Prospectus shall include, all information that
would have been required to be included in the Prospectus for an I-REIT with
unrestricted listing including-

(a) current experts reports;

(b) details of the amendments made or to be made to the trust deed;
(c) details of the audited annual and semi-annual or interim reports
and financial statements for the trust for whichever is the later of,
the three years prior to the date of the Prospectus or Information
Memorandum, or from the date of the original approval as an I-
REIT;
(d) valuation reports for the later of the three years prior to the date of
the Prospectus or Information Memorandum or from the date of
the original approval as an I-REIT;
(e) compliance reports for the later of the three years prior to the date
of the Prospectus or Information Memorandum or from the date of
the original approval as an I-REIT;
(f) details of amendments proposed to the trust deed;
(g) details of all distributions made since the establishment of the I-
REIT, the percentage distributed and the source of the distribution;
(h) details of the taxation treatment of the I-REIT and of distributions
made;
(i) details of the periodic trustee compliance reports for the previous
three years;
(j) details of any legal action or proceeding commenced against or by
the trustee or the REIT manager in the previous three years or
which is current or has not been settled; and
(k) details of any action taken by the Authority or any other
government body or authority in respect of the scheme, the trustee
or the REIT manager or any auditor, valuer or structural engineer
of the REIT

189
 PART 27
APPLICATION FOR REIT SECURITIES AND APPLICATION FORM

1. The Prospectus or Information Memorandum shall set out details

on how to apply for REIT securities and to complete the
application and include an Application Form.

2. The Prospectus or Information Memorandum shall specify the

minimum number and value of REIT securities that can be applied
for and detail the process to determine allocation and the
discretions, if any, vested in the issuer which shall include-

(a) to determine the number of REIT securities to be issued or

allocated to any applicant;
(b) to extend the closing date for the issue or offer; or
(c) to withdraw the offer in the event that a minimum
subscription is not reached.

3. Where the Information Memorandum relates to a D-REIT or an

issue or offer in respect of a restricted I-REIT then both the
Information Memorandum and the Application Form shall set out
the requirements for an investor to qualify as a professional
investor to whom the REIT securities may be issued or offered
and contain a warning that the REIT securities can only be
transferred to another qualified investor.

4. The Prospectus or an Information Memorandum shall state that

applications for REIT securities can only be made on the
Application Form attached to the Prospectus or Information
Memorandum.

5. An Information Memorandum shall comply with the Act and

these Regulations and any other laws of Uganda relating to the
issue or offer of securities to professional investors or to any other
person.

190
 FORM -4
Reg. 101 (3)

THE COLLECTIVE INVESTMENT SCHEMES (REAL ESTATE

INVESTMENT TRUSTS) REGULATIONS, 2017

CONTENTS OF SEMI-ANNUAL REPORT, ANNUAL REPORT AND

FINANCIAL STATEMENTS

1. Minimum standards
The semi-annual and annual report and financial statements for a REIT
scheme shall include all the information required by this Schedule;
comply with the provisions of the Act and these Regulations and of any
Approved Securities Exchange. The financial statements shall include,
as a minimum, a Statement of Financial Position (Balance Sheet), a
Statement of Comprehensive Income (Profit and Loss), a Statement in
Change in Equity and a Cash Flow Statement (Source and Use of Funds)
as well as a description of the accounting policies used and the relevant
notes to the financial statements and a report on other legal requirements

It is intended that the requirements of this Schedule represent the

minimum content required to be included in the reports of a real estate
investment trust scheme. Compliance with the schedule does not
remove or reduce the obligations of the trustee or the REIT manager,
auditor or any other party under the laws of Uganda.

Information may be included by way of tables, charts or graphs where

this assists in understanding.

Only photographs of assets actually owned by the REIT as at the date of

the report may be included and shall provide a fair representation of the
state of repair or stage of completion of the asset.
Where the reports of any experts, including valuers, or summaries of
their reports are included then the report shall also contain a letter of
consent signed by the expert to the inclusion of the report or the
summary in the report.
References in this Schedule to a REIT, D-REIT or I-REIT shall where
the context permits also include a reference to an investee company or
investee trust of the REIT, D-REIT or I-REIT as the case may be and the
requirement to disclose or include information shall extend to the
investee company or investee trust.

191
2. Compliance with accounting standards
In addition to meeting the requirements of this Schedule all reports and
financial statements shall be prepared under and comply with the
International Financial Reporting Standards and the International
Auditing Standards or such other the accounting standards and auditing
standards as are applying in Uganda from time to time.

3. General real estate investment trust scheme information

The report shall include:

(a) a table of contents and glossary of terms used in the reports.

(b) name of the REIT scheme.
(c) the date of authorisation of the scheme, the duration of the REIT
and the type of scheme.
(d) if the fund is an open fund, include details of any restriction on
applications for redemption.
(e) date of any conversion from a D-REIT to an I-REIT or from a
restricted I-REIT to an unrestricted I-REIT or conversion from an
open to a closed fund or closed to open.
(f) statement of the number and type of units outstanding as at the
balance date of the report and of the balance date for the financial
statements.
(g) whether the scheme is listed and details of the listing including, if
trading is restricted.
(h) a statement of any restriction on the transferability of units.
(i) the scheme’s objectives as at the balance date of the report and any
changes since the date of the last report.
(j) structure diagram of the REIT which summarises the parties,
relationship, roles of parties and material cash flows.
(k) brief summary of the real estate assets (including development
and construction projects) and other assets and purchase or sales
contracts and of any material development or construction
contracts entered into in the period covered by the report.
(l) a statement as to whether or not the scheme has complied with
regulation 66 or regulation 78 as regards the making completion
of investment in at least one real estate asset within one hundred
and eighty days and if not the action taken in accordance with
these Regulations.

192
 (m) a brief statement of the borrowings and financial arrangements
entered into by the trustee on behalf of the scheme entered into in
the period covered by the report and the outstanding as at the date
of the report, together with a calculation made in accordance with
regulation 72 or 82 on the gearing as at the date of the report.
(n) table summarising distributions made for the lesser of 5 years or
since the establishment of the scheme, the dates of such
distributions and for each distribution the percentage of net, after
tax, income distributed as provided for in these Regulations. The
following is provided by way of example but will need to be
adapted to the type of REIT, its assets and sources of income and
the requirements under taxation legislation or of the Ugandan
Revenue Authority, if any, from time-to-time.
SOURCES OF DISTRIBUTION** 20XX Ugx 20XX Ugx
Rental income
For D-REIT or I-REIT converted from D-REIT Interest or
similar income from provision of finance to purchases of
developed real estate etc
Dividend income, including from wholly owned & controlled
company
Distributions from other REIT scheme/s or collective investment
schemes by source for each scheme
Realised capital gains (less losses) sales of real estate
Other realized capital gains (less losses)
Other income
SUBTOTAL
LESS**
Expenses & permitted deductions or transfers
Taxation
TOTAL POTENTIAL DISTRIBUTABLE INCOME
Distribution per unit in Ugx
Distribution as a % and compliance with Regulation 73, if an I-
REIT
** In addition items may be included to reflect the particular
REIT’s situation or to reflect e.g. unrealized losses brought
forward or distributions made from previous year’s realized
gains or unrealized gains.

If the REIT is listed a graph which plots the unit price on at least a monthly basis for
the lesser of the previous 5 years or the period since first listing.

193
4. Details of parties
(1) The report shall include names, addresses, registered office, telephone
and facsimile number of persons including partnerships which have provided
services during the relevant period and prior financial year and the dates of
appointment, retirement, resignation or replacement of those persons,
including-
(a) the promoter;
(b) the trustee and compliance officer;
(c) the registrar;
(d) the REIT manager, compliance officer and the directors of the
REIT manager during the period covered by the report and shall
include-
(i) their qualifications and identifying the independent
directors and setting out dates of appointment and
resignation, if applicable; and

(ii) the details of any committees established by the Board and

their functions;
(e) the property manager, if any;
(f) the project manager certifier, if any;
(g) the structural engineer;
(h) the valuer;
(i) legal advisers;
(j) auditors, and
(k) other experts.

(2) Concise details of any relationship or transaction which results in any

parties being connected persons for the purposes of the Act or these
Regulations.

5. Units of REIT securities issued, outstanding and holdings

(1) The report shall include -

(a) details of number, price at which units were issued or redeemed

and the total value of units of REIT securities issued or redeemed
during the period covered by the report.

(b) classes and number of units by class outstanding as at the balance

date and the date of the report.
194
 (c) a table with a breakdown of REIT securities holdings, by class, as
follows-
No. of REIT Level of holding Total %
securities holders holdings
Less than 100

100 to 1,000

1,001 to 10,000

10,001 to 100,000

100,001 to less than 5% of number of units on

issue as at the balance date of the financial
statements included in the report
Names of REIT securities holders and connected
persons with holdings of 5% and above of
number of units on issue as at the balance date
of the financial statements included in the report
Promoter’s holdings
as per regulations 75
and 85
Free float
As required by
regulations 28 and 30

(2) Where any units have been redeemed during the period covered by the
report then provide by month details of the number of units redeemed by bands,
and the price applicable.
6. Reit manager’s report
The report shall include:
(a) The report shall include a concise statement explaining the REIT
manager’s responsibility for preparing the report and the financial
statements and include a statement signed by the Chairperson and
an independent director of the REIT manager stating that the
reports and financial statements have been prepared in accordance
with the accounting standards currently applying in Uganda and
comply with the Act and these Regulations and where the REIT is
listed with the requirements of the Approved Securities Exchange.

195
 (b) Where the report is an annual report and the audited results for the
financial year differ by more than 10% from any profit estimate,
forecast or projection previously made or issued in respect of the
scheme for the relevant period the REIT manager should include
an explanation for the difference.

7. The Assets and Performance of the Real Estate Investment Trust

Scheme
The report shall contain a report by the REIT manager on the operational
aspects of the scheme and in particular should provide as regards-
A. Assets

1. Breakup of eligible assets by class (e.g. real estate, development and

construction, cash, investment in wholly owned and controlled,
companies, investee companies and investee trusts, investment in other
securities) and shall include-

(a) the most recent valuations for each class of asset and date of
valuation;

(b) the details of any assets that do not qualify as eligible assets under
the Act or these Regulations;

(c) where appropriate, tables, graphs or charts illustrating change over

time and trends; and

(d) a table, dependent on the type of REIT, which includes the

following information.
I-REIT eligible Regulati Regulation limit in % as at Highest % Date of most
investments on and and scheme balance level recent
(assets) regulation maximu minimum docu- date during valuation/s
65 m limit limit % ment % reporting and reference
% period to page of
report
detailing
valuation
All direct eligible
real estate
(a) Freehold
(b) Leasehold

196
All indirect
eligible real
estate
(a) Freehold held
through investee
companies or
investee trusts
(b) Leasehold held
through investee
companies or
investee trusts
Income
producing real
estate regulation
65(5) Minimum
of 75% of TAV
within 2 years of
authorisation
Land and cost of
construction
regulation 70
Maximum 15%
TAV
Vacant Land at
acquisition cost
& real estate not
producing
commercial
return Regulation
70 Maximum
10% of TVA
Cash, deposits,
bonds and money
market
instruments
Regulation 65(9)
Maximum 5% to
single issuer,
institution or
members of group
Wholly owned
and controlled
company which
conducts real
estate activities
Regulation
65(10) Maximum
of 10% TAV with
REIT securities
holder consent
197
Income producing
assets including
listed shares in
Ugandan property
companies and
units in Ugandan
I-REITS.
Regulation 68(2)
Maximum 10% of
value of
investment and
TAV at time of
acquisition
For an I-REIT
that has
converted from a
D-REIT
Mortgages or
other secured
loans Etc.;
authorised under
Regulation 13
provided to
purchasers of real
estate developed
or constructed
Regulation 13
Other assets
(eligible) include
description
Other assets (not
eligible) include
description

198
 Date of
Most
Level % recent
as at Highest % valuation/
Regulati Limit %
D-REIT Eligible Investments financial level during s and
on and in scheme
(Assets) Regulation 76 statement reporting reference
limit % document
balance period to page of
date report
detailing
valuation

All direct eligible real estate

(Regulation 3)

(a) Freehold
(b) Leasehold
All indirect eligible real
estate (Regulation 3) (a)
Freehold held through
investee companies or
investee trusts (b) Leasehold
held through investee
companies or investee trusts

Development & construction

projects Regulation 77(4)
within one year of date of
authorisation minimum of
30% TAV in this or income
producing or a combination

Mortgages or other secured

loans etc.; authorised under
Regulation 14 provided to
purchasers of real estate
developed or constructed
Vacant Land

Cash, deposits, bonds and

money market instruments
Regulation 77(8)
Maximum 5% to single
issuer, institution or
members of group

199
Wholly owned and
controlled company
conducting real estate
activities. Regulation 77(9)
Maximum of 10% TAV with
REIT securities holder
consent
Income producing assets
including shares in Ugandan
property companies and
units in Ugandan REITS.
Regulation 79(3) Maximum
10% of value of investment
and TAV at time of
acquisition
Other assets (eligible)
include description

Other assets (not eligible)

include description

2. Concise details of each real estate asset owned or contracted for

purchase or sale, and shall include—
(a) name and address of each real estate asset and whether or not in
the course of development or construction;
(b) date of acquisition, acquisition price and cost of any material
renovations of redevelopments (not in the nature of ongoing
maintenance and replacement of capital plant or equipment),
most recent valuation and date of valuation;
(c) description, property and type and age of each real estate asset;

(d) title details and details of encumbrances or any limits or

conditions on the title;
(e) details of any competing claims made in respect of any title or
real estate asset;
(f) if it is leasehold, the tenure of leasehold, remaining term, rental or
other fee payable and remediation terms on exit, rights, if any, to
purchase or seek new term on expiry and conditions, conditions
on transfer of lease;
200
 (g) net lettable area or other determinant of income (e.g. acres for
plantation or forest, tons processed, passengers or landings) of,
existing use, occupancy rates over time, historic let up (vacancy)
period and number of parking spaces of other relevant assets;
(h) brief particulars of tenancies or other usage rights (e.g. hotel
number of occupied room nights and average room rate), major
tenants and areas occupied (which may be by band where multiple
small tenancies), tenancy/lease periods, average tease term, lease
up incentives, etc. which in the case of multiple small tenancies
may also be in bands;
(i) tables or charts which illustrate tenancy expiry pattern for all
existing leases and historic rental income trends and projected
income based on current leases; and
(j) the date of acquisition and price, cost of any material
improvements, construction of development works and latest
valuation of the property including the date of valuation and name
of the valuers and the net book value of the property.

3. Where there have been acquisitions or disposals during the period—

(a) identity of the seller or purchaser;
(b) details of the property acquired as per paragraph 1;
(c) for disposals, date of disposal, price of disposal, market value,
date of latest valuation, name of valuers and profit or loss on
disposal after taking into account improvements, development and
construction; and
(d) the anticipated impact of the acquisition or disposal on earnings.

4. Where the acquisition or disposal transaction involves a connected

person then in addition to the information required to be disclosed in
paragraphs 1 and 2, the report shall also contain—
(a) details of the relationship giving rise to the application of the
connected person provisions; and
(b) where REIT securities holders’ approval to the transactions was
required to be obtained, the details of the date of meeting,
resolution, attendees and votes cast.
201
5. Where the REIT has conducted any development or construction
activities then also include details of -
(a) the development or construction including nature of development
or construction;
(b) the original budget and work plan and costings for the
development or construction including, details of approvals
required;
(c) the progress to date against budget, work plan, costings and
obtaining of approvals and details of any variations; and
(d) the impact of changes on performance, projected returns and on
distributions which may include tables, graphs or charts, where
appropriate, to illustrate trends.

6. Where the REIT has entered into any contractual arrangements to

commence any development or construction activities within the six-
month period after the balance sheet date, it shall include the details to
the extent that they are available of—
(a) the development or construction proposed, including nature of
development or construction;
(b) the total budget and proposed work plan, including scheduled
completion date;
(c) the required approvals and status of obtaining of approvals; and
(d) the projected impact on projected returns and distributions.

7. Where a REIT is a D-REIT developing real estate for sale, in addition to

meeting the requirements of paragraphs 1-4, the report shall also include
details of the—
(a) the initial proposed marketing and projected sales schedule;
(b) profit and loss on sales;
(c) monthly holding costs of completed but unsold properties;
(d) where properties developed or constructed have been sold on a
tenant purchase or other arrangement which involves the
provision of finance to the purchaser or term payment then
202
 provide details of the terms provided and the payments by the
purchaser or tenant as against scheduled payments including
levels of arrears, costs of arrears and action taken to correct the
position; and
(e) the impact of the tenant purchase arrangements, term payment or
financing of purchases on performance, projected returns and on
distributions, include tables, graphs or charts, where appropriate,
to illustrate trends.

8. Include details of investment in any wholly owned and controlled

company carrying out real estate related activities.

9. Details of other non-direct real estate assets—

(a) type;
(b) date of acquisition;
(c) percentage of each asset class as a percentage of total assets;
(d) income or returns on each asset class;
(e) last valuation, valuer/s and date of valuation and basis of
valuation; and
(f) where the asset consists of shares in a wholly owned and
controlled company provide details of the company’s business
activities, assets, income and liabilities (including borrowings
from any source) and of any loans, guarantees, indemnities or
other support provided to the company.

B. Details of Valuations
Summaries of the any valuations obtained, included updating of prior
valuations, and should be included in the report together with a statement that
copies of full valuation reports are available for inspection without any charge
at the offices of the REIT manager and the hours in which reports may be
inspected.

C. Performance of scheme
The report shall include the following:

203
1. Information from the REIT manager relating to the performance of the
scheme over the period covered, achievement of the scheme’s
objectives, the market outlook and key aspects or identified risks likely
to impact on the future performance of the scheme and the capacity to
fulfil the scheme’s objectives.
2. Explanation of maintenance costs and major capital works undertaken in
the period and comparison with scheduled or budgeted maintenance or
capital works.
3. A comparative table covering at least the last 5 financial years or if
established for less than 5 years then since establishment, or from
authorisation of the scheme if shorter, showing for the end of each
financial year or half year as appropriate:
(a) Total asset value (TAV);
(b) NAV ex distribution;
(c) NAV per unit ex distribution ;
(d) Highest and lowest NAV per unit ex distribution;
(e) The number of units outstanding;
(f) Distribution per unit (interim and final) and the date of
distributions;
(g) Distributions relative to the requirements of the trust deed and
minimum distribution provided for in the Act and Regulations;
(h) The distribution yield based on NAV and where the REIT is listed
on the NSE the yield based on the value of a unit as at the close of
trade on the last trading day of the period;
(i) The MER together with an explanation of any changes in the MER.

4. Average annual total return for the scheme measured over:

(a) one year, or since inception if shorter;
(b) three years, and
(c) five years.

5. Include details of any material litigation and potential impact.

204
6. Any events or circumstances which is likely to impact on the future
performance (e.g. increase in outgoings, reduction in rents overall,
increased competition for tenants, changes in regulations, end of
significant tenancy and no certainty of replacement tenant to take over,
requirement for refurbishment or unscheduled or unbudgeted
maintenance or capital works, cost of development or construction or
delay in completion, delay in achieving sales, increases or decreases in
interest rates).

7. Include where appropriate a sensitivity table illustrating the impact on

performance and potential distributions of changes in key variables.

D. Use of proceeds of new issue

Include a brief statement of the use of funds raised from a new issue of units.
This usage report should be updated in subsequent reports.

E. Connected party transactions

Include:
(a) Details of the transaction or relationship giving rise to the
application of the connected person provisions.
(b) Details, including value nature of service or goods provided etc;
for all connected party transactions.
(c) Where REIT securities holders approval to the transactions was
required to be obtained then details of date of meeting, resolution,
attendees and votes cast.

F. Compliance with income tests under these Regulations or scheme

documents
Depending on the type of REIT and the provisions of the scheme documents
include a summary of the requirements as regards income tests provided under
regulation 69 or the scheme documents and:
(a) whether the REIT is in compliance with the requirements.
(b) the reasons for any non-compliance and the action taken to rectify
the position.
(c) the implications or potential implications for the REIT and REIT
securities holders of non-compliance.
205
G. Distributions
The report should include:

1. Statement as to requirements, policy or objectives included in the

scheme documents, including updated statement, in relation to
distribution policy.
2. Statement as to requirements of the scheme documents, the Act
and these Regulations in relation to distributions.
(a) Whether the REIT is in compliance with the requirements;
(b) The reasons for non-compliance if applicable and the action
taken to rectify the position, including action by the trustee
and a vote of REIT securities holders; and
(c) The implications or potential implications for the scheme,
the REIT and REIT securities holders of non-compliance.

3. Include a table setting out details of all distributions paid and declared
distributions, date of distributions, source from which any distribution
has, or declared distribution, is to be paid, and whether or not in respect
of each period requirements of the Act or these Regulations or of any
other law in relation to taxation treatment as a REIT have been met and
include by way of example subject to the divisions required to reflect the
taxation treatment of distributions:

20XX 20XX
SOURCES OF DISTRIBUTION**
Ugx Ugx

Rental income

For D-REIT or I-REIT converted from D-REIT

Interest or similar income from provision of
finance to purchases of developed real estate etc

Dividend income, including from wholly owned

and controlled company

Distributions from other REIT scheme/s or collective

investment schemes by source for each scheme

206
Realised capital gains (less losses) sales of real
estate
Other realised capital gains (less losses)
Other income
SUBTOTAL
LESS**
Expenses and permitted deductions or transfers
Taxation
TOTAL POTENTIAL DISTRIBUTABLE
INCOME
Distribution per unit in Ugx
Distribution as a % of net after tax income and
compliance with Regulations)
** In additional items may be included to reflect
the particular REIT’s situation and/or to reflect e.g.
unrealized losses brought forward or distributions
made from previous year’s realized gains or
unrealised gains.

4. Details of date of any meeting, resolution, attendees and votes cast in

relation to the level, if any, of distributions.

H. Borrowing levels and compliance with covenants

The report should include:

1. Details of borrowings or other financing arrangements, maturity

profile and average cost of funds together with a graph or chart
illustrating the maturity profile and average cost of funds.

2. Summaries of financial covenants (e.g. debt service cover ratio)

included in any loan or financing arrangement documentation
together with cover ratios and include a table, graph or chart
illustrating changes over time and trends.

207
 3. A sensitivity table shall be included illustrating the impact of
changes in key assumptions of inputs.

4. Details of any connected party transactions and:

(a) details of the transaction or relationship giving rise to the
application of the connected person provisions.
(b) where REIT securities holders’ approval to the transactions
was required to be obtained then details of date of meeting,
resolution, attendees and votes cast.

5. Details of the limits on borrowings etc; included in the Trust Deed and
of compliance with these provisions and the limits on borrowing etc;
imposed by the Act and Regulations over time. Details should include:
(a) whether the REIT is in compliance with the requirements.
(b) instances of non-compliance including, period of non-compliance.
(c) the reasons for non-compliance if applicable with scheme documents
and Regulations and the action taken to rectify the position.
(d) approvals or consents obtained including details of date of
meeting, resolution, attendees and votes cast.
(e) the implications or potential implications of non-compliance by
the REIT and REIT securities holders.

I. Sensitivity analysis and impact of any financial structuring

1. Provide details of any measures adopted or proposed which would
constitute financial structuring under the Regulations, the
implications of the absence, removal or expiry of such on yield,
cash flows, distribution or risk profile of the REIT and the
assumptions underlying the calculations.
2. Include a sensitivity table.
J. Notifications and compliance reports
1. The REIT manager’s report shall include details of:
(a) any matter arising during the period which has been, or
should have been, notified to the Authority pursuant to the
Regulations.

208
 (b) any failures by the REIT manager, trustee or any other party to
comply with the provisions of the scheme documents, the Act or
the Regulations and action taken to remedy the failure.
(c) any action taken by the REIT manager or which the trustee was
requested to take during the period to protect assets of the trust or
the interests of REIT securities holders.
(d) an update of any matters reported in prior periods and action taken
to rectify.

2. The report may also include the REIT manager’s comments on trustee’s
report, performance of the trustee or of any other person or other
material matter.

K. Trustee’s Report
1. The trustee’s report shall confirm all matters relating to the title
particulars of real estate properties and other assets of the fund and
include details of;
(a) any appointment of a secondary disposition trustee together
with details of purpose of the appointment and of any
documents executed by the secondary disposition trustee;

(b) any matter arising during the period which has been, or
should have been, notified to the Authority pursuant to the
Regulations;

(c) any failures by the trustee to comply with the provisions of

the scheme documents, the Act or the Regulations and
action taken to remedy the failure;

(d) any failures by the REIT manager or any other person to

comply with the provisions of the scheme documents, the Act
or the Regulations and action taken to remedy the failure;

(e) any action taken by the trustee during the period to protect
assets of the trust or the interests of REIT securities holders; or
(f) meetings of REIT securities holders convened by the
trustee, resolutions put and the outcome of voting.
209
2. The report shall contain a summary of the meetings of REIT securities
holders called or held during the relevant period, a summary of the
purpose of the meeting, resolutions put to the REIT securities holders
and of attendees and votes cast.

3. The report shall state whether the trustee is of the opinion that the REIT
manager has managed the scheme in accordance with the provisions of
the scheme documents, the Act and these Regulations and if the trustee
is of the opinion that the REIT manager has not done so then:
(a) identify the shortcomings of failures to comply;
(b) outline the impact of the shortcomings or failures, and
(c) detail the action that the trustee has taken to address the
shortcomings and/or prevent reoccurrence.

4. The report may also include comments by the trustee on REIT manager’s
report, performance of the REIT manager or of any other person or other
material matter.

5. The Trustee’s Report should be signed by the trustee.

L. Auditor’s Report
1. An annual report shall be accompanied by an auditor’s report
addressed to and for the benefit of the trustee in its capacity as the
legal owner and trustee for the REIT securities holders and REIT
securities holders as beneficial owners.

2. The report shall include:

(a) A compliance report as required by the Regulations.

(b) Calculations of percentages required by these Regulations

together with a statement as to whether the limits set out in
the Regulation have not been complied with throughout the
reporting period and if not should include details of the
non-compliance and whether the non-compliance has been
rectified as at the balance sheet date or the date of the report
which shall include—

210
 (i) the minimum number of REIT securities holders;
(ii) the minimum free float;
(iii) the minimum promoter investment and retention;
(iv) eligible investments;
(v) the minimum income generation;
(vi) the maximum gearing; and
(vii) the minimum distributions.

(c) verification of the MER calculation; and

(d) verification of the sources of distribution made to REIT
securities holders.

3. The auditor’s report shall include the auditor’s opinion on the financial
statements and be signed by the auditor. Where the auditor’s report is
qualified details of the qualification should be noted clearly and
prominently in the report.

M Meetings of REIT securities holders

The report shall contain a summary of the meetings of REIT securities holders
called or held during the relevant period, a summary of the purpose of the
meeting, resolutions put to the REIT securities holders and of attendees and
votes cast.

N Financial statements
1. The financial statements shall give a true and fair view of the
financial position, financial performance and cash flows and be
prepared in accordance with the Act, these Regulations, the law
and accounting standards applying in Uganda from time-to-time.

2. A clear statement shall be included as to whether or not the

financial statements are audited.

3. Where the financial statements are unaudited then there shall be a

statement signed by the Directors of the REIT manager and the
compliance officer stating that the financial statements have been
prepared to give a true and fair view of the financial position,
211
 financial performance and cash flows and be prepared in
accordance with the Act, these Regulations, the law and
accounting standards applying in Uganda from time-to-time.

4. The financial statements shall also include»—

1) Statement of Financial Position

(a) NAV of the fund;
(b) number of issued units by class if more than one;
(c) NAV per unit (ex-distribution, where applicable);
(d) net assets/liabilities attributable to REIT securities holders;
(e) NAV at book value of each unit as at the Statement of
Financial Position date, and
(f) if not included in the Statement of Financial Position then,
by way of Notes, the carrying amounts of investments, as
applicable, should be categorised as follows-
(i) real estate, with break up by class (e.g. housing,
office, industrial Etc);
(ii) real-estate related assets;
(iii) development and construction assets;
(iv) non real estate assets;
(v) other real estate investment trusts;
(vi) cash, deposits, fixed income and other debt
securities;
(vii) any other investments with material items disclosed
separately, and the total eligible investments and
eligible investments as a percentage of total assets as
at the Statement of Financial Position date.

(g) Liabilities should include details of contingencies including

construction contracts, acquisition contracts and hedging
arrangements or derivatives.

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 (h) If not included in the Statement of Financial Position then,
by way of Notes, details of borrowings or other financing
arrangements including:
(i) total borrowings or financing arrangements as at the
Statement of Financial Position date as a percentage
of total asset value;
(ii) borrowings of any wholly owned or controlled
company, and
(iii) any guaranteed borrowings or financing
arrangements.

2) Statement of Comprehensive Income

(a) fees, charges, reimbursements and expenses paid to the REIT
manager or any property manager appointed by the REIT
manager, with each type of charge shown separately;
(b) fees, charges, reimbursements and expenses paid to the trustee
with each type of charge shown separately;
(c) fees, charges, reimbursements and expenses paid to the property
manager certifier with each type of charge shown separately;
(d) fees, charges, reimbursements and expenses paid to the structural
engineer with each type of charge shown separately;
(e) fees, charges, reimbursements and expenses paid to the valuers
with each type of charge shown separately;
(f) a calculation of MER and in the case of audited financial
statements the auditor’s verification of the calculation;
(g) sources and nature of income;
(h) for I-REITs, the percentage of income for the financial year from
rent or income streams of a similar nature calculated as provided
for in the Regulations;
(i) total amount available for distribution and distribution per unit,
interim and final;
(j) net income after tax to be shown separately as to realized and
unrealised income.

213
3) Statement of changes in fund balance.

4) Statement of cash flows.

5) Notes to Financial Statements

If not already shown then, as Notes:
(i) accounting policy adopted in respect of the trust as an accounting
entity;
(ii) income basis adopted;
(iii) movements in number of units on issue including, units issued,
cancelled or redeemed, if applicable by class or type;
(iv) all costs of or associated with redemption of units or issuance of
new units and of listing;
(v) number of units and value of units held, legally or beneficially, by
the promoter, the REIT manager and connected parties and
movements in holdings during the financial year;
(vi) details of taxes paid or payable by the REIT and a breakdown;
(vii) details of any taxes paid by the REIT as a consequence of not
compliance with the Act or these Regulations; and
(viii) details of taxes withheld in respect of distributions paid or
payable.

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 FORM -5

Reg. 122

THE COLLECTIVE INVESTMENT SCHEMES

(REAL ESTATE INVESTMENT TRUSTS) REGULATIONS, 2017

APPLICATION FOR A LICENCE/ RENEWAL OF LICENCE TO

CONDUCT THE BUSINESS OF A REIT MANAGER OR REIT
TRUSTEE
_______________________________________________________________
Application is made for a REIT Manager/REIT Trustee (tick as appropriate)
licence/renewal of licence (delete where inapplicable) under the Collective
Investment Schemes (Real Estate Investment Trusts) Regulations, 2016 and the
following statements are made in respect thereof:

Note—
If space is insufficient to provide details, please attach annexure(s). Any
annexure(s) should be identified as such and signed by the signatory of this
application.
Information provided should be as at the date of the application or renewal.

1. Name of company ..................................................................... Limited

2. Registered office .................................................................................

3. Date of incorporation ...........................................................................

4. Address ...............................................................................…..........

5. E-mail …………………………………………………………………..

6. Location, address and telephone number of principal office……………

......................................………………..………………………………

7. Location, address and telephone number of branch offices …………….

…………………………………………………………………………
……………….…………………………………………………………

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8. Details of capital structure:
(a) Nominal capital (Ug.shs.) ………………………………………
(b) Number of shares ………………………………………………..
(c) Paid-up capital (Ug.shs) …………………………………………..

9. Shareholders (please attach a list)

Name Address & telephone Number of shares Held
number

10. (a) Directors (please attach a list)

Name Identity Date of Date of Permanent Academic Or Number of
Card/ Appointme birth address & Professional shares
Passport nt telephone qualification held in the
number number company

(b) Secretary
Name…………………………………………………………………….

Address …………………………………………………………………

(c) Chief executive and other key personnel

Name Identity Date of Date of Permanent Academic Or Number of
Card/ Appointme birth address & Professional shares
Passport nt telephone qualification held in the
number number company

11. Particulars of other directorship(s) of the directors and secretary.

…………………………………………………………………………

12. Particulars of shares held by directors or secretary in other companies

…………………………………………………………………………
…………………………………………………………………………
216
13. Has the applicant or any of its directors, secretary or members of senior
management at any time been placed under receivership, declared
bankrupt, or compounded with or made an assignment for the benefit of
his creditors, in Uganda or elsewhere? Yes/ No. If ‘yes’, give details
……………….…………………………………………………………
……….…………………………………………………………………

14. Has any director, secretary or senior management of the applicant been
a director of a company that has been:

(a) denied any licence or approval under the Collective Investment

Schemes Act,2003 or equivalent legislation in any other
jurisdiction: Yes/No.
If Yes, give details.
……………………………………………………………………
……………..……………………………………………………
(b) a director of a company providing banking, insurance, financial or
investment advisory services whose licence has been revoked by
the appropriate authority? Yes/No. If Yes, give details.
……………………………………………………………………
……………..……………………………………………………
(c) subjected to any form of disciplinary action by any professional
body of which the applicant or any of its director was a member?
Yes/ No. If yes, give details.
……………………………………………………………………
…………………………………………………………………..
15. Has any court ever found that the applicant, or a person associated with
the applicant was involved in a violation of the Collective Investment
Schemes Act or these Regulations thereunder, or equivalent law outside
Uganda? Yes / No. If ‘yes’, give details.
…………………………………………………………………………
…………………………………………………………………………
16. Is the applicant and/or a person associated with the applicant now the
subject of any proceeding that could result in a ‘yes’ answer to the above
question (15)? Yes/No. If ‘yes’, give details.
…………………………………………………………………………
…………………………………………………………………………

217
17. (1) Is the applicant, or any shareholder, director or the secretary of the
applicant, a member or director of a member company of any securities
exchange? Yes/ No.
If ‘yes’, give details.
…………………………………………………………………………
…………………………………………………………………………

(2) Have any of the above persons been—

(a) refused membership of any securities organisation? Yes / No. If

‘yes’, give details
……………………………………………………………………
……………………………………………………………………

(b) expelled from or suspended from trading on or membership of any

securities organisation? Yes/No. If ‘yes’ give details
……………………………………………………………………
……………………………………………………………………

(c) subjected to any other form of disciplinary action by any

stock/securities exchange? Yes/No. If ‘yes’, give details.
……………………………………………………………………
……………………………………………………………………

18. Business references:

Name Address Telephone Occupation
number (s)

19. One bank reference, where the applicant is a bank the reference shall be
given by another bank independent of the applicant

20 Profile of the chief executive and key employees in the applicant

company:

Name Posts Qualifications Experience

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21. List the office facilities of the applicant
…………………………………………………………………………
…………………………………………………………………………

22. State the exact nature of the activity to be carried on which obliges the
applicant to apply for a licence from the Capital Markets Authority
…………………………………………………………………………
…………………………………………………………………………

23. Any other additional information considered relevant to this application:

…………………………………………………………………………
…………………………………………………………………………

We …………………………………(Director), ……………………………
(Director) and ………………………………. (Secretary) declare that all the
information given in this application and in the attached documents is true and
correct.

Dated this …………… day of ………………………, 20 …………….

Signed:

…………………………………………….… ) Director

………………………………………………. ) Director

……………………………………………… ) Secretary

Note:

1. The following shall be submitted with the application for a licence:

(a) Memorandum and articles of association;
(b) certificate of incorporation;
(c) business plan complying with the requirements of regulation
125(1)(d) of the Collective Investment Schemes (Real Estate
Investment Trusts) Regulations, 2016;
(d) a statement of the un-audited accounts for the period of
accounting year ending not earlier than six months prior to the
219
 date of application and audited annual accounts for the preceding
two years (in the case of application of licence), management
accounts up to the 30th November and audited annual accounts for
the preceding year (in the case of renewal of licence);
(e) a declaration by the directors as to whether after due enquiry by
them in relation to the interval between the date to which the last
accounts have been made and a date not earlier than fourteen days
before the date of the application –
(i) the business of the company has, in their opinion, been
satisfactorily maintained;
(ii) there have, in their opinion, arisen any circumstances
adversely affecting the company’s trading or value of its
assets;
(iii) there are any contingent liabilities by reason of any
guarantees given by the company or any of its subsidiaries;
(iv) there are, since the last annual accounts, any changes in
published reserves or any unusual factors affecting the
profit of the company or any of its subsidiaries;
(f) a declaration by persons authorised as prescribed to accompany
the application form;
(g) an application fee.

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 SCHEDULE – 4
Reg. 113

THE COLLECTIVE INVESTMENT SCHEMES (REAL ESTATE

INVESTMENT TRUSTS) REGULATIONS, 2017

VALUATIONS

1. Industry standards

(1) Subject to the provisions of the Act, these Regulations and the
requirements of this Schedule all valuations will be conducted in
accordance with the International Standards and best practice applicable
to valuation of property.

(2) A valuation summary prepared in accordance with this schedule may be

included in any Prospectus or Information Memorandum but full copy of
the valuation report must be retained and made be available for
inspection by any REIT securities holders, potential or past investors in
REIT securities and the Authority. No claim of confidentiality can be
made in respect of a valuation report issued to the trustee or promoter of
a REIT.

2. Valuer’s details, signing, dating, certification and authentication

(1) The report should set out prominently-
(a) the name;
(b) address;
(c) qualifications;
(d) registration number; and
(e) where applicable her or his organization.

(2) All valuation reports shall be signed by the valuer and dated and
where the valuer is employed by a company, corporation or other
body including a government organisation, department or
authority shall also be signed by a director and the Chief
Executive Officer of the company or corporation or the head of
the organization, authority or department.

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3. To whom the report must be addressed
(1) All valuation reports shall be addressed to the trustee and be
expressed to be for the benefit of the trustee as trustee and all
REIT securities holders in any real estate investment scheme or
real estate investment trust in which the property is or becomes an
asset.

(2) Where a valuation was obtained prior to the appointment of the

trustee or is in respect of property already vested in the REIT then
the valuation shall be refreshed and reissued and addressed to the
trustee. In refreshing and reissuing a valuation the valuer must
expressly consider and address the currency of its prior opinion
and of the data, information, capitalisation a discount rates utilised
and other considerations and assumptions.

4. Opinion of value and disclaimers

(1) The valuer shall express an opinion in the report as to the value in
words as well as figures.

(2) Disclaimers, waivers and limitations on the valuer’s opinion shall

not be so wide as to deprive the trustee, or REIT securities holders
or other parties relying on the valuation for the benefit of the
valuation.

5. Basis of valuation
The basis of the valuation is to be market value.

6. Compliance with the Act and these Regulations

All reports and the conduct of valuations shall comply with the requirements of the
Act and these Regulations, including the requirement for physical inspection.

7. Valuation approach and method of valuation

(1) Valuations shall be conducted using International Standards and
best practice for the valuation of property. The valuation achieved
under each valuation method shall be disclosed in the valuation
report. The valuer shall determine and use the most appropriate
valuation based on the type of property, availability of relevant
data, accuracy of data, relevancy, and other factors considered by
the valuer to be relevant.

222
 (2) The valuer shall include in its report a rationale for reconciling the
values derived under the different methods and include a
comparison by way of a table.

(3) In the case of an I-REIT the assumption will be that, unless the
valuer for the reasons set out in its report believes that the method
is inappropriate in the circumstances, one method of valuation
will be the income comparison method.

(4) Valuations for assets other than real estate shall reflect the industry
practice to valuation of such assets and may require the
involvement of a specialist valuer.

8. Valuation approach and method of valuation

(1) The general approaches for the valuation of real estate currently
include—
(a) comparison approach;
(b) cost approach; and
(c) income capitalisation approach.

(2) The valuation report shall include an explanation of the valuation

methods adopted and their appropriateness to the particular assets
and the circumstances of the valuation.

(3) In applying the methods of valuation the valuer shall ensure that
the following are considered and disclosed in any valuation report:

(a) Comparison Method

(i) appropriate and adequate comparable;
(ii) details of the comparable including, identification
and descriptions of the property, date of sale, tenure
and details of title, land or lettable areas, purchase
price, breakdown of land and building values, names
of vendor and purchaser, terms and conditions of sale
where available, current use, planning and zoning
details and restrictions on use if any, details of any
easements, tenancies;
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 (iii) adjustments, if any, made by the valuer to ensure
comparability so far as possible;

(b) Cost Approach

(i) the actual construction or tender cost, if available;
(ii) the cost and rates adopted for buildings structures
and other improvements;
(iii) adjustments made to reflect depreciation and
obsolesce;
(iv) adjustments, if any, made by the valuer to ensure
comparability so far as possible;
(v) depreciation rates adopted and their bases; and
(vi) a caution should be included as to the
appropriateness of use of the cost method in that
costs may not reflect value;

9. Income Capitalisation Approach

(a) Investment method
(i) gross income and sustainability of income used in the
valuation where projected income is market derived.
(ii) actual outgoings and other operating expenses where
available for the past three years, projections should be
supported and market derived.

(iii) adequacy of maintenance and whether any major capital

expenditure or increased maintenance is likely to be
incurred in the next two years.
(iv) in the case of tenanted properties, schedules of existing
tenancies, including names of tenants, term of tenancy
(including options), rentals, services charges and obligation
to contribute to outgoings.
(v) in the case of tenanted properties, any connection of the
tenant with the vendor or owner should be disclosed
together with a comment as to whether the rentals and terms
of the tenancy reflect the market.
224
 (vi) in the case of tenanted properties, analysis of comparable
data on rentals, incentives for tenants, outgoings, vacancies
and capitalization rates and comparison with the property
being valued.

(vii) market evidence to support the capitalisation and discount

rates utilized which reflect the risk of the business, sector
and location and other factors.

(b) Residual method

(i) the approved or submitted development plan together with
details of approvals and consents obtained or applied for in
relation to the development.

(ii) consideration should be given to the reasonableness of the

gross development value, timing of the development and
construction period, in addition the valuer should liaise with
the structural engineer and any project manager and if
considered appropriate obtain additional expert input as to
the cost of undertaking the development, and to obtain
necessary and current market information.

(iii) the complexity of the development and construction and

terms of the building contracts and prior performance of the
builder on similar contracts particularly as regards cost
overruns, disputes and timing for completion should be
taken into account together with the potential impact on
cash flows.

(iv) market information to support projected supply, including

supply in the pipeline or approved developments, rates of
absorption and projected rents or sales prices and potential
impact on input costs.

(v) past sales and performance of the REIT or the REIT

manager or property manager in achieving sales for similar
developments should be considered.

(vi) the discount rate adopted must be market derived.

225
 (c) Profits method
(i) detailed workings showing an estimation of the annual revenue
from the assets being acquired, operating expense, overheads
and adjustments for depreciation and capital expense.
(ii) consideration shall be given as to the adequacy of the level
of maintenance, remaining useful life, obsolesce and
provision for replacement of the assets.
(iii) where the REIT is acquiring a business or entity rather than
simply an asset then the valuer shall also take account of
any potential liabilities that may be assumed by the REIT in
acquiring the business or entity including unpaid taxation
liabilities, pension and other potential employee liabilities.
any potential liability shall be disclosed and highlighted in
the report and if relevant the valuer should obtain expert
input prior to completing the report.
(iv) market evidence to support the capitalisation rates utilised
which reflect the risk of the business, sector and location
and other factors.
(d) Discounted cash flow method
(i) detailed workings showing estimation of cash flows and the
basis of estimation including comparison with market and
supply and demand estimates.
(ii) market evidence to support the capitalisation and discount
rates utilised which reflect the risk of the business, sector
and location and other factors.
(e) Other methods
(i) an explanation of the method and rationale used
(ii) all data used must be substantiated by reference to market
evidence.
10. Minimum contents of valuation report
(1) All valuation reports shall be clear and not misleading and shall
disclose all material information and ensure that information
disclosed is accurate and adequate. Where there is an inability to
obtain accurate or adequate data then this fact shall be clearly
disclosed and a caution included.
226
 (2) The report shall clearly set out the analytical process, data and
information used to arrive at the valuation.

(3) Where the valuation deviates from best practice then the reasons
for this and the possible implications on the valuation shall be
disclosed.

11. Contents of Report

(1) All valuation reports shall be addressed to the trustee and be
expressed to be for the benefit of any and all REIT securities
holders in any real estate investment scheme or real estate
investment trust in which the property is or becomes an asset.
(2) Details of the instructions provided to the valuer, including any
special conditions whether in writing or oral, should be clearly
disclosed.
(3) The purpose of the valuation shall be stated.
(4) The property shall be clearly identified by reference to title
particulars including, lot number, title number and postal address.
(5) The report shall be dated.
(6) The basis of valuation and methods used, including a description
of the method and comment on its appropriateness to the property
and limitations or issues arising, where possible two methods shall
be included.
(7) The extent of and dates of inspection shall be included together
with the name of the person who conducted the inspection.
(8) The tenure or type of title together with the interest to be valued.
(9) Any encumbrances, easements or other rights or claims or
restrictions on use.
(10) Zoning and approved uses and restrictions and building and
planning consents and approvals copies of which shall be
attached.
(11) A detailed description of the property which should include—

(a) location and accessibility and include a plan;

227
(b) age, description, condition and state of repair of buildings
and other plant, equipment, fixtures and fittings or
moveable property included in the valuation;
(c) approvals of buildings, use and compliance as well as
disclosure of any breaches of laws, regulations or
conditions relating to the property or other assets;
(d) details of any recent material upgrading, refurbishing or
renovations;
(e) details of the neighbourhood and surrounding
developments, availability of communications, services and
utilities;
(f) details relevant to the sector and type of property, for
example, for-–
(i) offices details of lettable space, comment on
facilities, services, access and access to transport,
parking, air-conditioning, standard of fit out and
comparative suitability for purpose and market
position;
(ii) factories details of factory buildings including e.g.
design, construction, height, span, access to services,
plant and equipment, location relative to access
roads, railways ports etc.; and suitability for a range
of activities or whether designed for specialist use
only;
(iii) residential accommodation, type and sector of
market, number of rooms, standard of finish, access
to and connection to services, access to transport and
schools, any limits on rental that can be charged or
requirements to provide access to particular group of
tenants or other limits on use or ability to sell;
(iv) other types or classifications of properties (for
example, hospitals, warehouses, logistics, shopping
centres, special purpose buildings, extractive
industries such as quarries) information relevant to
their attractiveness for their intended purpose, state

228
 of condition, comparison with norm for sector and
location and competitiveness compliance for zoning
and use and limits on changes and other factors that
might influence value; or
(v) problems or issues, for example, encroachments, site
stability, swampy or hill side, squatters, height
restrictions, set-backs, flooding, noise and other
detrimental aspects.
(g) details of prior registered dealings with the property
for the past three years (or longer if the valuer
considers relevant) including, date of dealing and if
acquisition date of acquisition, cost of acquisition,
expenditure subsequent to acquisition; parties
involved in the transaction, use at the time of the
transaction;
(h) photographs of properties, including comparative
properties and of the location may be included;
(i) current market conditions and the possible impact of
micro and macro-economic conditions and the
impact of possible changes should be considered; or
(j) the sources of information should be disclosed
together with the opinions of experts.
12. Use of experts
(1) The valuer may with the agreement of the trustee and the REIT
manager engage experts to provide specific input to assist it with
the preparation of a valuation. The appointment of experts and all
reports of experts shall state the purpose for which they were
prepared, comply with the Act and Regulations.
(2) Where the valuation is to be included in a Prospectus or
Information Memorandum then the expert must be named as an
expert in that document and appropriate consents obtained.
(3) The reports of experts in addition to being addressed to the valuer
must also be addressed to the trustee and be expressed to be for the
benefit of any and all REIT securities holders in any real estate
investment scheme or real estate investment trust in which the
property is or becomes an asset.
229
13. Valuation summary
(1) A valuation summary which is a condensed form of the valuation
report, prepared for the specific purpose, may be included in a
Prospectus or Information document or any other document
provided to REIT securities holders or any listing body.
(2) The valuation summary shall clearly state that it is a summary
only of the valuation report which is available for inspection at the
offices of the trustee and include other designated addresses or on
the internet address, if any.
(3) The summary must be clear, signed and dated and contain
adequate and accurate information and not be misleading to REIT
securities holders or potential investors in RETI securities or to
their advisers.

14. Significant or material changes

(1) Where a valuer has prepared a report or valuation summary and
the valuer becomes aware of any significant or material changes
affecting the valuation opinion, report or valuation summary at
any time prior to:
(a) the issue of the Prospectus or Information Memorandum;
(b) the issue of REIT securities pursuant to the Prospectus or
Information Memorandum; or
(c) REIT securities holders voting on any resolution for which
the report was prepared.
(2) The valuer must notify the trustee, the REIT manager and the
Authority of the fact and the impact or potential impact on his report
and opinion on value and shall withdraw his report and consent.
15. Appendices
Maps, plans, detailed workings, expert’s opinions, market studies, photographs
and additional details may be included as Appendices.

230
 SCHEDULE-5
Reg. 121
MEETING OF HOLDERS OF REIT SECURITIES

1. General
In addition to provisions for meetings of REIT security holders provided
for in the scheme documents, the trustee and the REIT manager shall
convene—
(a) an annual meeting of REIT securities holders to be held at least
fourteen days and not more than twenty-eight days after the date
of circulation of the annual report;
(b) whenever required by the Act, these Regulations or the scheme
documents;
(c) whenever the Trustee or the REIT manager determines that a
meeting is desirable;
(d) where directed to do so by the Authority where the Authority is of
the opinion that the calling of a meeting is desirable; or
(e) upon receiving a written request that a meeting be called for the
purpose specified in the request by not less than fifty REIT
securities holders who hold not less than ten percent of the voting
REIT securities in the real estate investment trust.

2. Notice of meetings
(1) At least a notice of fourteen days shall be given to the Authority,
the auditor and each holder of REIT Securities of all meetings.

(2) The notice of the meeting shall include:

(a) copies of any reports to be considered or which provide the
foundation for any resolution and a copy of any resolution
proposed to be put at the meeting;
(b) where the meeting is convened pursuant to a request of
holders of REIT Securities or the Authority, then a copy of
the request and the terms of any resolution proposed and of
all reports or valuations that are required to be prepared or
provided to holders;
231
 (c) where the meeting is convened as a consequence of a
direction received from the Authority a copy of the
direction and the terms of any resolution proposed, and
(d) a statement that a REIT securities holder is entitled to attend
the meeting in person or by executing the notice of
appointment attached to the notice calling the meeting is
entitled to appoint a proxy who need not be a REIT
securities holder.

2. Chairperson and quorum

(1) Where the meeting is convened by the Trustee or the REIT
Manager then the meeting shall be chaired by a representative of
the Trustee.

(2) Where the meeting is convened at the request of holders of REIT

Securities or the direction of the Authority then the meeting shall
be chaired by a person elected by holders of the REIT Securities
present at the meeting if no such appointment is made then by the
nominee of the Trustee.

(3) The quorum of a meeting of holders of REIT Securities shall be

five (5) REIT securities holders present in person or by proxy
except in the case of a meeting to pass a special resolution in such
case the quorum shall be a minimum of five REIT securities
holders present in person or by proxy representing the holders of
at least twenty-five percent of the REIT securities issued at the
date of the calling of the meeting.

(4) In the event that there is no quorum for any meeting, then the
meeting shall be adjourned to a date determined by the Trustee
which shall not be more than fourteen days from the date of the
adjourned meeting. A notice of the adjourned meeting shall be
given to all the holders of REIT Securities, the auditor and the
Authority.

(5) In the event that there is no quorum for any adjourned meeting,
then the meeting may proceed notwithstanding the lack of a
quorum.

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 (6) The REIT Manager or the holdings of REIT securities by the
REIT Manager or any party connected to them shall not be
included for the purposes of determining whether a quorum is
present irrespective of by whom the meeting was convened or the
matter before the meeting.

4. Resolutions
Except where a special resolution is required by or permitted by the Act, these
Regulations of the scheme documents, all resolutions may be passed by a
simple majority and a copy of all resolutions passed at any meeting shall be
filed with the Authority.

5. Voting rights
(1) The rights of any REIT securities holder to vote at any meeting are
subject to any provision of the Act or these Regulations which
limit the capacity of the REIT securities holder to vote on any
resolution or to any restrictions on voting by the promoter, REIT
Manager, REIT property manager, auditor or valuer or any party
connected to them in the Act, these Regulations or the scheme
documents.
(2) On any matter in respect of which a vote is to be taken, then any
REIT securities holder present in person or by proxy shall be
entitled to one vote on a show of hands.
(3) A poll may be demanded on any vote or be required by the
Chairperson of the meeting. In the case of a poll then—
(a) votes may be given either personally or by proxy; and
(b) every REIT securities holder shall have one vote for each
vote held by the REIT securities holder.

6. Adjournment and minutes

(1) The Chairperson may adjourn any meeting at which a quorum is
present with the consent of the meeting and must adjourn if
directed by the meeting.

(2) The Trustee shall be responsible for ensuring that—

(a) minutes are prepared within seven days for all meetings of
REIT securities holders and that the minutes record the
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 proceedings and all resolutions put to the meeting and the
results of any votes and that the minutes are presented to the
Chairperson for signing;

(b) any minutes presented to the Chairperson shall be signed

within seven days of presentation and recorded in the
minute book and a signed copy provided to the REIT
Manager provided that-

(i) if the Chairperson is not satisfied that the minutes

prepared are correct and on request, these are not
corrected by the Trustee, then the Chairperson shall
be responsible for amending the draft minutes and
signing a corrected copy which shall be recorded in
the Minute book; and

(ii) a signed copy of the corrected minutes are forwarded

to the Trustee, the REIT Manager and the Authority.

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 SCHEDULE –6

Reg. 130
FEES

PART - 1

FEE (UG.
ITEM MATTER
SHS)
APPLICATION, AUTHORISATION OF
SCHEME, APPROVAL OR PROSPECTUS OF
1
INFORMATION MEMORANDUM,
CONVERSION AND ANNUAL FEES
Non-refundable application fee or application
(a) 750,000/=
renewal fee for authorisation of REIT scheme
(b) Approval or licence fee 3,000,000/=
(c) Annual licensing or renewal fee 3,000,000/=
Approval fee of Prospectus or Information
(d) 10,000,000/=
memorandum
Re-submission of a Prospectus due to material
(e) 4,000,000/=
Omissions or discrepancies
TRUSTEE AND REIT MANAGER LICENCE
2
AND RENEWAL FEES
(a) A non-refundable licence application fee 750,000/=
(b) Annual licence fee for a Trustee and REIT manager 3,000,000/=
(c) Replacement of a licence 50,000/=
(d) Certification of licence fee 50,000/=

GRACE JETHRO KAVUMA,

Chairperson, Capital Markets Authority.

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