For the Total Global Expense Ratio (TGER), vehicle expenses are classified into Vehicle Fees and Vehicle Costs. As a result, the Debt Arrangement Fees charged by the investment manager for services rendered in arranging debt financing are allocated to the Vehicle Fees category. The Debt Arrangement Costs paid to a lender, broker, or other third party are allocated to the Vehicle Costs category.
As indicated in the INREV NAV and the INREV GAV Q&As, all debt arrangement fees and costs are accounted for at amortised cost and these costs are then charged via amortisation to Profit and Loss over the term of the loan.
A parallel should also be made to the Property Acquisition Fee and the Property Acquisition Cost, as their amortisation for the period/year is included in the calculation of TGER.
It follows that for both Debt Arrangement Fees and Costs, the amortisation for the period/year should be included in the calculation of TGER.