ERET European Real E

TIDMMERE

RNS Number : 6009L

Matrix European Real Estate Inv Tst

05 September 2012

5 September 2012

Matrix European Real Estate Investment Trust Limited (the "Company")

Appointment of new investment manager and early termination of existing management arrangements

As announced on 15 June 2012, the Board entered into a Heads of Agreement under which it would, subject to finalising the necessary documentation and the receipt of any necessary approvals, appoint Schroder Property Investment Management Limited ("Schroders") to manage the Company's portfolio.

The Board is pleased to confirm the appointment of Schroders as asset and investment manager to the Company with effect from 5 September 2012.

Crispian Collins, Chairman of the Company, commented:

"We welcome the opportunity to work with Schroders and believe that their appointment is one which ultimately should realise best value for our shareholders in a challenging environment for the wider European commercial property sector."

Duncan Owen, Head of Property Funds at Schroders, commented:

"Schroders is looking forward to utilising our experience as manager of listed real estate investment trusts in order to maximise the returns for shareholders of the Company. Our Pan European investment team have worked hard over the last three months both with the Company and its current advisors, to prepare for the handover. We are now ready to drive forward the strategy set out by the Board."

Klockensteijn B.V. shall work alongside Schroders and continue to provide consultancy services to the Company in order to facilitate the sales programme.

Under the terms of the management agreement, the Company has agreed to pay Schroders an aggregate base management fee monthly in advance at a rate equal to one twelfth of EUR1 million per annum for an initial 12 month period following their appointment, reducing to EUR0.6 million for the second year, subject to a minimum aggregate management fee of EUR1.6 million for the two year period. In the event that Schroders continues to manage the portfolio beyond the second anniversary of its appointment, a management fee shall be payable monthly in advance at a rate equal to one twelfth of 1% of the last published net asset value of the Company (or another market rate as agreed between the Company and Schroders).

In addition, the Company will pay Schroders a performance fee based on sales of properties in the portfolio and shareholder returns achieved. The performance fee will be calculated on the following basis:

-- on the completion of each property disposal, a fee equal to 0.25% of the gross sales value achieved; and

-- a conditional fee equal to 0.40% of the gross sales value achieved on completion of each property disposal prior to the second anniversary of Schroders' appointment to be held in escrow and released on the earlier of (a) the second anniversary of Schroders' appointment, or (b) the final date upon which the Company returns capital to its shareholders, or (c) the date upon which the Company's shareholders receive consideration (whether cash or equivalent consideration, including shares) in respect of a take-over offer, amalgamation, merger proposal or analogous event by a third party offeror (such date being the "Payment Date").

The payment of this conditional fee is conditional upon the total shareholder returns (whether or not returned to shareholders as cash or equivalent consideration (including shares)) being 160 pence per share (this being GBP57.53 million of capital) (combining cash and remaining NAV) in the period from 25 October 2011 to the Payment Date (the "Performance Hurdle"). The Performance Hurdle will be increased at a rate of 5% per annum (compounded daily on a straight line basis) from 25 October 2011 to the Payment Date.

As previously announced, the Company has been actively marketing its property assets for sale and has agreed with Schroders that the performance fees in respect of one of its assets will be reduced by 50% in the event of a sale, subject to certain conditions.

The appointment of Schroders shall continue in force until the second anniversary of its appointment but may be extended by mutual consent of the parties (and thereafter shall be subject to six months' written notice by either party).

The existing management and advisory arrangements with Matrix Property Fund Management LLP and Matrix Property Fund Management (Guernsey) Limited were terminated with effect from close of business on 5 September 2012, with a termination fee (including management fees for the period from 1 July 2012 to 14 October 2012) of GBP486,958 having been paid. Certain employees of Matrix Property Fund Management who have been involved in the management of the Company's assets have been employed by Schroders as part of the transfer.

Further to the change of manager, the Company will shortly be mailing a circular to shareholders in respect of convening an Extraordinary General Meeting to approve the change of name of the Company to European Real Estate Investment Trust Limited.

Enquiries:

Cenkos Securities plc

Will Rogers Phone: +44 (0) 20 7397 1920

Dion Di Miceli Phone: +44 (0) 20 7397 1921

Praxis Fund Services Limited

   Shona Darling                                   Phone:                        +44(0) 1481 755 528 

Schroder Property Investment Management Ltd

   Duncan Owen                                    Phone:                        +44 (0) 20 7658 4954 

This information is provided by RNS

The company news service from the London Stock Exchange

END

MSCDMGGLKKFGZZM

European Real E (LSE:ERET)
Historical Stock Chart
Von Jan 2025 bis Feb 2025

European Real E (LSE:ERET)
Historical Stock Chart
Von Feb 2024 bis Feb 2025