ERET European Real E

TIDMERET

RNS Number : 8187T

European Real Estate Inv Tst Ltd

08 October 2014

European Real Estate Investment Trust Limited

8 October 2014

Renewal of existing management arrangements

On 5 September 2012 the Company announced the appointment of Schroder Property Investment Management Limited ("Schroders") as its asset and investment manager.

The Board is pleased to confirm that the Company has renewed its management arrangements with Schroders with effect from today.

The Company has further extended its agreement with Klockensteijn B.V. to work alongside Schroders to provide consultancy services to the Company to facilitate the sales programme.

Under the terms of the restated management agreement, the Company has agreed to pay Schroders a management fee monthly in advance at a rate equal to one twelfth of GBP0.4 million per annum for a two year period.

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:

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

b) a conditional fee equal to 15% of the gross sales price received by the Company for any sale of its Nice asset which exceeds the valuation as at 30 June 2014; and

c) for all Panrico properties other than the Murcia property, an additional 0.50% of the gross sales price received by the Company in the event no external sales brokerage fees are paid in respect of such sale plus an additional 0.25% of the gross sales price received if such sales price is greater than the value of that property as at 30 June 2014, with a discretionary bonus to be paid at the absolute discretion of the Board.

For the avoidance of doubt, in the event any of the Group's properties are sold to a member of the Schroders group, or an investment vehicle managed by Schroders or its group, no performance fee shall be payable.

The renewed appointment of Klockensteijn is for a fixed period to 31 March 2015 under the terms of which Klockensteijn will continue to provide consultancy services to the Company, and the key consultant shall remain Mr Van der Vlist.

Under the revised terms of their appointment, the annual consultancy fee has been reduced to EUR30,000 per annum. The performance fee and hurdle rate for the payment of any such fee remains as set out in the announcement by the Company on 27 October 2011.

In accordance with the Company's stated related party policy, the renewed engagement of both Schroders and Klockensteijn requires (i) the approval of a majority of the independent Directors and ii) a fairness opinion in respect of such transaction from an independent adviser.

The independent Directors consider the ongoing engagement of Schroders and Klockensteijn to be in the best interests of Shareholders as a whole. Cenkos Securities, as the Company's independent adviser for these purposes, considers the proposals to be fair and reasonable so far as Shareholders are concerned. In providing its advice to the Board, Cenkos Securities has taken into account the Board's commercial assessments.

For further information, please contact:

Praxis Fund Services Limited

   Shona Darling                                       Phone: +44(0) 1481 755528 

Cenkos Securities plc

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

Schroder Property Investment Management Ltd

   Duncan Owen / Tony Smedley            Phone: +44(0) 20 7658 6000 

This information is provided by RNS

The company news service from the London Stock Exchange

END

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