New Management Agreement Term

RNS Number : 8087S

F&C Commercial Property Trust Ld

16 September 2010

 



F&C Commercial Property Trust Limited (the "Company" or "FCPT")

16 September 2010

New management agreement terms

On 9 August 2010 it was announced that the Board, with its advisers, would consider the future of the Company. This followed the rejection by independent shareholders of the proposed scheme to merge the interests of FCPT and UK Commercial Property Trust Limited. This review process is now complete and the Board is pleased to announce that it has agreed new terms on which F&C REIT Property Asset Management plc ("F&C REIT") will continue to manage FCPT's property portfolio.

The Board and F&C REIT have agreed various enhancements to the strategic management of the Company and its portfolio as well as a significant reduction in the annual management fees.

The key elements of the revised fee terms for portfolio management will be as follows.

§   Annual management fees, including performance fees, will be capped at 0.60 per cent. of average total assets, reduced from the previous cap of 1.0 per cent.

§   The base management fee will be 0.50 per cent. per annum of net assets (reduced from the previous base fee of 0.60 per cent per annum of the gross value of invested assets)  and reduced to 0.25% per annum on cash net of gearing in excess of 5% of net assets.

§   The annual performance fee will be subject to the above cap but will be otherwise unchanged, save that the performance fee will be rebased as at 1 October 2010. F&C REIT has agreed to waive the carry forward of any excess out-performance as at 30 September 2010.

§   The amendments to the management arrangements will take effect from 1 October 2010. The existing notices that FCPT served on its manager to terminate the current management arrangements have been withdrawn, subject to execution of the amended investment management agreements.

The revised management terms, which the Board considers to be competitive, will result in a significant reduction in the Company's total expense ratio and will have a material beneficial impact on the Company's dividend cover.  The Board is moving forward with F&C REIT for the constructive development of the Company and for the benefit of all the Company's shareholders.

John Stephen, Chairman of FCPT, said:

"The Directors are delighted to have agreed new management terms with F&C REIT which will result in reduced expenses and secure continuity of portfolio management under F&C REIT and Richard Kirby. With a top quartile performance track record and a well diversified and prime property portfolio, we believe FCPT has a strong future as an independent company and we look forward to delivering value for all of our shareholders."

Enquiries:

The Company

John Stephen, Chairman

Tel: [phone]

Chris Russell, Deputy Chairman

Tel: [phone]

F&C REIT

Nick Criticos

Tel: [phone]

Jason Hollands

Tel: [phone]

 

END

 

 

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