Update on Investment Management Agreement

RNS Number : 0124E

Irish Residential Prop REIT PLC

03 November 2020

 

  3 November 2020

Irish Residential Properties REIT plc

(the "Company" or "IRES")

Update on Investment Management Agreement

IRES provides the following update on the investment management agreement between the Company, IRES Residential Properties Limited and IRES Fund Management Limited (the "Investment Manager" or "IRES FM") (the "IMA"). IRES FM is a wholly owned subsidiary of CAPREIT LP.

The IMA governs the provision of portfolio management, risk management and other related services to the Company by IRES FM on a day-to-day basis. In addition, IRES FM acts as the Company's alternative investment fund manager ("AIFM") for the purposes of the AIFM Regulations.  In providing its services to the Company under the IMA, the Investment Manager also has access to the expertise and resources provided to it by CAPREIT LP, pursuant to the services agreement (the "Services Agreement").

The IMA has an initial term of five years and thereafter continues for consecutive five-year periods unless duly terminated sooner by either party in accordance with the IMA. In advance of the expiry of the initial IMA term on 1 November 2020, an independent sub-committee of the Board (the "Board Sub-Committee") was appointed in November 2019 in order to conduct a scheduled review of the IMA and Services Agreement, evaluate the strategic options available to IRES in relation to them and consider certain related matters.

Under the terms of the IMA, the Company may terminate the IMA on or after 1 November 2020 if it determines, on or after that date, that it is in its best interests to internalise the management of the Company and, if applicable, to apply to the Central Bank of Ireland for authorisation as an alternative investment fund manager.  In such circumstances, the IMA provides for the Company to purchase the issued shares of the Investment Manager on a liability free (other than liabilities in the ordinary course of business) / cash free basis for €1.  The Investment Manager has the ability to terminate the IMA by serving 12 months' notice of termination at any time after 1 November 2019.  The Services Agreement terminates automatically on the termination of the IMA.  Certain transitional provisions apply under the IMA in the context of a termination to effect an orderly transition of the services to the Company.

The Board Sub-Committee, in conjunction with advisers, has engaged in discussions with the Investment Manager and CAPREIT LP in relation to the potential terms of a revised IMA whilst also evaluating the relative strategic and financial merits of the various alternatives available.

As at 1 November 2020, being the expiry date of the initial IMA term, the Board Sub-Committee has not reached agreement on new terms for a revised IMA with IRES FM. Therefore, in accordance with its terms, the IMA shall continue at this point under the existing terms. In conjunction with the rollover of the IMA, IRES will augment the management resources of the Company in line with its growth strategy and increased scale.

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For further information please contact:

Irish Residential Properties REIT plc
Sarah Stokes, Investor Relations    Tel: [phone]

Margaret Sweeney, Chief Executive Officer    Tel: [phone]

For Media Requests:

Q4PR
Gerry O'Sullivan                                                                           Tel: + 353 (0) 87 259 7644

About Irish Residential Properties REIT plc

Irish Residential Properties REIT plc (together with IRES Residential Properties Limited, the "Group") is a growth oriented Real Estate Investment Trust that is focused on acquiring, holding, managing and developing investments primarily focused on private residential rental accommodations in Ireland. The Group currently owns 3,834 apartments and houses for private rental in Dublin and Cork with an additional 69 units due for delivery between now and the end of H1 2022 under pre-purchase contracts. The Company has a further 66 units currently under construction directly on owned sites with planning approval to develop an additional 543 residential units on its existing sites. The Company's shares are listed on Euronext Dublin. Further information in respect of the Company can be obtained from the Company's website at www.iresreit.ie

Note on forward-looking information

This note applies if and to the extent that there are forward-looking statements in this Announcement. This Announcement may contain forward-looking statements, which are subject to risks and uncertainties because they relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends, and similar expressions concerning matters that are not historical facts. Such forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results, performance or achievements of the Company or the industry in which it operates, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. The forward-looking statements referred to in this paragraph speak only as at the date of this Announcement. Except as required by law or by any appropriate regulatory authority, the Company will not undertake any obligation to release publicly any revision or updates to these forward-looking statements to reflect future events, circumstances, unanticipated events, new information or otherwise including in respect of the Covid-19 pandemic, the uncertainty of its duration and impact, and any government regulations or legislation related to it.

 

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