Source - RNS
RNS Number : 9392G
Custodian REIT PLC
02 June 2017



2 June 2017

Custodian REIT plc


("Custodian REIT" or "the Company")


Amendment to Investment Management Agreement


Custodian REIT (LSE: CREI), the UK commercial real estate investment company, announces that the terms of its Investment Management Agreement ("IMA") with its external discretionary fund manager, Custodian Capital Limited ("the Investment Manager"), a subsidiary of Mattioli Woods plc, have been amended following expiry of the IMA's initial three year term.


In light of the positive performance of the Company since admission to trading on the London Stock Exchange in 2014 ("Admission"), the Board has agreed a further three year term with 12 months' notice to the Investment Manager's ongoing engagement, from 1 June 2017.  Fees payable to the Investment Manager under the IMA have been amended to include:


·     A step down in the property management fee from 0.75% to 0.65% of net asset value ("NAV") applied to NAV in excess of £500 million; and

·     A step down in the administrative fee from 0.125% to 0.08% of NAV applied to NAV between £200 million and £500 million and a further step down to 0.05% of NAV applied to NAV in excess of £500 million.


All other key terms of the IMA remain unchanged.


The Board considers these amendments to the IMA to be in the best interests of the Company's shareholders because:


·     The administrative fee will fall immediately, increasing cover on target dividends for the year ending 31 March 2018;

·     Further growth in NAV, particularly above £500 million, will further reduce the Company's ongoing charges ratio and increase dividend capacity; and

·     Another three year term provides the Investment Manager with security of tenure and allows further investment in the dedicated systems and people providing its services under the IMA.


For the purposes of the Listing Rules, the Investment Manager is a related party of the Company and the amendments to the IMA fall within Listing Rule 11.1.10 R, thus not requiring a shareholder vote.


David Hunter, Chairman of Custodian REIT, commented:


"The Board has been delighted with the performance of the Investment Manager since Admission, particularly the timely deployment of new monies on high quality assets, securing the earnings required to fully cover target dividends.  The revised IMA terms secure an immediate cost reduction for shareholders and will provide further economies of scale should NAV growth continue."



- Ends -


For further information, please contact:


Custodian Capital Limited


Richard Shepherd-Cross / Nathan Imlach / Ian Mattioli MBE

Tel: +44 (0)116 240 8740


Numis Securities Limited


Nathan Brown / Hugh Jonathan

Tel: +44 (0)20 7260 1000




Ed Gascoigne-Pees

Tel: +44 (0)20 3757 4984


Notes to Editors


Custodian REIT plc is a UK real estate investment trust, which listed on the main market of the London Stock Exchange on 26 March 2014.  Its portfolio comprises properties predominantly let to institutional grade tenants on long leases throughout the UK and is characterised by properties with individual values of less than £10 million at acquisition. 


The Company offers investors the opportunity to access a diversified portfolio of UK commercial real estate through a closed-ended fund.  By targeting sub £10 million lot size, regional properties, the Company intends to provide investors with an attractive level of income with the potential for capital growth. 


Custodian Capital Limited is the discretionary investment manager of the Company. 


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