In March the board of the property investment trust terminated its management agreement with Invista Real Estate Investment Management.Schroder Property Investment Management will take over the portfolio, effective in October.
Although Schroders was selected earlier this summer the board delayed its stock market announcement after receiving a merger approach from Picton Property Income Limited, formerly known as ING UK Real Estate Income Trust. The merger discussions are continuing following a non-binding indicative offer received at the end of July.
If the merger with Picton does go ahead, IFPT’s board does not have to pay Schroder’s a termination fee nor provide any notice. Until that deal has been decided, Schroders will be working with the board and its former managers to transition the portfolio.
Under the terms of the new management agreement, Schroders will be paid 1.1%pa of the net asset value of Invista Foundation Property. According to the board the new fee, lower than it paid to its former managers, represents a savings of £1.8m.
As of 30 June IFPT’s direct property portfolio was valued at £326.78m and had 56 assets spread across the retail, office and industrial sectors. Picton Property Income’s property portfolio was valued at £426m, also as of 30 June, and its NAV was £209m. Both the Picton and IFPT are domiciled in Guernsey and listed on the London Stock Exchange.
As to the proposed merger, Picton has argued the combination would provide both trusts with added liquidity and resource and would result in an overall lower TER for investors.
