PRS REIT PLC (The) Extension of Investment Advisory Agreement (2324M)

TIDMPRSR

RNS Number : 2324M

PRS REIT PLC (The)

20 January 2021

20 January 2021

PRSR.L

The PRS REIT plc

("the Company" or "the PRS REIT")

Investment Advisory Agreement

The PRS REIT, the closed-ended real estate investment trust which invests in high-quality, new build, family homes in the private rented sector ("PRS"), is pleased to announce an extension of its Investment Advisory Agreement ("IAA") and an amendment to the calculation of asset management fees. These terms have been agreed with Sigma PRS Management Limited, the Investment Adviser ("Investment Adviser") and the alternative investment fund manager, G10 Capital Limited ("AIFM"), and take effect from 1 January 2021.

Extension of IAA

The IAA signed on 3 May 2017 provided for an initial minimum contracted term of five years to 31 May 2022, being the fifth anniversary of the initial admission of the Company's shares to trading on the Specialist Fund Segment of the Main Market of the London Stock Exchange. Under the new agreement, the contracted term has been extended to 31 December 2025, with a one year notice period thereafter.

Amendment to Asset Management Fee

The asset management fee payable to the Investment Adviser (the "Asset Management Fee") has been revised such that the Company will pay a reduced fee for Adjusted Net Asset Values* above GBP500 million.

For Adjusted Net Asset Values up to, and including, GBP500m, the rates remain unchanged.

The Asset Management Fee remains payable monthly in arrears, and the rates used to calculate the Asset Management Fee are as follows:

(i) 1 per cent. per annum of the Adjusted Net Asset Value up to, and including, GBP250 million, which is unchanged;

(ii) 0.90 per cent. per annum of the Adjusted Net Asset Value in excess of GBP250 million and up to, and including, GBP500 million, which is unchanged;

(iii) 0.75 per cent. per annum of the Adjusted Net Asset Value in excess of GBP500 million and up to, and including, GBP1 billion, which is revised - see below;

(iv) 0.50 per cent. per annum of the Adjusted Net Asset Value in excess of GBP1 billion and up to, and including, GBP2 billion, which is revised - see below; and

(v) 0.40 per cent. per annum of the Adjusted Net Asset Value in excess of GBP2 billion, which is new.

The revised rates apply from 1 January 2021.

The Asset Management Fee was previously calculated at a rate of 0.80 per cent. per annum of the Adjusted Net Asset Value in excess of GBP500 million and up to, and including, GBP1 billion, and 0.70 per cent. per annum of the Adjusted Net Asset Value in excess of GBP1 billion.

Summary

These changes provide additional certainty regarding the Company's arrangements with its Investment Adviser, and were considered and approved by the Board following a consultation with the Company's major shareholders as to the best interests of shareholders. The Board firmly believes that its Investment Adviser is uniquely well-placed to support the delivery of the Company's strategy and investment objective, with the Company's right-of-first-refusal on assets within Sigma's PRS property platform, as expressed in the IAA, remaining central to the Company's future success.

Save for the changes stated above, all other terms of the IAA remain unchanged.

DEFINITIONS

 
*Adjusted Net Asset  the Net Asset Value, less an amount equal to 
 Value                the Development Cost incurred in relation to 
                      the PRS Development Sites under construction 
                      at the relevant time by the Company and its 
                      subsidiaries, calculated in accordance with 
                      the Investment Advisory Agreement 
 

For further information, please contact:

 
The PRS REIT plc                                   Tel: [phone] (c/o 
 Steve Smith, Non-executive Chairman                KTZ Communications) 
Sigma PRS Management Limited                       Tel: [phone] 
 Graham Barnet, Mike McGill 
N+1 Singer                                         Tel: [phone] 
 James Maxwell, James Moat, Sebastian Burke 
Panmure Gordon (UK) Limited                        Tel: [phone] 
 Chloe Ponsonby (Corporate Broking), Alex Collins 
 (Corporate Finance) 
G10 Capital Limited (part of the IQEQ Group        Tel: [phone] 
 as AIFM) 
 Paul Turner 
KTZ Communications                                 Tel: [phone] 
 Katie Tzouliadis, Dan Mahoney 
 

NOTES TO EDITORS

About The PRS REIT plc

( www.theprsreit.com )

The PRS REIT plc is a closed-ended real estate investment trust established to invest in the Private Rented Sector and to provide shareholders with an attractive level of income together with the potential for capital and income growth. The Company is investing GBP0.9bn in a portfolio of high quality homes for private rental across the regions, having raised a total of GBP500m (gross) through its Initial Public Offering, on 31 May 2017, and a subsequent placing in February 2018. Both fundraisings were supported by the UK Government's Homes England with direct investments.

LEI: 21380037Q91HU97WZX58

About Sigma Capital Group plc

www.sigmacapital.co.uk

Sigma Capital Group plc ("Sigma") is a PRS, residential development, and urban regeneration specialist, with offices in Edinburgh, Manchester and London. Sigma's principal focus is on the delivery of large scale housing schemes for the private rented sector. The Company has a well-established track record in assisting with property related regeneration projects in the public sector, acting as a bridge between the public and private sectors.

Sigma has created an unrivalled PRS platform, which sources sites and brings together construction resource to develop them, enabling Sigma to deliver an integrated solution to partners. As well as sourcing sites and managing all stages of the planning and development process, Sigma also manages the rental of completed homes through its award winning rental brand 'Simple Life'. The Company's subsidiary, Sigma PRS Management Limited, is Investment Adviser to The PRS REIT plc.

About Sigma PRS Management Limited

Sigma PRS Management Limited is a wholly-owned subsidiary of AIM-quoted Sigma Capital Group plc and is Investment Adviser to The PRS REIT plc. It sources investments and operationally manages the assets of The PRS REIT plc and advises the Alternative Investment Fund Manager ("AIFM") and The PRS REIT plc on a day-to-day basis in accordance with The PRS REIT plc's Investment Policy. The Investment Manager is G10 Capital Limited. Sigma PRS Management Ltd is an appointed representative of G10 Capital Limited, which is authorised and regulated by the Financial Conduct Authority (FRN:648953).

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January 20, 2021 02:00 ET (07:00 GMT)