The manager of AMP NZ Office Trust (ANZO) has agreed in principle to some reduction in its management fee entitlement, should the conversion of ANZO to a company go ahead.ANZO unit-holders meeting tomorrow in Auckland are being asked to approve the conver
The manager of AMP NZ Office Trust (ANZO) has agreed in principle to some reduction in its management fee entitlement, should the conversion of ANZO to a company go ahead.
ANZO unit-holders meeting tomorrow in Auckland are being asked to approve the conversion of the unit trust into a company, and a new management fee structure.
An independent adviser's report from KordaMentha into the proposal said the proposed changes were positive for investors, but did not address the issue that an increasing number of investors saw as fundamental with the local listed property entity (LPE) sector, that of external management.
Many investors believed that internalising the management of the LPEs would unlock value for investors that was currently accruing to the external managers, KordaMentha said.
In a statement today, ANZO chairman Craig Stobo said that following discussion with institutional investors, the manager had agreed in principle to a reduction in its management fee entitlement, should the conversion of ANZO to a company go ahead.
Despite that, the resolutions to be considered at tomorrow's meeting would remain unchanged.
If the proposals were approved, ANZO's management fee -- now 0.65 percent of assets -- would be replaced by a tiered base asset management fee of 0.55 percent of the value of investment properties up to $1 billion and 0.45 percent above this point, plus a performance fee based on relative outperformance over other NZX-listed property vehicles.
Mr Stobo said that under the planned amendment announced today a third tier would be introduced into the base asset management fee for the corporatised ANZO, introducing another tier of 0.35 percent for the value of investment properties above $1.5b.
The planned amendment would not affect the performance fee component of the manager's fee entitlement or the manager's entitlements to fees for additional services.
Once the detailed wording of the amendment had been finalised, it would need either approval by ordinary resolution of ANZO investors at a further meeting, or a waiver or ruling from NZX that no such approval was needed.
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