Argosy outlines savings from moving management inhouse
Having shunned DNZ, property trust moves to Plan B.
Having shunned an approach from DNZ Property Fund, Argosy Property Trust is writing to unitholders detailing the savings from its proposal to internalise management of its property portfolio.
Argosy is proposing to pay $32.5 million to Argosy Property Management Ltd, a unit of ANZ's OnePath, so it can bring management inhouse.
Argosy said its normalised gross distributable earnings per unit will increase by 6.9 percent after tax because of $4.2 million of cost savings from internalising management.
This is because the external management contract consists of a base fee of $5.8m, an assumed notional performance fee of $400,000, property management fees of $1.5m and time-in-attendance fees of approximately $350,000.
Argosy expects it to costs of $3.85m a year to run the trust following the internalisation.
Additional financing costs of $1.2m on the bank funding to purchase the management contract will offset some of the gains.
Argosy said that a takeover by DNZ Property may see the forfeiture of tax losses, and the incurrence of transaction costs, significantly reducing overall transaction economics, particularly in the first year.
NZPA
Fri, 03 Jun 2011
Fri, 03 Jun 2011
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Argosy outlines savings from moving management inhouse
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