15 August 2016
Ground Rents Income Fund plc
("GRIF" or the "Company)
AMENDMENTS TO PROPERTY ADVISER AGREEMENT
The Board of Ground Rents Income Fund (LSE: GRIO), a listed real estate investment trust (REIT) investing in UK ground rents, announces that on 12 August 2016 it agreed two amendments to the property adviser agreement (the "Agreement") with the Company's property and investment adviser, Brooks Macdonald Funds Limited (the "Adviser").
Pursuant to the Agreement, the Adviser collects 'Consent Fees'¹ and 'Notice Fees'² ("Fees") from leaseholders on behalf of GRIF. The volume of Consent Fees, in particular, and the revenues generated from them have increased significantly ahead of expectations. In the 12 months to 30 September 2015, the Fees payable to GRIF totalled £201,629, against a budget of £129,000, and in the ten months to 31 July 2016 the Fees totalled £317,886 (unaudited) against a budget of £190,000.
The Board of GRIF has agreed to amend the Agreement, so that the Adviser will be paid 20 per cent. of Fees received, effective from the start of the current financial year on 1 October 2015, in order to compensate the Adviser for the increase in costs incurred due to the higher volume of Fees and for the commensurate increase in the Adviser's workload, which was not envisaged when the Agreement was entered into.
The Board has also agreed with the Adviser to increase the notice period in the Agreement by three months to 12 months, or, in the event that either (a) the entire portfolio of properties owned by the Company is disposed of, or (b) a takeover offer (as defined in section 974 of the Companies Act 2006) is made in relation to the Company, then the notice period will be increased to 18 months. This reflects the complexity a management handover would entail due to the large number of properties and tenancies in the Company's portfolio.
¹ 'Consent Fees', which are levied by the freeholder, are typically for permission to amend a specific element of the lease or alter the underlying bricks and mortar of the property in some way.
² 'Notice Fees', which are levied by the freeholder, are usually in regard to the sale or re-mortgage of a property.
FOR FURTHER INFORMATION CONTACT:
Brooks Macdonald Funds: Simon Wombwell / James Agar |
+44 (0)207 499 6424 |
N+1 Singer (Broker): James Maxwell / Liz Yong |
+44 (0)207 496 3000 |
Tavistock (Media/Analysts): James Whitmore/Jeremy Carey |
+44 (0) 207 920 3150 |
Appleby Securities (Channel Islands) Limited (Sponsor): Kate Storey |
+44 (0)1481 755 620 |
