REG - Irish Res Prop REIT - IMA Termination Notice and Management Appointments

DCCAnnouncement

01/04/2021 08:05

RNS Number : 2223U
  
Irish Residential Prop REIT PLC
  
01 April 2021
  
 

1 April 2021
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
 
Irish Residential Properties REIT plc
(the "Company" or "IRES REIT")
Receipt of Termination Notice from IRES Fund Management Limited,
Update regarding potential Internalisation,
and
Appointments of Finance Director and Company Secretary & General Counsel
 
Receipt of Termination Notice from IRES Fund Management Limited
IRES REIT notes the announcement made on 31 March 2021 by CAPREIT Limited Partnership ("CAPREIT") and confirms that the Company has received a twelve (12) months' notice of termination from IRES Fund Management Limited (the "Investment Manager" or "IRES Fund"), a wholly-owned subsidiary of CAPREIT, of the investment management agreement between the Company, IRES Residential Properties Limited and the Investment Manager (as amended or restated from time to time) (the "Investment Management Agreement" or "IMA"). 
The notice stated that termination of the IMA will take effect on 31 March 2022. As noted in the announcement made by CAPREIT, notwithstanding the serving of termination notice by IRES Fund, IRES Fund will continue to provide investment management services in line with the terms and provisions of the IMA up to the effective date of the termination of the IMA. Certain transitional provisions apply under the IMA in the context of a termination to effect an orderly transition of the services to the Company.
In providing its services to the Company under the IMA, the Investment Manager is supported by CAPREIT pursuant to the Services Agreement. The Services Agreement terminates automatically on the termination of the IMA.
As previously noted in the Company's announcements dated 3 November 2020 and preliminary FY 2020 results announcement on 19 February 2021, the Investment Manager had the ability to give 12 months' notice of termination of its appointment at any time after 1 November 2019. 
IRES REIT retains its separate right under the IMA to terminate the IMA with immediate or subsequent effect prior to the termination taking effect on 31 March 2022 if it determines that it is in its best interests to internalise the management of the Company and, if applicable, to apply to the Central Bank of Ireland for authorisation as an alternative investment fund manager. In such circumstances, the IMA provides for the Company to purchase the issued shares of the Investment Manager on a liability free (other than liabilities in the ordinary course of business) / cash free basis for €1 ("Internalisation"). 
As previously noted, in advance of the expiry of the initial IMA term on 1 November 2020, an independent subcommittee of the Board appointed in November 2019 (the "Board Sub-Committee"), in conjunction with advisers, has been evaluating the relative strategic and financial merits of the various options available to the Company in relation to the IMA and Services Agreement. The Company has also undertaken an internalisation feasibility and planning exercise with the assistance of Grant Thornton. The objective of this exercise was to review the existing functions and services being carried out by IRES Fund and CAPREIT on behalf of IRES REIT, and to identify the nature and extent of all such functions and services which the Company would need to establish should the IMA and related Services Agreement be terminated, including the process and estimated costs that would be incurred in replicating these. In addition, the Company has focussed on strengthening its internal management resources, in particular identifying a Finance Director and Company Secretary & General Counsel as described in more detail below. 
As part of its evaluation of the relative strategic and financial merits of the various options available to the Company in relation to the IMA and Services Agreement, the Company has been working in conjunction with CAPREIT and the Investment Manager to establish (i) a plan for possible Internalisation and (ii) terms for the potential acquisition of the Investment Manager from CAPREIT. Following the receipt of the termination notice from the Investment Manager, the Board Sub-Committee believes it is increasingly likely that the Company will pursue Internalisation in line with the Company's rights under the IMA. However, at this point, no decision has been made by the Company to internalise, or otherwise. Further announcements in relation to the IMA will be made by the Company ahead of its forthcoming annual general meeting scheduled to be held on 11 May 2021.
The Company welcomes the statement from CAPREIT that both the Investment Manager and CAPREIT intend to work constructively and cooperatively with IRES REIT in the interim period prior to the expiry of the 12-month termination notice period, or any Internalisation notice period as may be appropriate. The Company wishes to reiterate its appreciation for the support of CAPREIT for IRES REIT, both as a significant shareholder and as the owner of the Investment Manager and provider of services through the Services Agreement. The ongoing involvement and backing of CAPREIT has been an important factor in the successful establishment and scaling of IRES REIT since inception. The Company looks forward to engaging with CAPREIT as an ongoing significant shareholder in IRES REIT in the future.
Appointments of Finance Director and Company Secretary & General Counsel
As noted previously, IRES REIT recently commenced a process for the augmentation of management resources within IRES REIT itself, in line with the Company's growth strategy and increased scale. As part of this process, the Company is today pleased to announce two key appointments to the management team of the Company.
Mr. Brian Fagan will join the Company as Finance Director with effect from 26 April 2021. Brian is a Chartered Accountant with extensive experience in the property industry. He is joining IRES REIT from his current role as Chief Financial Officer with Island Capital. Brian previously held roles with Ballymore Properties and DCC plc.     
Ms. Anna-Marie Curry will join IRES REIT as Company Secretary & General Counsel with effect from 1 July 2021. Anna-Marie is a Solicitor, and previously worked with Arthur Cox and is joining the Company from her current role as Company Secretary and General Counsel with Bord na Móna plc.
Commenting on the appointments, IRES REIT Chief Executive Officer, Margaret Sweeney said: "I am very pleased to welcome Brian Fagan and Anna-Marie Curry to the management team of IRES REIT. As the Company continues to grow and develop in line with its strategy, the appointment of additional management resources was identified as a key enabler to ensure that the Company remained well positioned to capitalise on further opportunities in the Irish residential market. The extensive experience and expertise of Brian and Anna-Marie will be tremendous assets to the Company and their appointments represent the onset of an exciting new phase for IRES REIT which we believe will deliver long term value for all our stakeholders." 
End
Enquiries:



Irish Residential Properties REIT plc
 Michelle Ang, Investor Relations  
Margaret Sweeney, Chief Executive Officer                                             


 
Tel: + 353 (0) 87 956 1138
Tel: + 353 (0) 1 557 0974




 
For Media Requests
Q4PR
Gerry O'Sullivan


 
 
 
Tel: + 353 (0) 87 259 7644



 
This announcement contains inside information for the purposes of the Market Abuse Regulation (Regulation (EU) No 596/2014). The person responsible for arranging release of this announcement on behalf of the Company is Margaret Sweeney, Chief Executive Officer.
About Irish Residential Properties REIT plc 
Irish Residential Properties REIT plc, together with IRES Residential Properties Limited, (the "Group") is a growth oriented Real Estate Investment Trust that is focused on acquiring, holding, managing and developing investments primarily focused on private residential rental accommodations in Ireland. The Group currently owns 3,836 apartments and houses for private rental in Dublin and Cork with an additional 69 units due for delivery between now and the end of H1 2022 under pre-purchase contracts. The Company has a further 61 units currently under construction directly on owned sites with planning approval to develop an additional 543 residential units on its existing sites. The Company's shares are listed on Euronext Dublin. Further information in respect of the Company can be obtained from the Company's website at www.investorrelations.iresreit.ie.
Note on forward-looking information 
This note applies if and to the extent that there are forward-looking statements in this Announcement. This Announcement may contain forward-looking statements, which are subject to risks and uncertainties because they relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends, and similar expressions concerning matters that are not historical facts. Such forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results, performance or achievements of the Company or the industry in which it operates, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. The forward-looking statements referred to in this paragraph speak only as at the date of this Announcement. Except as required by law or by any appropriate regulatory authority, the Company will not undertake any obligation to release publicly any revision or updates to these forward-looking statements to reflect future events, circumstances, unanticipated events, new information or otherwise including in respect of the Covid-19 pandemic, the uncertainty of its duration and impact, and any government regulations or legislation related to it.
 
 
 

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