REG - Life Science REIT - Amendment to Investment Advisory Agreement

Life Science ReitAnnouncement

31/03/2025 07:15

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RNS Number : 7863C  Life Science REIT PLC  31 March 2025

 

 

For immediate release

31 March 2025

Life Science REIT plc

("LABS" or the "Company")

Amendment to Investment Advisory Agreement

As announced at the time of the strategic review and formal sale process on 14
March 2025, the Company was in the final stages of negotiation in respect of
revisions to the investment advisory agreement between the Company, Ironstone
Asset Management Limited ("Ironstone") and G10 Capital Limited (the
"Investment Advisory Agreement" or "IAA"). The Board of LABS has now reached
an agreement with Ironstone on certain revisions to the IAA, in particular in
relation to the basis of its fee calculation.

With effect from the quarter commencing 1 April 2025, the investment advisory
fee will move from being calculated on net asset value to the lower of net
asset value and the average market capitalisation for the quarter. In
addition, the rate applied to the initial fee threshold of £500 million has
been lowered from 1.1 per cent. to 1.0 per cent., as shown below.

 Threshold                                            Annual advisory fee rate (percentage of the lower of (i) net asset value and
                                                      (ii) average market capitalisation for the quarter)
 Up to and including £500 million                     1.0 per cent.
 Above £500 million up to and including £1 billion    0.9 per cent.
 Above £1 billion                                     0.75 per cent.

As part of the transition to this new fee arrangement, there will be an
adjustment in the calculation of the fee for the period from 1 April 2025 to
31 December 2027. Under this transitional arrangement, the basis of the fee
calculation will be subject to a floor of no lower than 70% of net asset
value. In order to remain aligned with the new fee basis, in the event that
the Company's shares cease to be admitted to trading on the Main Market of the
London Stock Exchange (i) following a takeover offer, average market
capitalisation will be calculated on the basis of the offer value over the
remainder of the term of the IAA and (ii) in all other circumstances, average
market capitalisation will be calculated on the basis of the closing
mid-market price of the shares on the last day of dealing.

As part of the agreed revisions, Ironstone will no longer be required to
acquire or subscribe for shares in the Company in relation to 15 per cent. of
the value of the advisory fee received.

Based on the transitional provisions and the last reported unaudited net asset
value as at 31 December 2024, this would result in a material saving for the
Company of £1.0 million per annum, equating to an additional 0.3 pence in
earnings per share.

 

FOR FURTHER INFORMATION, PLEASE CONTACT:

 

 Life Science REIT plc

 Claire Boyle, Chair                                                            via Panmure Liberum

 MUFG Corporate Governance Limited - Company Secretary

 labs_cosec@cm.mpms.mufg.com

 Panmure Liberum - Financial Adviser & Corporate Broker                         +44 20 7886 2500

 Tom Scrivens / Chris Clarke / Alex Collins / Tim Medak

 labsstrategicreview@panmureliberum.com

 G10 Capital Limited - AIFM                                                     +44 20 7397 5450

 Maria Baldwin

 FTI Consulting - PR Adviser

 Dido Laurimore / Richard Gotla / Oliver Parsons                                +44 20 3727 1000

 LifeScienceReit@fticonsulting.com (mailto:LifeScienceReit@fticonsulting.com)

About the Company

Life Science REIT plc is a specialist property business focused on the UK's
growing life science sector. The Company's portfolio of assets is located
across the "Golden Triangle" of research and development hubs in Oxford,
Cambridge and London's Knowledge Quarter and its strategic vision is to become
the property provider of choice for life science companies in the UK.

Life Science REIT is addressing the acute demand-supply imbalance for
laboratory space in the "Golden Triangle", which is characterised by low
vacancy rates and prime rental increases. The UK life science sector itself is
underpinned by strong structural drivers, including an ageing population and a
supportive regulatory environment as well as the growing interdependence with
technology, which is expanding the life science spectrum, driving strong
demand for laboratory space.

The Company's diverse portfolio of assets ranges from a 20-acre science park
currently under development through to fully let buildings, with an important
part of the Company's strategy being the conversion of existing properties to
laboratory space.

The Company's investment policy is focused on capital growth whilst also
providing a growing level of income.

The Company trades on the Main Market of the London Stock Exchange under the
ticker LABS.

LEI Number: 213800RG7JNX7K8F7525.

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