Phoenix Spree Deutschland agrees lower management fees – Phoenix Spree Deutschland Limited has entered into a new property advisory and investor relations agreement with PMM Residential Limited. The new agreement replaces the existing property advisory agreement. It will reduce future management fees and result in significant cost savings:
Based on the EPRA NAV as at 30 June 2018, the agreement represents an annual saving of EUR838k, rising to EUR875k per annum should EPRA NAV reach EUR500m.
In respect of any finance fees and transaction fees, any amounts paid under the new agreement will be deducted from the management fee. For the financial year ending 31 December 2018, these fees are estimated to equal approximately EUR130k.
For the period from 1 July 2018 to 31 December 2020, the performance fee payable will be reduced by 20% and by 25% for periods thereafter.
The performance fee will now be satisfied entirely through the issue of new PSDL shares at a price equal to the higher of EPRA NAV per share or the then share price, rather than through the payment of cash used to subscribe for new shares.
The initial term will be to 31 December 2022.
The property advisory team will remain substantially the same, with the exception of Paul Ruddle, co-founder of PMM Partners, who has decided to step back from an executive role within the PMM Group. Paul will act as a consultant for an initial 18-month period, ensuring that it continues to benefit from his advice and support.
Robert Hingley, chairman of PSDL, commented: “This is an excellent outcome for the company. We are very pleased on behalf of shareholders to have secured PMM Group’s continued expertise as property adviser until at least the end of 2022, as well as to have reduced the fees paid by the company as a proportion of EPRA NAV for those services. We look forward to building on this relationship over the coming years and continuing our strong record of performance.”
PSDL : Phoenix Spree Deutschland agrees lower management fees