Urban Logistics REIT plans internalisation of management functions
Urban Logistics REIT PLC on Friday said it is seeking shareholder approval for an agreement to internalise its management function to reduce costs.
The UK-focused logistics real estate investment trust said the internalisation will take place via the acquisition of the management vehicle.
Urban Logistics said the proposal has been agreed with its investment adviser Logistics Asset Management LLP.
Under the plans, Richard Moffitt will become chief executive officer and Justin Upton and Jamie Waldegrave will join the board of the company as chief investment officer and chief financial officer respectively.
The initial payment for the internalisation is £6.8 million, to be paid in shares in Urban Logistics.
There is a contingent consideration of up to a further £5.6 million, which depends on the average closing share price of Urban Logistics over the three months before the first anniversary of the completion.
The vesting will progressively increase from 20% at 130 pence to 100% at a share price of 158 pence.
Urban Logistics said it estimates a reduction in annual operating costs of around £1.4 million per year, with an improvement in EPRA earnings.
It said it intends to transfer its listing to the ‘equity shares (commercial company)’ listing category upon completing the internalisation.
The company will hold a general meeting aiming at receiving shareholder approval for the plan. It expects the internalisation to become effective in the second quarter of 2025.
Chair Nigel Rich said: ‘The board strongly believes that the company is exceptionally well positioned in what is a highly attractive segment of the UK real estate market. The proposed internalisation will strengthen the alignment of interests between the management and shareholders as we look to deliver on the strong potential returns available to the company in both the short and long term.’
Supermarket Income REIT set out plans for a similar move on Tuesday.
Urban Logistics REIT shares were down 0.5% to 115.40 pence in London on Friday morning.
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