The fee Prestbury charges for managing Secure Income REIT is to be reduced to reflect an increase in its surplus cash, following a £347m portfolio sale.
Last August, the company sold a portfolio of eight private hospitals let to Ramsay Health Care to Medical Properties Trust for £347m.
The deal left Secure Income REIT with surplus cash of £158m, which Prestbury believe should be retained “whilst the nature of Brexit is resolved and the management team continue their search to source value accretive deals”.
Prestbury therefore approached Secure Income REIT’s independent directors to propose cutting the management fee to the levels that would be payable if the cash were returned to shareholders. This is equivalent to £1.2m a year.
The directors have accepted the proposal and the reduction in the fee will take effect shortly.
Secure Income REIT chairman Martin Moore said: “The management team is the company’s second largest shareholder and so is exceptionally closely aligned with all shareholders. They consider that they should not benefit from temporarily acting as managers of the company’s unusually high cash balance.”