ANZO investors approve new management fee, conversion to company

October 21, 2010

AMP NZ Office Trust (ANZO) will proceed with significant changes to its corporate structure, governance and management fee following approval by investors at a meeting in Auckland today.

ANZO unit-holders met today [Thursday 21 October 2010] at Auckland’s Langham Hotel and voted in favour of two separate proposals:

• ·A new management fee structure, with a tiered base asset management fee and a performance fee based on relative outperformance over other NZX-listed property vehicles, and
• The conversion of ANZO from a unit trust into a company, which will be externally managed under a new management agreement, under the supervision and strategic direction of a new board of directors of the company. The new board will include a majority of directors who are independent of the manager.

The extraordinary resolutions received 81-83 percent support, and all other resolutions received 71-83 percent support.

Mr Stobo said the changes are intended to result in greater transparency, control and accountability for investors, as well as stronger incentives for ANZO’s manager to consistently act in their best interests. The board was delighted to see the changes approved following a year’s work.

No action is required on the part of unit-holders. Some of the immediate and most visible changes will include:

• The redemption of existing units in ANZO and issue of shares in a new limited liability company, AMP NZ Office Limited. This will involve the suspension of trading  in ANZO units on the New Zealand Stock Exchange from 26 October 2010, with shares in the new company to be issued and traded from 1 November 2010. Investors will be referred to as shareholders, rather than unit holders, and will receive dividends rather than distributions

• After the corporatisation process has taken place, Mr Stobo and Graeme Horsley will be joined as independent directors on the board of the new company by highly-experienced directors Don Huse and Graeme Wong. One of the first tasks of the new board will be to carry out a review of ANZO’s distribution policy, including the utilisation of the distribution reserve account after 1 November 2010

• The underlying business of ANZO remains unchanged and the new company vehicle will have the same assets and the same term liabilities and will also be a Portfolio Investment Entity (PIE)

• ANZO’s existing banking facilities will be extended to the new company

• Earlier this week ANZO Mr Stobo said that, following discussion with institutional investors, the manager had agreed in principle to a further reduction in its management fee entitlement, should the conversion of ANZO to a company go ahead, and this amendment will also be put into effect.
  
  The new base management fee structure will become 0.55 percent of the value of investment properties up to $1 billion, 0.45 percent of that value between $1 billion and $1.5 billion, and 0.35 percent of that value to the extent it exceeds $1.5 billion. The amendment does not affect the performance fee component of the manager’s fee entitlement or the manager’s entitlements to fees for additional services, which will remain as outlined in the Information Pack sent to investors on 5 October.
  
  Once detailed wording of the amendment has been finalised, it will require either approval by ordinary resolution of ANZO investors at a further meeting under the “related party transaction” provisions of the NZX listing rules, or alternatively a waiver (or ruling) from NZX to the effect that no such approval is required. The manager intends to arrange for approval as soon as possible, with any investor meeting likely to be held early next year if required.

Mr Stobo added that ANZO will make announcements to the NZSX as the major steps are completed, and investors will also receive communications from both ANZO and its unit/share registrar throughout the process.

“The new board and new executive team will now be required to perform for investors under this new regime.”

About ANZO
ANZO is New Zealand’s largest listed investor in prime and A-grade commercial office property. A unit trust listed on the New Zealand Exchange, ANZO currently owns 15 New Zealand office buildings – Auckland’s PricewaterhouseCoopers Tower, ANZ Centre, 151 Queen Street, AMP Centre and 21 Queen Street; and Wellington’s State Insurance Tower, Vodafone on the Quay, HP Tower, 125 The Terrace, No. 1 and 3 The Terrace, Pastoral House, Mayfair House, AXA Centre, Deloitte House and 29 Willis Street (Chews Lane).