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TORONTO, March 31, 2021 /CNW/ - Canadian Apartment Properties Real Estate Investment Trust (TSX: CAR.UN) ("CAPREIT") announced today that IRES Fund Management Limited (the "Investment Manager"), a wholly-owned subsidiary of CAPREIT, today provided twelve (12) months' notice of termination of its management agreement (the "Management Agreement") with Irish Residential Properties REIT plc ("IRES REIT"), which will become effective March 31, 2022.
Pursuant to the Management Agreement, the Investment Manager provides asset and property management services to IRES REIT. CAPREIT Limited Partnership ("CAPLP"), a wholly owned subsidiary of CAPREIT, also provides services to the Investment Manager and IRES REIT through a related services agreement (the "Services Agreement").
The Management Agreement had an initial term of 5 years, which expired on 1 November 2020, and the Management Agreement then rolled over for a further 5-year term unless duly terminated by either party at an earlier date. As previously disclosed by IRES REIT, the Investment Manager has the right to terminate the Management Agreement on twelve (12) months' notice, and IRES REIT has the right to terminate the Management Agreement in the event that it determines that it is in IRES REIT's best interests to internalize its management, in which event it may purchase the Investment Manager on a liability free (other than liabilities in the ordinary course of business) / cash free basis for €1 ("Internalisation Termination").
The Investment Manager has issued its 12-month notice of termination under the Management Agreement. The Services Agreement will terminate automatically upon termination of the Management Agreement.
The Investment Manager and CAPLP, in accordance with the terms of the Management Agreement and the Services Agreement, respectively, will assist in the orderly transition of management services to IRES REIT or another investment manager designated by IRES REIT. Notwithstanding the service of notice of termination of the Management Agreement by the Investment Manager, IRES REIT retains its right to serve its own notice of termination of the Management Agreement pursuant to an Internalisation Termination and to purchase the Investment Manager for €1. Both the Investment Manager and CAPREIT continue to work constructively and cooperatively with IRES REIT to enable IRES REIT to assess whether it is in its best interest to internalize management which may still become effective prior to the expiry of the 12-month termination notice period, or replace the Investment Manager with a third party.
Through its Irish subsidiary, CAPREIT continues to hold 18.8% in the share capital of IRES REIT.
CAPREIT is Canada's largest publicly traded provider of quality rental housing. CAPREIT currently owns or has interests in, and manages, approximately 67,600 residential apartment suites, townhomes and manufactured housing community sites well-located across Canada, in the Netherlands and Ireland. For more information about CAPREIT, its business and its investment highlights, please visit our website at www.caprent.com or www.capreit.net and our public disclosure which can be found under our profile at www.sedar.com.
CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING STATEMENTS
All statements in this press release that do not relate to historical facts constitute forward-looking statements. These statements represent CAPREIT's intentions, plans, expectations and beliefs and are subject to certain risks and uncertainties, CAPREIT's investment intentions regarding its beneficial interest in IRES REIT share capital, the orderly transition of management services to IRES REIT or another investment manager and the potential acceleration of the twelve-month notice period, that could result in actual results differing materially from these forward-looking statements. These risks and uncertainties are more fully described in regulatory filings, including CAPREIT's Annual Information Form, which can be obtained on SEDAR at www.sedar.com, under CAPREIT's profile, as well as under Risks and Uncertainties section of the MD&A released on February 24, 2021. The information in this press release is based on information available to management as of March 31, 2021. Subject to applicable law, CAPREIT does not undertake any obligation to publicly update or revise any forward-looking information.
SOURCE Canadian Apartment Properties Real Estate Investment Trust (CAPREIT)
View original content: http://www.newswire.ca/en/releases/archive/March2021/31/c9425.html