bjt internalises management rights

BJT INTERNALISES TRUST MANAGEMENT RIGHTS AND ENTERS INTO ARRANGEMENTS WITH SENIOR MANAGEMENT
Babcock & Brown Japan Property Trust (ASX: BJT) (the “Trust” or “BJT”), which holds interests in ¥157.8 billion (c.A$2.3 billion) of property assets in Japan, today announced that agreement has been concluded with Babcock & Brown International Pty Ltd (BBIPL) for an internalisation of the management rights of the Trust held by Babcock & Brown Japan Property Management Limited (“BBJPML” or the “Responsible Entity”) and the acquisition of the asset management rights of the Trust held by Babcock & Brown Co., Ltd. (“BBCL” or the “Japan Manager”), both currently BBIPL subsidiaries. BJT will fully internalise BBJPML and will also, alongside Japan senior management of BBCL, take an economic interest in BBCL, which asset manages BJT’s property interests.
Key outcomes for BJT Unitholders:

Structure provides a clear path for separation from Babcock & Brown with immediate economic effect

Significant reductions in transaction and performance based fees

Existing management retained in both Australia and Japan
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Internalisation of Responsible Entity

BBJPML Board will comprise the current independent directors

Economic interest in Japan Manager

Priority right to participate in investments identified by Japan Manager

Japan Asset Management arrangements to be 10 + 5 + 5 years, with automatic extensions subject to performance thresholds

The Trust’s Chairman Mr Allan McDonald commented, “The Directors believe that the internalisation of the Responsible Entity, stabilisation of management platforms in both Australia and Japan, the new economic interest BJT will have in the activities of the Japan Manager and the improved fee arrangements will bring important benefits to BJT unitholders.”