China property

Spring Reit to hold meeting in November on whether to remove asset manager

Private equity group PAG, which owns about 12.4 per cent stake, has proposed replacing the reit’s manager for failing to articulate a clear strategic plan

PUBLISHED : Tuesday, 24 October, 2017, 9:50pm
UPDATED : Tuesday, 24 October, 2017, 9:50pm

Spring Real Estate Investment Trust (reit) said it would hold an extraordinary meeting on November 10 to discuss a resolution proposed by alternative investment manager PAG to replace its asset manager, according to filings on the Hong Kong stock exchange on Tuesday evening.

PAG, which owns about 12.4 per cent stake in the reit, has proposed the replacement of Spring Asset Management with an internally employed team.

If the resolution is passed, the second resolution on the internalisation of the reit manager will proceed.

However, Spring Reit’s board of directors said on Tuesday that the resolution proposed by PAG to remove the manager is unjustified and cannot be substantiated. They recommend unit holders to vote against the resolution.

In August, PAG said the reit had underperformed because existing management had failed to articulate any clear strategic plan to address the ongoing material unit price and earnings underperformance.

PAG also questioned the manager’s recent move to buy a property in Britain when the trust’s core assets are two office towers at China Central Place in Beijing.