KPMG - IERE

decrease. In the near term, the Group expects professional fees to be higher as the Group continues
to acquire properties, and as a result of fees incurred in connection with the Offer.
Investment management fees
Investment management fees for the period ended 30 September 2006 were A1.5 million and include
investment management fees and disbursements incurred by the Investment Manager. Investment
management fees for this period were calculated at a rate of 0.25 per cent. of gross assets in
accordance with the investment management agreement then in effect. Investment management fees
are payable after the end of each financial quarter.
In future periods, investment management fees will be calculated in accordance with the Investment
Management Agreement between the Company and Invista REIM dated 17 November 2006, which
provides for a base management fee of 0.95 per cent. per annum of Adjusted Gross Assets, payable
monthly in arrear subject to a recalculation provision. Subject to the conditions set forth in the
current Investment Management Agreement, the Investment Manager will also be entitled to an
annual performance fee, from year one onward, of 15.0 per cent. of any aggregate total return over
and above a Performance Hurdle of 10 per cent. calculated on a three year rolling basis, as set out in
paragraph 8.2 in Part XII of this Prospectus. This performance fee is eligible to be paid in each of
the first two years on the to-date performance.
General and administration expenses
General and administration expenses for the period ended 30 September 2006 were A0.7 million.
General and administration expenses consist of A0.03 million in initial organisational expenses of the
Group (excluding professional fees), directors’ costs, payments to administrators and service providers
and rent on the Company’s offices in Luxembourg. The Company anticipates that general and
administration expenses will increase in future periods once it becomes a listed company and because
it has converted into a SICAF that is subject to regulation by the CSSF. This anticipated increase is
due to the requirements for a listed company and company supervised by the CSSF to have
additional service providers, such as a Custodian, Registrar and Transfer Agent, and listing and other
regulatory fees will be payable.
Goodwill impairment
Goodwill impairment for the period ended 30 September 2006 was A4.6 million. The goodwill
impairment charge arose from the acquisitions of two subsidiaries, Canal Business Park N.V. and
Solingen Logistik Zentrum GmbH, which had deferred tax liabilities when acquired in December
2005, and represents the writing off of goodwill arising from these acquisitions. The total cost of
these acquisitions was A13.5 million.
The Group may write off goodwill in future periods if its acquires subsidiaries that are transferred
with deferred tax liabilities.
Finance expenses
Finance expenses for the period ended 30 September 2006 were A11.3 million. Finance expenses were
comprised of A4.0 million in amortised finance costs, A5.3 million in debt and other interest expenses,
A2.0 million in commitment fees and other financing fees calculated using the effective interest rate
method and A0.02 million in net foreign exchange loss. The amount of gross interest expense is
primarily due to the extent of the Group’s borrowings and interest rates. Fees incurred in arranging
the Bank Facility are amortised over the life of the facility.
The Company intends to seek to re-finance or obtain alternative financing, including a securitised
loan facility, in the year following Admission. Finance expenses in future periods will be higher in
absolute terms due to increased borrowing to fund property acquisitions (including properties that the
Group has Committed to Acquire). Higher finance expenses may be offset in part by a lower interest
rate if the Company is able to obtain such rate under a re-financed or securitised credit facility.
Under the terms of the amended Bank Facility (conditional upon Admission) the Group would be
required to hedge at least 83.3 per cent. of the amount drawn under the Bank Facility. Finance
expenses may also fluctuate in future periods depending upon prevailing Eurozone interest rates,
which have risen from 2.25 per cent. in June 2005 to 3.25 per cent. in October 2006.
Finance income
Finance income for the period ended 30 September 2006 was A0.01 million. Finance income consists
of interest income from cash balances. The cash balance of the fund is expected to be materially
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