The directors of the Calan Healthcare Properties Trust have decided to keep the investment vehicle in a unit trust structure, rather than shift it to a company.

The board looked at the issue as part of a commitment given to unitholder that it would review governance options.

It says that “the best economic interests of unit holders will be met by the retention of the current structure.”

A study done by the board said that rather than changing structure, delivering on four key areas were what the market expected, namely:

• Improving the earnings, and therefore the distributions paid to unit holders. This should in turn improve unit price
• Growing the Trust through acquisitions that are earnings positive and have a strategic fit (not growth for growth’s sake)
• Ensuring alignment of the manager’s incentive and service fees with outcomes that are positive for unit holders
• Ensuring appropriate quality in the people that make up the board and management of the manager.

“It is the manager delivering on these four key areas that will lead to the enhancement of value for unit holders,” Calan said in a statement.

Calan says several alternative structures were reviewed including all those presently in use in the New Zealand market.

In New Zealand there are 10 listed property vehicles.

Of the 10, six are unit trusts and four are companies. Of the four companies, two are managed by an external manager and two by internalised management, therefore only two of the 10 have internalised management.

The range of fees paid by listed unit trusts to their managers varies considerably, with the base fee ranging from 0.50% to 0.85%. Calan’s base fee is 0.75%

Trustees Executors said the trust structure offers greater protection to unitholders than a company structure.