IERE.L Regulatory News (IERE)

Invista European Real Estate Trust SICAF

Notice of Extraordinary General Meeting

Recommended proposal for a change of the investment objective and policy of the Company

Further to its announcement on June 30th 2011, the Board of Directors, (the "Board") of Invista European Real Estate Trust SICAF (the "Company"), today announces the publication of its Circular regarding the proposed change of the investment objective and policy of the Company, the resignation of director, Duncan Owen, the appointment of the new manager, Internos, to implement the New Investment Objective and Policy and the notice of the Extraordinary General Meeting to be held on 14 October 2011 at 12 noon CET at the offices of Citco REIF Services (Luxembourg) S.A. at Carré Bonn, 20, Rue de la Poste, L-2346 Luxembourg. All defined terms within this announcement are used with the definition applied within the Circular.

1. INTRODUCTION

Your Board announced on 18 March 2011 that it had given notice to terminate the Company's investment management arrangements with Invista Real Estate Investment Management Limited ("IREIM"), with effect from no later than 18 September 2012, and that it was reviewing how the Company's assets could best be managed in the future.

Following consultation with Shareholders and the consideration of proposals from a wide range of prospective new investment managers and advisers, your Board announced on 30 June 2011 that it was proposing to change the investment objective and policy of the Company and appoint a new manager.

An extraordinary general meeting of the Company (the "EGM") is being convened at which the Ordinary Shareholders will be asked to consider the change of investment objective and policy of the Company (the "Proposal"). Shareholders are informed that, in respect of the Proposal, only Ordinary Shareholders will have the right to vote and Preference Shareholders will not have any voting rights.

The Proposal is conditional, amongst other things, upon the approval of the Ordinary Shareholders at the EGM. Approval of Ordinary Shareholders of the Proposal is a requirement under the Listing Rules. The purpose of the Circular is to provide details of the Proposal and seek the approval of the Ordinary Shareholders.

Your Board believes that the Proposal is in the best interests of the Company and its Shareholders as a whole and recommends that you vote in favour of the Resolution at the EGM.

2. THE PROPOSAL

2.1 Background to and Rationale for the Proposal

On 12 October 2010, Invista Real Estate Investment Management Holdings plc ("Invista") announced that it intended to realise the value of IREIM, its asset management subsidiary, which is the Company's existing manager.

The Company subsequently entered into negotiations to acquire, jointly with Invista Foundation Property Trust Limited and certain members of IREIM's management team, part of the business of IREIM from Invista. However, those discussions were ultimately terminated, and the Company gave notice to terminate the Existing Management Agreement with effect from no later than 18 September 2012.

Following consultation with Shareholders and the consideration of proposals from a wide range of prospective new investment managers and advisers, the Board concluded that, in light of the substantial discount to net asset value at which the shares of the Company were trading, a structured realisation strategy of the existing assets of the Company would be in the best interests of Shareholders. The Company has, subject to the satisfaction of the conditions set out in the Investment Advisory Agreement (which are repeated in Part 4 below and includes the Ordinary Shareholders approving the Proposal), appointed Internos to implement the New Investment Objective and Policy.

The Board believes that the proposed New Investment Objective and Policy is the most appropriate course of action for the Company at this time, and is expected to have the following benefits:

·; Shareholders should be able to obtain net realisable value (after repayment of borrowings and liabilities) in as short a timescale as practicable;

·; the proposed approach to realisation should achieve the best balance between maximising value (compared to an immediate liquidation) and minimising the time taken to return capital to Shareholders;

·; the implementation of the proposed New Investment Objective and Policy should allow the Company to take advantage opportunistically of buyers' immediate appetites for portfolio assets, at the same time as holding other assets over a longer timescale in order to maximise realisable value. Portfolio sales and corporate transactions, such as the merger or sale of the Company, will also be considered as a means of accelerating the delivery of value to Shareholders; and

·; the Company's listing and capacity to trade in the shares will be maintained for as long as practicable.

The Company is currently discussing with IREIM the possibility of entering into an agreement to terminate the Existing Management Agreement earlier than 18 September 2012.

2.2 New Investment Objective and Policy

Pursuant to the New Investment Objective and Policy, which is set out in full in Part 2 below, the property assets of the Company will be sold as expeditiously as is consistent with the protection of value of the properties in question. The initial focus will be on those properties already optimised for sale and those properties in markets where the Company has relatively few assets, in order to reduce property management costs.

The sales proceeds will be applied in the first instance to the repayment of the Company's existing debt, and thereafter returned to Shareholders in as cost efficient a manner as possible within a targeted timescale of approximately three years from the date of the Circular.

As the property assets of the Company are sold, the Board will use cash proceeds in excess of the amount that is required to repay allocated loan amounts and related financing costs either for further debt repayment or for return of capital to the Shareholders in accordance with its assessment at that time of what will deliver the best time and risk adjusted returns to Shareholders.

New property assets will not be acquired under the new strategy unless such an acquisition is deemed by the Board, in consultation with Internos, to be essential to protect or enhance the realisable value of an existing property asset. Where there is an opportunity to accelerate the realisation of optimal value for Shareholders, a corporate transaction, such as the merger or sale of the Company, will be considered.

Any previously published investment policy and/or restrictions in relation to the Company will be superseded by the New Investment Objective and Policy.

Risks associated with the change in investment objective and policy

In considering your decision in relation to the change in the investment objective and policy, you are referred to the risks set out in Part 3 below.

If you are in any doubt as to what action you should take, you are recommended to seek your own personal financial advice from your stockbroker, bank manager, solicitor, accountant or other independent financial adviser authorised under the Financial Services and Markets Act 2000 immediately. If you are in any doubt as to the taxation consequences for you of the Proposal, which will differ depending on your individual circumstances and on your jurisdiction of residence, you should consult your own professional adviser.

Approvals

In connection with effecting the New Investment Objective and Policy, the appointment of Internos is subject to the following approvals:

(i) the CSSF, as the Luxembourg regulator, having approved the appointment of Internos as the investment manager and promoter of the Company, either without conditions, or, if any conditions are attached to such approvals, with such conditions also having been satisfied;

(ii) the Bank of Scotland plc, having approved the appointment of Internos in its capacity as facility agent for the purposes of the common terms agreement originally dated 6 July 2005 (as amended and/or restated from time to time), relating to credit facilities provided in favour of the Company; and

(iii) the Ordinary Shareholders having approved the Proposal by passing the Resolution at the EGM.

CSSF approval of the change in investment policy

The New Investment Objective and Policy is subject to the approval of the CSSF, as the Luxembourg regulator, and it will therefore only become effective upon that approval being obtained.

Shareholder approval of the change in the investment policy

Under the Listing Rules the Company is required to seek the approval of Shareholders for any material change to its investment policy. Further details about the proposed change are set out in Part 2 of the Circular.

Transition Period

If the New Investment Objective and Policy is approved by the Ordinary Shareholders, the portfolio will be transitioned following the EGM once: (i) the other approvals referred to above have been provided; and (ii) all other conditions precedent in the Investment Advisory Agreement (as set out in Part 4 below) have been satisfied.

During the Transition Period, which is expected to end on any early termination of the Existing Management Agreement, but in any event, no later than 18 September 2012, Internos will conduct and conclude a full strategic and operational review of all aspects of the Company's property portfolio, banking facilities and administrative arrangements with a view to achieving additional cost reductions for the Company as well as preparing for the assumption of the role of investment adviser and manager. Internos commenced its review and preparations on 1 August 2011 and has continued this work since then.

2.3 Name of the Company

Under the terms of the Existing Management Agreement, the Company is required to ensure that its corporate and business names are promptly changed so as to remove all references to Invista in the event that the Company puts in place new management arrangements outside of the Invista Group. Following termination of the Existing Management Agreement, the Company and Invista are expected to agree that the Company will seek to change its name as soon as reasonably practicable, and in any event, no later than 31 March 2014 and the Company will communicate with Shareholders in due course in relation to such proposed name change.

2.4 Preference Shares

Subject to the actual time scale of achieving the contemplated disposal of portfolio assets in accordance with the New Investment Objective and Policy, the Company's issued Preference Shares may be redeemed within the Preference Shares' maximum 7-year term in accordance with the terms of the Prospectus.

2.5 Resignation of Director

Duncan Owen has informed the Board of his intention to resign as a Director of the Company, with effect from 30 September 2011.

3. EXTRAORDINARY GENERAL MEETING

Set out at the end of the Circular is a notice convening the EGM to be held at the office of Citco REIF Services (Luxembourg) S.A. at 20, Rue de la Poste, L-2346 Luxembourg at 12 noon CET on 14 October 2011.

At the EGM Ordinary Shareholders will be asked to vote in favour of the Resolution (which is set out in full in the Convening Notice at the end of the Circular) to change the investment objective and policy of the Company.

4. ACTION TO BE TAKEN

Ordinary Shareholders who hold their Shares directly and not through CREST on the Record Date ("Qualifying Shareholders") and who plan to attend the EGM, should complete the enclosed attendance form (specifying the number of Shares held) and date, sign and return a copy by fax and the original by mail before 6.00 p.m. CET on 12 October 2011 to Citco REIF Services (Luxembourg) S.A., 20, Rue de la Poste, L-2346 Luxembourg, fax number +352 47 24 73, for the attention of Ms. Marta Kozinska.

Qualifying Shareholders who will not be able to attend the EGM, should complete the enclosed Form of Proxy and date, sign and return a copy by fax and the original by mail before 6.00 p.m. CET on 12 October 2011 to Citco REIF Services (Luxembourg) S.A., 20, Rue de la Poste, L-2346 Luxembourg, fax number +352 47 24 73, for the attention of Ms. Marta Kozinska. Please note that any Forms of Proxy received after 6.00 p.m. CET on 12 October 2011 or incomplete Forms of Proxy will not be taken into account for the calculation of the vote at the EGM.

Capita IRG Trustees Limited, the Depositary for the purposes of dematerialised Depositary Interests that are held through CREST, will provide the holders of Depositary Interests on the Record Date ("Qualifying DI Holders") with voting direction forms ("Form of Direction") for completion and return. Qualifying DI Holders should therefore complete the enclosed relevant Forms of Direction and date, sign and return a copy by fax and the original by mail before 6.00 p.m. on 10 October 2011 CET to Capita Registrars, PXS, The Registry, 34 Beckenham Road, Kent BR3 4TU. Once Capita IRG Trustees Limited has collated responses from Qualifying DI Holders, it will lodge with Citco REIF Services (Luxembourg) S.A. a Form of Direction representing in aggregate the instructions of Qualifying DI Holders. Please note that any Forms of Direction received after 6.00 p.m. CET on 10 October 2011 or incomplete Forms of Direction will not be taken into account for the calculation of the vote at the EGM.

Only Qualifying Shareholders entitled to vote at 6.00 p.m. CET on the date which is two days prior to the EGM will be entitled to vote at the EGM (or any adjournment thereof). Only DI Holders entered on the register of DI Holders at 6.00 p.m. CET on 10 October 2011 shall be entitled to attend and vote at the EGM (or any adjournment thereof).

Changes to entries on the register of Shareholders (or, in respect of Depositary Interest(s), in the register of Depositary Interests held by Capita IRG Trustees Limited) after the above times shall be disregarded in determining the rights of persons to vote (and the number of votes they may cast) at the EGM.

Shareholders are reminded that:

·; Preference Shareholders will not be entitled to vote at the EGM; and

·; the Resolution on the approval of the Proposal by Ordinary Shareholders will be passed by a simple majority of the votes validly cast and no quorum requirement will apply.

5. RECOMMENDATION

Your Board considers the Proposal and the Resolution to be put forward at the EGM to be in the best interests of the Company and its Shareholders as a whole. Accordingly, your Board unanimously recommends that the Ordinary Shareholders vote in favour of the Resolution to be proposed at the EGM, as they intend to do in respect of their own beneficial holdings of Ordinary Shares which amount to, in aggregate, 332,225 Ordinary Shares (representing approximately 0.13 per cent. of the existing issued ordinary share capital of the Company as at 28 September 2011, the last practicable day prior to publication of the Circular).

Yours sincerely,

Tom ChandosChairman

PART 2

PROPOSED NEW INVESTMENT OBJECTIVE AND POLICY

The Board proposes to change the Company's investment objective and investment policy as follows:

"The Company's investment objective is to realise its existing portfolio of properties and to return capital to shareholders.

All property assets will be sold as expeditiously as is consistent with the protection of value, with an initial focus on those properties already optimised for sale and those in markets where the Company has relatively few assets, so as to reduce property management costs.

The sales proceeds will be applied in the first instance to the repayment of debt and thereafter returned to shareholders of the Company within a targeted timescale of approximately three years from the date of the circular to be issued by the Company to its Shareholders seeking approval of the new investment policy of the Company.

As the property assets of the Company are sold, the Board will use cash proceeds in excess of the amount that is required to repay allocated loan amounts and related financing costs either for further debt repayment or for return of capital to the Shareholders in accordance with its assessment at that time of what will deliver the best time and risk adjusted returns to Shareholders.

New property assets will not be acquired unless such an acquisition is deemed by the Board, in consultation with the investment adviser, to be essential to protect or enhance the realisable value of an existing property asset. Where there is an opportunity to accelerate the realisation of optimal value for shareholders of the Company, a corporate transaction, such as the merger or sale of the Company, will be considered."

The Board believes that asset allocation and risk diversification policies will be a product of the liquidity profile of the existing portfolio, and therefore the previous investment restrictions and limits applicable to the Company will, as from the date of approval of the Proposal at the EGM, be superseded by the New Investment Objective and Policy. The Company does not intend to actively increase its level of borrowing on a loan-to-value basis during the realisation period relative to that which follows from the repayment obligations under its existing credit facilities with Bank of Scotland plc.

PART 3

RISK FACTORS

Prior to voting on the Resolution, Ordinary Shareholders should consider the following risks in relation to the New Investment Objective and Policy:

·; The proposed change to the investment objective and policy will narrow the scope of the Company's investment objective and investment policy and could lead to reduced diversification of the Company's portfolio.

·; There is no certainty that the Company will be able to dispose of its assets within the targeted timescale, or at all. If disposals are made, there is no certainty of the values for those asset disposals.

·; Cash received by Shareholders during the implementation of the realisation strategy may be materially different from the current and/or future disclosed net asset value.

·; The discount to net asset value at which the Shares trade may not reduce and may increase.

·; Net asset value may decline in the period as investments are realised and prior to any distributions.

·; The costs of any individual asset realisation may be significant.

·; At a later stage during (or following) the forecast 3 year realisation period, if in the Board's opinion, continued trading of the Shares ceases to be viable (including, without limitation, where the net asset value of all Shares is less than the minimum size the Board considers viable for the ongoing operation of the Company), the listing of the Shares may be suspended and cancelled and Shares may no longer be traded. Where the Board applies for the listing of the Shares to be cancelled, approval of the Shareholders will be sought in compliance with the Listing Rules.

PART 4

ADDITIONAL INFORMATION

1. INTERNOS GROUP

Having considered proposals from a wide range of prospective managers and advisers, the Board has, subject to the satisfaction of the conditions precedent set out in the Investment Advisory Agreement (which are repeated at paragraph 3 below), appointed Internos to implement the New Investment Objective and Policy. The Internos Group is a real estate fund management specialist with a particular expertise in Continental Europe, and has significant experience of taking over portfolios and managing realisation strategies.

As described above, the Company is currently discussing with IREIM the possibility of entering into an agreement to terminate the Existing Management Agreement earlier than 18 September 2012.

2. INVESTMENT ADVISORY AGREEMENT

The terms of the Investment Advisory Agreement are substantially the same as the Existing Management Agreement, except for the fees payable by the Company.

Pursuant to the Investment Advisory Agreement, the Company will pay Internos the following fees:

Management Fee

A management fee of 1.25% per annum, payable on the net asset value attributable to the Shareholders, subject to a minimum of €1.0 million per annum. Assuming an unchanged level of NAV, this is currently expected to be approximately €1.6 million per annum lower than the management fee payable under the Existing Management Agreement, representing a reduction of 47%.

Realisation Fee

The Company is also expected to pay Internos a realisation fee equal to 12.5% of the amount by which cash returned to Ordinary Shareholders exceeds €82.8 million (being the average market capitalisation in June 2011 converted at the £/€ exchange rate at the close of business on 29 June 2011), compounded thereafter at 10% per annum.

In the event that an offer to purchase the Company is declared unconditional in all respects and has been accepted by at least 50% of Shareholders, the offer will be defined as a distribution to Shareholders for the purposes of the Investment Advisory Agreement. To the extent the consideration offered pursuant to the offer is non-cash consideration and in accordance with the terms of the offer such non-cash consideration is calculated as being of such amount as would entitle Internos to a realisation fee:

(i) the Company is entitled to settle or direct settlement of the realisation fee payable in connection with the offer in the same non-cash consideration up to the same proportion that such non-cash consideration constitutes consideration for the offer; and

(ii) such non-cash consideration element of the realisation fee will be subject to a lock up period of 3 months from the date of completion of the takeover.

Transition Fee

Between 1 August 2011 and the date on which Internos assumes responsibility for the day-to-day management of the Company from IREIM, the Company will pay Internos a fee of €75,000 per month to conduct a full strategic and operational review of all aspects of the Company's property portfolio, banking facilities and administrative arrangements with a view to achieving additional cost reductions for the Company.

Termination

The Investment Advisory Agreement (including the transitional arrangements thereunder), may be terminated by either the Company or Internos on 6 months written notice. The Investment Advisory Agreement may also be terminated immediately by the Company in certain circumstances, such as in the case of the departure of certain key persons of Internos or for regulatory reasons.

3. CONDITIONS PRECEDENT

The appointment of Internos pursuant to the Investment Advisory Agreement is conditional on the following:

(i) the CSSF, as the Luxembourg regulator, approving the appointment of Internos as the investment manager and promoter of the Company either without conditions, or, if any conditions are attached to such approvals, with such conditions also having been satisfied;

(ii) the Bank of Scotland plc, approving the appointment of Internos in its capacity as facility agent for the purposes of the common terms agreement originally dated 6 July 2005 (as amended and/or restated from time to time), relating to credit facilities provided in favour of the Company;

(iii) the Ordinary Shareholders approving the Proposal by passing the Resolution at the EGM;

(iv) the Company and IREIM entering into a termination agreement in relation to the Existing Management Agreement which includes certain terms that are acceptable to Internos; and

(v) the Company and each of its subsidiaries that hold French property assets appointing a French investment adviser that has the necessary licence under to the Loi Hoguet Rules (to the extent that the Loi Hoguet Rules apply).

4. PUBLICATION OF EGM CIRCULAR

The Company announces that Extraordinary General Meeting will be held on 14 October 2011 at 12 noon CET at the offices of Citco REIF Services (Luxembourg) S.A. at Carré Bonn, 20, Rue de la Poste, L-2346 Luxembourg.

In connection with this, the following documents have been posted to shareholders today: (i) notice of EGM, (ii) Form of Proxy, (iii) Attendance Form and (iv) Form of Direction.

A copy of the EGM Circular has been submitted to the National Storage Mechanism and will shortly be available for inspection at: www.Hemscott.com/nsm.do.

5. EXPECTED TIMETABLE OF PRINCIPAL EVENTS

INVISTA EUROPEAN REAL ESTATE TRUST SICAF

(a company organised under the laws of the Grand Duchy of Luxembourg as a société d'investissement à capital fixe ("SICAF") under the form of a société anonyme ("SA") with registered number B108.461)

NOTICE OF EXTRAORDINARY GENERAL MEETING

Luxembourg, 29 September 2011

We have pleasure in inviting you to attend the extraordinary general meeting of the shareholders (the "Extraordinary General Meeting") of Invista European Real Estate Trust SICAF, a société d'investissement à capital fixe organised under the form of a société anonyme (public limited liability company) with registered office at 25C, Boulevard Royal, L-2449 Luxembourg and registered with the Luxembourg trade and companies register under number B108.461 (the "Company") which will be held on 14 October 2011 at 12 noon CET at the office of Citco REIF Services (Luxembourg) S.A.: 20, Rue de la Poste, L-2346 Luxembourg to consider and pass the following resolution on the following agenda:

FIRST RESOLUTION

Item 1. THAT the investment objective and investment policy set out on page 9 the Company's circular to Shareholders dated 29 September 2011 (the "New Investment Objective and Policy"), a copy of which is initialled for the purpose of identification by the Chairman of the Meeting and produced to the Meeting, be and are hereby approved and adopted with effect from 14 October 2011 (or if later, the date of receipt of any required approval of the New Investment Objective and Policy by the Commission de Surveillance du Secteur Financier) as the Company's investment objective and policy in place of the Company's existing investment objective and policy and that the previous investment restrictions and limits applicable to the Company will be superseded by the New Investment Objective and Policy.

.

Dated: 29 September 2011

Registered Office:25C Boulevard Royal L-2449 Luxembourg

By order of the Board Invista European Real Estate Trust SICAFCompany Secretary

NOTES

(a) Shareholders that hold their Shares directly and not through CREST on the Record Date (as defined above) ("Qualifying Shareholders") who plan to attend the Extraordinary General Meeting referred to above, should complete the enclosed attendance form and date, sign and return a copy by fax and the original by mail before 6.00 p.m. CET on 12 October 2011 to Citco REIF Services (Luxembourg) S.A., 20, Rue de la Poste, L-2346 Luxembourg, fax number +352 47 24 73 for the attention of Ms. Marta Kozinska.

(b) Qualifying Shareholders who will not be able to attend the Extraordinary General Meeting, may complete the enclosed form of proxy (the "Form of Proxy") and date, sign and return a copy by fax and the original by mail before 6.00 p.m. CET on 12 October 2011 to Citco REIF Services (Luxembourg) S.A., 20, Rue de la Poste, L-2346 Luxembourg, fax number +352 47 24 73 the attention of Ms. Marta Kozinska.

Please note that any Forms of Proxy received after 6 p.m. CET on 12 October 2011 or incomplete Forms of Proxy will not be taken into account for the calculation of the vote in respect of the Extraordinary General Meeting.

(c) Holders of the dematerialised depositary interests in respect of shares of the Company issued and to be issued (the "Depositary Interests") by Capita IRG Trustees Limited, (the "Depositary") ("DI Holders") should therefore complete the enclosed relevant voting direction forms (the "Form of Direction") and date, sign and deposit the Form of Direction by mail before 6.00 p.m. CET on 10 October 2011 to Capita Registrars, PXS, The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU. Once the Depositary has collated responses from DI Holders, it will lodge with Citco REIF Services (Luxembourg) S.A. a Form of Proxy representing in aggregate the instructions of DI Holders.

Please note that any Forms of Direction received after 6.00 p.m. CET on 10 October 2011 or incomplete Forms of Direction will not be taken into account for the calculation of the vote in respect of the Extraordinary General Meeting.

(d) Only Qualifying Shareholders entitled to vote at 6.00 p.m. CET on the date which is two days prior to the Extraordinary General Meeting will be entitled to vote at the EGM (or any adjournment thereof). Only DI Holders entered on the register of DI Holders at 6.00 p.m. CET on 10 October 2011 shall be entitled to attend and vote at the Extraordinary General Meeting (or any adjournment thereof).

Changes to entries on the register of Shareholders (or, in respect of Depositary Interest(s), in the register of Depositary Interests held by the Depositary) after the above times shall be disregarded in determining the rights of persons to vote (and the number of votes they may cast) at the Extraordinary General Meeting.

(e) Shareholders are reminded that: (i) Preference Shareholders will not be entitled to vote at the Extraordinary General Meeting and (ii) the Resolution on the approval of the Proposal by Ordinary Shareholders will be passed by a simple majority of the votes validly cast and no quorum requirement will apply.