Inovalis Real Estate Investment Trust announces modifications to its management agreement

TORONTO, March 15, 2018

The Board of Trustees and the Manager agree that, given the REIT's relative size, it is in the REIT's best interest to not internalize the asset and property management function at this time. The management agreement (the "Agreement") maturing in April 2018 will be extended with the terms amended as outlined below.

• Term: The initial term will be for three (3) years, not to exceed April 1, 2021. The Agreement shall be automatically renewed for an additional two (2) years if the REIT's AFFO per unit for the year ended December 31, 2020 is greater than 115% of the AFFO per unit of the REIT as at December 31, 2017. The AFFO calculation shall be consistently applied and approved by the audit committee. Internalization can occur at any time at the discretion of the Board of Trustees.
  
  
• Asset Management Fees: Will be reduced from 0.75% to 0.50% and calculated based on the book value of assets. Fees will be payable in cash. Based on the REIT's cash resources and the projected AFFO the Board will propose to the unitholders whether the Asset Management fees should be paid fully or partially in  exchangeable securities, the exact composition of which will be determined by the Board annually. Any issuance of exchangeable securities shall be subject to TSX approval. If TSX approval is not obtained for the issuance of exchangeable securities, the Asset Management fees shall be payable in cash only.
  
  
• Acquisition Fees: 1.00% of the purchase price of properties acquired that are not currently owned or managed by the Manager and paid 100% in cash.

Reasons for Modifications to Agreement
The independent trustees considered a number of factors in recommending the modifications to the Agreement, including the key reasons set forth below:

• Reduces the G&A expense and is expected to be immediately accretive to the REIT's FFO per unit by $0.045 if the management fees are fully paid in cash. Should the fees be fully paid in exchangeable securities, it is expected to be  accretive to the REIT's AFFO per unit by $0.022
  
  
• Given the REIT's size, external asset management fees are less than what would be paid for an experienced, internalized management team;
  
  
• The Asset Manager has indicated, subject to TSX approval, its willingness to continue to be paid in exchangeable securities, creating greater alignment of interests between the REIT and the senior management team; and
  
  
• Results in the REIT continuing to benefit from the Manager's expertise, platform and industry relationships while operating under a more cost efficient structure.

Stéphane Amine, Chairman of Inovalis, commented: "Inovalis has generated a total return of ~47% since its IPO in April 2013, and we believe the modifications to the Agreement will continue to deliver unitholder value through immediate AFFO per unit accretion. A significant portion of the management fees, subject to TSX approval, are expected to continue to be paid in exchangeable securities, which demonstrates Inovalis S.A.'s continued alignment with the REIT. Inovalis REIT will continue to benefit from an experienced, local asset and property management team with significant expertise investing and managing office properties in the deepest real estate markets in Europe on secured high quality assets which are still offering gaps superior to 3% between the asset cap rate and cost of the senior loan."

About Inovalis Real Estate Investment Trust

Inovalis Real Estate Investment Trust is an unincorporated, open-ended real estate investment trust established pursuant to a declaration of trust under the laws of the Province of Ontario. The REIT has been created for the purpose of acquiring and owning office properties primarily located in France and Germany but also opportunistically in other European countries where assets meet the REIT's investment criteria.

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