F&C will retain the £617m Commercial Property trust (FCPT) mandate following a failed takeover bid by Ignis-managed UK Commercial Property trust.
After a rejection of the merger by independent shareholders last month, the board of FCPT served notice on its management agreement with F&C Reit.
However, following a review on the future of FCPT, it has decided to retain F&C Reit as manager.
Under the new agreement, annual management fees, including performance fees, will be capped at 0.6% of average total assets, reduced from 1%.
The base management fee has been reduced from 0.6% of the gross value invested down to 0.5% of net assets per annum, and 0.25% on cash net of gearing in excess of 5% of net assets.
The changes come into force on 1 October 2010.
John Stephen, chairman of FCPT, says: "The directors are delighted to have agreed new management terms with F&C Reit which will result in reduced expenses and secure continuity of portfolio management under F&C Reit and Richard Kirby.
"With a top quartile performance track record and a well diversified and prime property portfolio, we believe FCPT has a strong future as an independent company and we look forward to delivering value for all our shareholders."
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