UK Govt. Rules out Introduction of REITs in 2005

LONDON-The government has said it would not legislate for REITs in 2005, but will consult further. According to a statement by chancellor Gordon Brown, “The government continues to believe that tax reform in this area has the potential to improve the efficiency of the property market.”

Property companies are expected to be the main beneficiaries of Property Investment Trusts, the UK government’s name for REITs. The FTSE 350 real-estate index made early gains immediately after the announcement on Thursday.

The details outlined in the full pre-budget paper were seen by the property industry as a reassuring sign that the government is still interested in the concept of PIFs. “This shows they really are committed to this and are keen to engage with the industry,” says John Gellatly, Credit Suisse First Boston’s director of real-estate investment banking. “Anyone who had expected a detailed piece of legislation on this was fooling themselves.”