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Slough Weighs Sale of $1.9B US Arm

LONDON-Slough Estates is reviewing its euro 1.5-billion ($1.9-billion) US business with an eye to selling it. The American assets would not benefit from tax free status when the company converts to a REIT next year.

By Anita Howarth | Updated on November 17, 2006

LONDON-Slough Estates has revealed that it is reviewing its euro 1.5-billion ($1.9-billion) US business with a view to possibly selling it. The London-based firm is seeking to refocus its business strategy ahead of converting to REIT status. In a statement, the company said it had begun a strategic review of its US wing, which provides offices for biotechnology groups in San Francisco and San Diego. The business currently generates euro 85 million ($109 million) in rent from 25 properties.

The statement added that the review could lead to an “immediate or phased” sale of the business. Or Slough might set up a joint venture or local merger with another US group. However, Slough cautioned there was “no certainty” that the review would result in a transaction.

The review was prompted by Slough’s decision to convert to REIT status, and the US business would not be tax-free within the new structure. Draft legislation means UK REITs would no longer pay corporate tax or capital-gains tax if the assets are in the UK.

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