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Two British Companies Convert to REITs

LONDON-British Land and Land Securities became eligible to convert to REIT status on Jan. 1 after a change in government legislation.

By Brian K. Miller | Updated on January 02, 2007

LONDON-Two of Britain’s largest listed property companies, British Land and Land Securities, have formally made the shift to REIT status. British Land says it will pay a one-time conversion charge of approximately 300 million pounds ($US 592 million) later this year and Land Securities says it expects to pay a similar amount.

British property companies became eligible to convert to REIT status on Jan. 1 after a change in government legislation and have done so or declared their intention to do so, including Slough Estates and Liberty International. The conversion makes the companies substantially free of UK taxes on both income and capital gains.

“The benefits of REITs are immediate in terms of their boost to investors in the quoted property sector and those companies joining the regime,” says British Land CEO Stephen Hester. “Until today, quoted property companies have had to operate at a considerable disadvantage to other property investment vehicles. REITs redress the balance and should make the sector more attractive to investors, old and new.”

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