UK Property Firms Join Hands To Herald New REITs Regime

by Robert Lee, Tax-News.com, London

31 August 2006

Traditional competitors in the UK's commercial property and financial services industries have joined forces to highlight the new tax-efficient way to invest in property in the UK.

Their aim is to increase awareness and understanding amongst financial advisers and private investors of the new Real Estate Investment Trusts (REITs) that the government is introducing from 1 January 2007, and also the wider world of quoted property investment.

To achieve their aim, a new internet portal and supporting publicity campaign, called Reita, have been created as an impartial source of expert information on quoted property investment, REITs and the funds that will invest in them.

So far 30 companies have joined The REITs and Quoted Property Group, the organisation behind the Reita campaign. They include eight of the biggest quoted property companies – some of which have announced that they intend to convert into REITs and others that are likely to maintain their current structure – nine of the leading fund managers, the London Stock Exchange, ten merchant banks and advisers, the British Property Federation and the Investment Property Forum.

Historically, most investment in quoted property companies has been institutional. The new REITs regime, by exempting eligible quoted property companies from corporation tax, will end the double taxation of the sector, making it attractive to a whole new world of investors who want to hold tax efficient indirect property investments in their portfolios. In addition to REITs, there are quoted property companies and other vehicles for indirect investment that private investors could consider.

The British Property Federation (BPF) is a founder member of The REITs and Quoted Property Group and played a key role in its establishment and in the creation of the Reita campaign. BPF Chief Executive, Liz Peace, comments:

“The long awaited arrival of UK REITs on New Year’s Day 2007 marks an important and exciting milestone in property investment in Britain. It opens up a host of opportunities for property companies, financial services providers, financial advisers and investors to significantly increase the level of investment in the commercial property sector. But while there is a clear appetite for property among private investors, there is little unbiased information publicly available on REITs and quoted property. We wanted to create something to fill this gap and we are confident that reita.org will be widely welcomed and used.”

Patrick Sumner, Chairman of The REITs and Quoted Property Group added:

“We are delighted to have received such tremendous support for the group, which now has the backing of so many senior organisations right across the industry. Our portal will be the UK’s first non-partisan resource for information on REITs and property investment, providing a definitive reference point, covering all the key issues and addressing any questions which the visitor has, whether they are a professional adviser, stockbroker or even a private investor."

“Our aim is to really add value to professional advisers’ business and ensure that reita.org can provide a one-stop resource for comprehensive, non-partisan and regularly updated information."

“The subject matter may appear complex to some, but our aim is to expand and educate a wider audience to the benefits of property investment. With such a great team behind us, we are extremely well placed to do this.”

David Shrimpton, Head of Product Management and Development at the London Stock Exchange, added that:

"We have had years of speculation about UK REITs. Now that they are about to become reality, I am sure that financial advisers and private investors will welcome a comprehensive and neutral source of information, backed by up-to-date financial information from the Exchange about the listed property market."

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