Issue 1 – January 2008

REITs – Further Disappointment

Many had hoped that the original structure of REITs had been tightly drawn by the Government so that it could assess how the sector would use the advantages that it offered, with relaxation following in fairly swift order if no perceived abuses occurred.

It was with some disappointment, therefore, that we read in the pre-budget report that there are no current proposals either to soften the onerous stock exchange listing requirements for REIT companies or to extend the REIT regime to companies and funds investing in residential property portfolios.

Without these changes, it is difficult to see where the next surge of momentum for the REIT structure will come from in the foreseeable future, as there remain enough offshore structures that can provide similar tax advantages to satisfy the needs of sophisticated investors.

For further information contact susan.freeman@mishcon.com