REAL ESTATE - Land Securities has confirmed that it is to convert into a Real Estate Investment Trust on January 1 next year following its Extraordinary General Meeting.
It said 99.1% of shareholders backed the decision. The conversion will result in a £300m charge to the government - 2% of its assets. So it will carry out a valuation of the relevant assets as at 31 December 2006.
This will be a one-off exercise and will include an external valuation of both the qualifying properties held in the investment property business together with the qualifying properties held by Land Securities Trillium, representing the first valuation of these assets since Trillium was acquired in 2000. It is anticipated that the results of the valuation will be announced to shareholders in February 2007.
Chief executive Francis Salway said: "We are confident that our conversion to REIT status will bring benefits to shareholders in terms of the Group's tax efficiency and are excited to be one of the first companies to take advantage of the new legislation. We look forward to the increased dynamism this change will bring to the sector."
Earlier, Brixton Plc had said it would also convert into a REIT as of the start of next year.
It said: "On entering the REIT regime, UK resident members of the Brixton Group (which comprise approximately 94% by value of Brixton's asset portfolio), will no longer pay UK direct tax on the profits and gains from their qualifying property rental businesses."