UK-based Big Yellow Group said that a disagreement with UK tax officials may derail its plan to convert to a REIT. The officials object to the change in tax treatment of the company's rental income. Big Yellow will hold further talks with the tax authorities and aims to proceed with its plan, researchers at merchant bank Kempen & Co said.
UK-based Big Yellow Group said that a disagreement with UK tax officials may derail its plan to convert to a REIT. The officials object to the change in tax treatment of the company's rental income. Big Yellow will hold further talks with the tax authorities and aims to proceed with its plan, researchers at merchant bank Kempen & Co said.
The company said in a statement that 'conversion to REIT status should be ultimately successful, although not guaranteed'.
Nine existing property companies converted into REIT status since real estate investment trusts were introduced in the UK on January 1, 2007. A further seven quoted property companies are preparing to convert to REIT status, most of them in the first half of 2007.
REITs campaign group Reita lists 26 property companies it deems unlikely to convert to the REIT regime, including Countrywide, Savills, Cardiff Property and Development Securities. The UK is the 19th country to introduce REITs, which have seen long-term success in the US, Australia, Japan, Netherlands, Belgium and France.