Big Yellow, a leading UK self-storage company, is set to join the ranks of British real estate investment trusts (REITs), as the group's disagreement with the country's tax officials has been solved and HM Revenue & Customs has withdrawn its objection to the change in tax treatment of Big Yellow's rental income.
Big Yellow, a leading UK self-storage company, is set to join the ranks of British real estate investment trusts (REITs), as the group's disagreement with the country's tax officials has been solved and HM Revenue & Customs has withdrawn its objection to the change in tax treatment of Big Yellow's rental income.
The company said it would convert to REIT status, backdated to January15, 2007. It is to carry out a valuation of its qualifying property assets to establish the exact value of the 2% conversion charge it will have to pay. Ceo Jimmy Gibson said: 'We believe that becoming a REIT will be of significant benefit to shareholders, creating an enhanced level of future dividends in a more tax-efficient and transparent structure. In addition, we believe that the self-storage industry as a whole will benefit from the creation of a growing specialist REIT sector, with improved access to capital, driving further development of this relatively young market.'
Big Yellow's success may pave the way to a possible conversion to REIT status by rival Safestore, the largest self-storage operator in the UK. Safestore, which recently raised £209 mln (EUR 307 mln) through an initial public offer on the London Stock Exchange, was reportedly considering to become a tax-efficient REIT after the flotation.
