UK property companies Brixton and Liberty International have separately announced amendments to their articles of association have been passed by extraordinary general meetings to allow them to convert to real estate investment trust status (REIT).
UK property companies Brixton and Liberty International have separately announced amendments to their articles of association have been passed by extraordinary general meetings to allow them to convert to real estate investment trust status (REIT).
Based on the market value of Brixton's property assets, it will pay a 2% entry tax charge of about £38.3 mln (EUR 57 mln) to the British exchequer to join the REIT system on January 1 2007. On conversion to a REIT, 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.
In addition the deferred tax liability on qualifying properties in the Brixton Group will be eliminated, which as of June 30, 2006 amounted to £166 mln, the company said in a statement. Brixton owns or manages around 5.4 million m2 of industrial and warehouse space in the UK.
Separately, Liberty International said a special resolution to amend the articles of association as part of the proposed conversion of the company to a REIT was passed unanimously by vote on a show of hands. Some 99.99% of the votes were cast, with 226,466,526 in favour of conversion and 14,799 against. Some 1,257,706 votes were withheld. As a result the company will become a REIT on January 1 2007. A major FTSE-100 ranking UK listed property business, Liberty International has property investments of over £7 bn.
Other UK property companies, including Land Securities and Slough Estates, have already begun the legal procedure to convert to REIT status next year.