Derwent London has confirmed it is planning to convert to tax-efficient real estate investment trust (REIT) status on July 1, 2007. The group will be required to pay a one-off charge calculated. Set at 2% of the group's gross qualifying assets, this comes to £46 mln (EUR 71 mln). Derwent London was formed by the merger of Derwent Valley Holdings with London Merchant Securities last February.
Derwent London has confirmed it is planning to convert to tax-efficient real estate investment trust (REIT) status on July 1, 2007. The group will be required to pay a one-off charge calculated. Set at 2% of the group's gross qualifying assets, this comes to £46 mln (EUR 71 mln). Derwent London was formed by the merger of Derwent Valley Holdings with London Merchant Securities last February.
The company, which will have £2.5 bn of assets after the merger, issued its 2006 final year report on Tuesday. Net asset value per share increased 33% to 1,770 pence in 2006. Total dividend rose 8% year-on-year from 13.65 pence to 14.75 p. Adjusted profit before tax decreased slightly from £16.7 mln to £16.4 mln year-on-year. 'The group is now the sixth largest UK listed property company, with a market capitalisation in excess of £2 bn,' said chairman Robert Rayne.
Derwent London said it has secured four new lettings covering a total 2,780 m2 of space in Midtown, one of its key central London villages. The lettings will generate annual income of £984,695, and will bring the 13,900 m2 Johnson office building and another 3,053 m2 office building in Midtown to a 100% occupancy rate.
Nine UK property companies became REITs in January this year and several more are expected to convert by the summer.
