IGD set to become first Italian SIIQ

Italian listed retail property company Immobiliare Grande Distribuzione (IGD) said it has decided to elect for the tax-efficient SIIQ status with retroactive effect to January 1, 2008. Opting for SIIQ status 'will result in the exemption of income from rental activities for the purposes of IRES (corporate income tax) and IRAP (regional business tax),' IGD said in a statement. The Italian company added that the charge for this special regime is estimated at approximately EUR 30 mln.

Following the conversion to a SIIQ, the company will change its name to IGD SIIQ (IGD Immobiliare Grande Distribuzione Società di investimento immobiliare quotata). 'The possibility to obtain the SIIQ status creates two different types of opportunities for IGD: on the one hand, the immediate tax benefit for group activities covered by the SIIQ regime; and on the other, the possibility to act as an incubator or aggregator going forward for businesses with real estate portfolios of limited size but who are interested in taking advantage of the SIIQ regime benefits though currently without the dimensions necessary for an IPO', said CEO Filippo Maria Carbonari.

IGD has a real estate portfolio with a market value of EUR 1bn consisting of 10 shopping malls, 14 hypermarkets and supermarkets and three development assets. The group also owns two shopping centres through its 50/50 joint venture with Beni Stabili, RGD. This month IGD announced the acquisition of a Romanian retail company, Winmarkt Magazine, in its first move outside its home country. In a statement, the Bologna-based retail firm said the deal is in line with its expansion plans in Europe recently announced in the 2008-2012 business plan. Winmarkt, owner of 15 shopping centres in Romania, was acquired for EUR 182 mln.

Italy introduced legislation at end-2006 facilitating the launch of REIT structures, known in Italy as SIIQs, but up to now only a few companies have shown interest in converting. IMMIT Immobili Italiani, the EUR 1.3 bn property unit of bank Intesa Sanpaolo, recently postponed plans to list as a SIIQ to May 2008, while Aedes Immobiliare said it plans to launch a EUR 1.2 bn SIIQ by the end of 2008.