Sirius Real Estate, a major owner and operator of branded business and industrial parks in Germany and the UK, announced on Tuesday that it intends to convert its UK business to the tax-efficient UK Real Estate Investment Trust (REIT) regime from 1 April 2022.
The proposed REIT conversion follows the company’s UK acquisition of BizSpace in November 2021. By entering the UK REIT regime, Sirius will no longer be subject to UK corporation tax on income or gains from its property rental business and will be required to pay 90% or more of its UK property rental business income to shareholders annually, as property income distributions, which can be satisfied by both cash and SCRIP dividends.
REIT conversion is not expected to affect the Company’s current dividend policy of paying out 65% of annual Funds From Operations (FFO).
At the company’s next Annual General Meeting (AGM), scheduled for 29 July 2022, Sirius will seek shareholders approval for the insertion of new clauses to its Articles of Incorporation in line with UK REIT requirements.
Andrew Coombs, Chief Executive of Sirius Real Estate, commented: ‘The proposed conversion to a UK REIT is a natural progression following the Company’s transformational acquisition of BizSpace in the UK last year, and provides greater comparability to other UK REITs in terms of our FFO and dividend yields for investment purposes.’
