REAL ESTATE - Workspace, the small business landlord 3.7%-owned by Dutch civil service pension fund ABP, has told investors it would convert to a real estate investment trust (REIT) when new legislation comes in next January.
Under the REIT regime the company, which owns IPE Real Estate’s London offices, will be exempt from corporation tax on rental income and on sales of property assets.
A spokesman for the firm said it was in favour of conversion to a REIT “in principle” – despite a conversion charge payable at 2% of the sum of its assets. “It would be foolhardy to decide without having seen the detail, but the decision to go ahead is positive,” he said.
The decision came as the group announced that it had appointed Rupert Dickinson, CEO of residential property specialist Grainger, as a non-executive director.
Dickinson’s appointment reflects the company’s increasing interest in mixed-use properties, specifically within regeneration projects. Workspace recently acquired real estate on an East London site likely to be boosted by the nearby Olympics in 2012. It said it was scouting further, similar acquisitions.
Workspace follows Land Securities, the UK’s largest property firm, which in July said that conversion to a REIT – despite a conversion charge of £270m – could save the group £75m in tax annually.