Corporate real estate to benefit from stock alternatives

Thursday, March 25, 2010

Government intention to alter legislation of distributing profits to 'benefit corporate real estate ventures'

By Ashley Brunskill

Corporate real estate figures are learning that investment trusts will now be allowed to include stock dividends towards 90 per cent distribution requirements.

Chancellor Alistair Darling announced in yesterday's Budget (March 24th) that the government "intends" to include the measure in its next Finance Bill after the general election.

As a result, real estate investment trusts (Reits) can now offer stock dividends instead of cash when meeting statutory requirements to distribute 90 per cent of profits from Reits' property rental operations.

The British Property Federation's (BPF) chief executive Liz Peace hailed it as a victory when trusts' are financing and confidence is building in the sector as many brand corporate real estate firms look to invest.

She added: "Allowing Reits to have greater flexibility over how they manage their cash will benefit our economy as we begin to see improvements in occupier demand."

According to the BPF, amendments will leave industry firms better placed to grow out of the recession.

Source: ask-re The Property People LLP