Sirius Real Estate to convert UK business to REIT
Sirius Real Estate Ltd NPV (Eur)
99.60p
16:29 23/12/19
Sirius Real Estate said on Tuesday that it will convert its UK business to a real estate investment trust from 1 April.
The owner and operator of branded business and industrial parks in Germany and the UK said the proposed conversion follows its acquisition of workspace brand BizSpace in November last year.
By entering the UK REIT regime, the company 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 (PIDs).
Certain classes of shareholder are eligible to receive gross PIDs however in general PIDs are paid to shareholders after the deduction of withholding tax at the basic rate of income tax. Shareholders not resident in the UK may be entitled to claim a full or partial refund from HMRC where a treaty dividend rate applies.
REIT conversion is not expected to affect the company's current dividend policy of paying out 65% of annual Funds From Operations (FFO) and in addition to PIDs, Sirius will continue to make distributions derived from its German operations.
Chief executive Andrew Coombs said: "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."