Property industry welcomes REITs
Posted: 23 Mar 2006 11:00:14 GMT
Real estate investment trusts (REITs) are set to hit the UK in January next year and it is a development that has been largely welcomed by those in the property industry.
The PEP and ISA Managers' Association (PIMA), for instance, has celebrated the fact that retail investors will soon have exposure to property as an investment class "without taking the risk of wholly owning".
"We welcome the Treasury's firm commitment to allow REITs to be included in ISAs. Allowing property as a qualifying investment will give investors a greater range of choice for their tax-incentivised savings," said Tony Vine-Lott, director general of PIMA.
The Association of Investment Trust Companies (AITC) has also welcomed the news, although it remains concerned that there is a risk of no new UK-REITs being launched.
Nonetheless, many are suggesting that both the commercial and residential property markets will benefit from the increased investment opportunities provided by REITs.
As has been suggested for some time, one of the key factors in the popularity of the trusts is inevitably the conversion charge and Gordon Brown's decision to set this at two per cent of gross assets has pleased observers.
It is thought it will encourage a huge number of companies to convert to REIT status next year and analysts are now eagerly awaiting further developments in the coming months.