Sirius Real Estate to Convert UK Business to Real Estate Investment Trust

By Joe Hoppe

Sirius Real Estate Ltd. said Tuesday that it intends to convert its UK business to a real-estate investment trust, or REIT, from April 1.

The owner and operator of branded business and industrial parks in Germany and the UK said the decision follows its acquisition of BizSpace Group in November for a cash consideration of 245 million pounds ($322.6 million).

By entering the 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 through property income distributions .

The returns can be paid through cash or scrip dividends.

The company said it doesn’t expect the conversion to affect its current dividend policy of paying out 65% of annual funds from operations, and in addition to property income distribution it will continue to make shareholder payments from its German operations.

Shares at 0909 GMT were up 5.8 pence, or 4.8% at 126.2 pence.

Write to Joe Hoppe at [email protected]