Real Estate Capital UK commentary
The UK Budget was surprisingly favourable to REITs. The government is to consult on abolishing the conversion charge for entry to the regime; introducing a ‘diverse ownership’ rule for institutional investors, to allow REITs backed by seed investors whose interests would dilute over time; and the disaggregation of stamp duty on residential portfolios, which may help create the first resi REITs.
It has also been a busy few weeks for the smaller REITs and property companies. Hansteen announced a £150m equity raising through a placing and open offer at 81p a share, to buy more distressed property. Joint chief executive Morgan Jones said the industrial REIT’s previous deals, including buying 61 assets from the receiver to Kilmartin and GPT Halverton’s assets in Germany, would have been “impossible had we not had access to our own capital”.
Primary Health Properties raised a further £16m through a placing at a 5.3% discount to the 11 April share price. Wichford, another small cap firm, is in merger talks with London AIM-listed South African group Redefine International.