A proposed shake-up of the REIT rules does not go far enough to attract institutional investors into housing, the Property Industry Alliance has warned.
Following the end of the consultation period on the draft Finance Bill 2012 on Sunday, 12 February, the cross-industry group urged the government to drop the proposed requirement for REIT shares to be traded in every accounting period.
It said this would hamper start-up firms, which have been identified as the main beneficiaries of the new REIT proposals.
It also called for ownership rules to be relaxed further. As it stands, a REIT may not be controlled by five or fewer shareholders – a rule that does not recognise the diverse ownership of pension and life funds. A new definition of institutional investors broadens this, but, says the PIA, still excludes several types of diversely owned institutions, such as housing associations.
It said this would be “to the detriment of the attractiveness of the REIT regime”.
bridget.oconnell@estatesgazette.com
