Jonathan Russell
The London Stock Exchange is to relax listing requirements for new REITs by allowing them to float as investment companies rather than trading companies, as well as relaxing current rules on investment company listings.
The LSE is understood to be reacting to competition from alternative stock markets, such as the Channel Islands Stock Exchange, which are gearing up to attract listings of new REITs.
A market source said: “CISX has been aggressively campaigning to get REITs. The market has issues on liquidity, and it is currently cheaper and simpler for start-ups to list there than in London.”
Although the new rules will not come into force until the summer, the LSE and the UK Listing Authority said they would waive current rules in recognition of the changes about to be brought in. The other main change, listing as an investment company rather than a trading entity, means new REITs listing on the LSE will not need to have a three-year track record.
Paul Haddock, REITs product manager at the LSE, said: “The rules in London have been very prescriptive for investment entities, so they have gone to get their equity elsewhere. The new proposals will dramatically streamline listing rules.”
The fight for new business comes just days after the official launch of REITs. So far, nine companies have converted: British Land Brixton Great Portland Estates Hammerson Land Securities Liberty International Slough Estates Workspace and Primary Health Properties. Another raft of companies, including Big Yellow Group, is due to convert in the next few weeks. All companies are listed on the LSE.
At the launch on Thursday, BPF chief executive Liz Peace said: “We are delighted to have been a small part of the process of introducing UK REITs. Now it is up to the market and the companies to make it work.”
Peace: “Now it is up to the market and the companies to make REITs work”
new index gives investors insight
FTSE has launched an index to cover UK REITs listed on the LSE.
The FTSE EPRA/NAREIT UK REIT index will cover the nine companies to have converted so far, enabling investors to differentiate between REITs and other property companies listed on the market.
FTSE group chief executive Mark Makepeace said: “The launch of the FTSE EPRA/NAREIT UK REIT index ensures that we will continue to provide investors with the tools for diversification that real estate offers.”
