Lend Lease is to create an offshore property unit trust for the bulk of its UK shopping centre interests in a bid to avoid stamp duty tax on partnerships.
Stamp duty will become payable on the trading of properties by partnerships next month.
Lend Lease has invited co-investors in the Lend Lease Retail Partnership and the Overgate Limited Partnership to transfer their interests to a new £850m Jersey property unit trust.
The £700m Lend Lease Retail Partnership owns a third of Bluewater and has a 100% interest in Solihull’s Touchwood shopping centre.
It has over 30 co-investors.
Lend Lease, Prudential and Hermes are direct owners of the other two-thirds of Bluewater.
The £150m Lend Lease Overgate LP, which has six co-investors, has a 100% interest in Lend Lease’s Overgate shopping centre in Dundee.
The bulk of the limited partners are understood to be in favour of taking their interests offshore.
The new structure, which would be more flexible than an LP, could also recruit new investors.
The proposal forms part of a trend by fund managers to switch to tax-efficient offshore vehicles.
ISIS Property Asset Management has been in talks with the Financial Services Authority about moving up to £2bn of property in its three Royal & SunAlliance with-profits funds offshore.
Henderson Global Investors is also seeking to reduce risk in its closed funds Pearl, NPI and London Life.
The company has been exploring the possibility of incorporating the retail warehouses from the funds’ combined £3bn property portfolio into a new offshore fund.
References: EGi News 17/05/04
