Move will save Britain’s largest listed residential landlord an estimated £15m in tax in its first year and help it attract investment
Grainger has completed its conversion into a Real Estate Investment Trust (REIT).
The firm, Britain’s largest listed residential landlord, said the move will save it £15m in corporation tax in its first year and help it to attract investment from a larger pool of investors.
The landlord has over the past few years shifted towards the Build-to-Rent market, selling off equity release portfolios and its German rental business.
A REIT is a tax-efficient vehicle, under which a firm must derive at least 75% of its income from rental activities and distribute at least 90% of taxable profits as dividends.
The firm now describes itself as an 11,000-home “pure play” build-to-rent business with a pipeline of 4,500 homes.
It said it is “positioned for growth” and forecasts rental demand to grow by 20% by 2031.
Helen Gordon, chief executive of Grainger, said the move will attract more retail investors, adding some institutional investors only invest in REITs.
“The exciting thing is for retail investors – so people with their ISA – if they invest in Granger, our dividend comes through tax free,” she said.
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