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Sirius Real Estate Ltd on Tuesday proposed converting its UK business into a real estate investment trust from the start of next month.
The operator of business parks, offices and industrial complexes, largely focused in Germany, said it will seek permission from shareholders at its July 29 annual general meeting.
The move follows its acquisition of flexible workspace provider BizSpace Group back in November. It represented a foray into an under-served new market in the UK, through the ownership of an established platform, the company said at the time.
Becoming a UK REIT means Sirius will no longer be subject to UK corporation tax on income or gains from its property rental business. It will, however, be forced to pay at least 90% of its UK property rental business income to shareholders yearly.
This will be done through property income distributions, which could come in the form of both cash or scrip dividends, the latter meaning additional shares instead of cash.
‘REIT conversion is not expected to affect the company's current dividend policy of paying out 65% of annual funds from operations and in addition to property income distributions, the company will continue to make distributions derived from its German operations,’ Sirius Real Estate added.
Shares in the company were 4.2% higher at 125.41 pence each in London on Tuesday morning. The stock was up 2.5% at R 24.60 each in Johannesburg.
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