Innes England and IPF examine Real Estate Investment Trusts
MORE than 60 people from across the East Midlands business community attended an event which put Real Estate Investment Trusts (REITs) under the microscope at Nottingham Trent University.
The Investment Property Forum (IPF) event, which was sponsored by commercial property agency Innes England and Nottingham Trent University, took place at the Nottingham Conference Centre and was chaired by Matthew Hannah, director at the firm and board member of the IPF.
Richard Shepherd-Cross from Custodian Capital and David Wooldridge of A & J Mucklow Group Ltd as well as Keith Lown from the real estate department at Nottingham Trent University addressed delegates.
Custodian Capital is a £189m REIT, with around 15 per cent of its property portfolio located in the East Midlands and, during the event, Richard discussed the benefits of the business structure.
He said: “We have improved the outcome for our clients in terms of liquidity – access to funds is much easier, we are transparent and there is a stability of income.
“From a business point of view, converting to a REIT has been extremely beneficial as well. For example, we have doubled the size of our portfolio in ten months and have simplified our proposition. We have also added more than 70 clients to our shareholder base.”
David Wooldridge is finance director at A&J Mucklow – a Midlands based property company. It converted to a REIT in 2007, which has seen the business grow.
He said: “We have undoubtedly increased the quality of our property portfolio since 2007 through a programme of acquisition of investment properties and development of new buildings/acquisition of new units as well as development of our existing stock. Our focus is on the Midlands as we look to further improve our portfolio.
“There is now an increased knowledge about REITs and HMRC is very supportive. We do consider the structure of deals in more detail now, but the business model makes a great deal of sense to us.”
Matthew Hannah, director at Innes England, said: “The use of REITs is important for the regional property market, where there are higher income yields to be delivered than the South East and London, where the weight of capital has forced yields down.
REITs distribute 90 per cent of their net income and private investors and income funds are attracted to that distribution which can show a c.six per cent return every year.
Matthew Hannah was appointed to the Midlands board of the IPF in 2014.