Rugby Estates is aiming to create the UK’s first start-up REIT next month
Rugby chairman David Tye and chief executive Andrew Wilson want to take advantage of a REIT legislation change announced by chancellor Gordon Brown in his pre-Budget report last December, which removed the rule that said a company must hold 75% of its assets in income-generating property to become a REIT.
Companies now have a year's grace before hitting this 75% ratio, which gives start-up companies the ability to float as REITs as ‘blind funds’. But the companies will then have to a pay a 2% ‘conversion charge’, as well as 4% stamp duty.
Rugby’s REIT will focus on mixed-use property in London and the south-east.
Rugby is also to launch a fund in the first half of this year called Future Land, aimed at parents and grandparents who wish to buy land as an investment for their children or grandchildren.