Leeds-based investment and development company Town Centre Securities announced plans to convert to a REIT this morning.
In a statement to the Stock Exchange as part of the company’s end-of-year results, chairman and chief executive Edward Ziff said that the company would convert in October, and that the conversion would wipe out £66m in Capital Gains Tax liability.
Ziff reiterated his view made last year that the property market is due a correction, and that this has been exacerbated by the summer turmoil in the financial markets.
‘I reported last year concern that the price of property was being pushed too high. Recent interest rate increases have taken the heat out of the investment market and there has been a marked slow down in transaction activity over the last two months.
‘I do not believe that the property market has remained unscathed in the face of the global credit issues and financial uncertainties. As we move into the autumn we will see that property values have fallen. If there is a more realistic attitude towards property values from the investment market we will actively seek to add to our portfolio.’
Ziff was speaking as the company posted poor end-of-year results for the period to 30 June, with net asset value falling 7% to 451p a share.