Shares in property companies rise as system of real estate investment trusts is introduced in UK

Land Securities and British Land officially became REITs this morning and saw their shares rise by around 1%.

Land Securities were up 0.9% to 2343 pence with rival British Land up 1.2% at 1735p as they joined many property companies switching into a real estate investment trusts.

The system was introduced in the UK on Monday and since then shares in other REITs Hammerson Plc and property investment group Great Portland Estates have risen 0.4% and 1.6% respectively.

Developer British Land will have the largest REIT portfolio. It means that it will become substantially free of UK taxes both on income and capital gains. The cost for conversion to the new system was over 拢300m for British Land.

Stephen Hester, chief executive at British Land, said: 鈥淭his is an important time for UK real estate. The benefits of REITs are immediate in terms of their boost to investors in the quoted property sector and those companies joining the regime.鈥�

Until today, quoted property companies have had to operate at a considerable disadvantage to other property investment vehicles. REITs redress the balance and should make the sector more attractive to investors, old and new.鈥�