Nabarro advises Rugby Estates on creation of Exit REIT

Media > Press releases > Nabarro advises Rugby Estates on creation of Exit REIT

22 May 2007

Law firm Nabarro has advised Rugby Estates Investment Trust on the first fund specifically designed to create a new portfolio and take advantage of the Reit regime. The Exit REIT has raised £47.4 million for this purpose.

The investment trust’s strategy is to establish a property portfolio that is diverse by tenant, size and sector (whether industrial, office, retail or leisure) principally by buying property owning companies with tax liabilities which can be extinguished once REIT status is achieved. The key criteria for acquiring target companies will be:

The potential for rental and capital growth of the underlying assets through active property management
Whether or not the costs associated with direct purchases of property can be substantially reduced through the acquisition route

Typical target companies are expected to be controlled by individuals or families with mixed portfolios valued at between £5 million and £100 million. Desirable portfolios will have been conservatively managed and therefore have potential to reach a higher value through more proactive management.

Warren Taylor, Corporate Partner at Nabarro, commented: "This type of REIT should create greater liquidity in the property market. Existing owners should find it more attractive to sell their real estate assets, taking cash or part of their consideration in shares in the REIT, with its greater tax advantages and exposure to a more diversified portfolio. We very much look forward to working with the Company and Rugby Estates in growing the fund over the coming years."

Christopher Luck, Corporate Real Estate Partner at Nabarro, concluded: "This is the first new fund specifically designed to convert to a REIT as soon as all criteria has been met. The Exit REIT represents a creative way of purchasing investment property and provides tangible evidence that the future of REITs will only get more interesting."

The Nabarro team comprised Warren Taylor, Chris Luck, Richard Beavan, James Archibald, Ben Macdonald and Rose Sone (Corporate), Jim Mottram (Tax), Rob Moulton and Roland Nattrass (Financial Services). Travers Smith acted for Sponsor and Broker, Collins Stewart Europe

For further information, please contact:

Chris Luck
Partner
Nabarro
020 7524 6000
c.luck@nabarro.com

Warren Taylor
Partner
Nabarro
020 7524 6000
w.taylor@nabarro.com

Charlotte Tandy
Lansons Communications
020 7490 8828
charlottet@lansons.com