Over the last year, the company has seen a 24.7% rise in the underlying value of its assets and a 65% increase in pretax profits. CEO Tim Wheeler says it "is very likely the company would convert to a REIT."
Brixton, which has 85% of its portfolio in southeast England, where property prices are at a hefty premium, reports that net rental income rose 16% to euro 142.6 million ($171.4 million). The firm also has around half of its property near Heathrow west of London where restricted green-belt development and demand created by the airport's expansion has boosted land and rental values.
Brixton has a portfolio valued at euro 3.3 billion ($3.9 billion) but market shares value the company at only euro 2.1 billion ($2.5 billion), so it is likely to benefit from using a vehicle that better reflects the value of its assets.
"Brixton has been involved in the debate and representations over draft UK-REIT legislation," according to a company statement. "In last week's budget, a number of key changes to the draft legislation published in December 2005 were announced. We look forward to reviewing the legislation to be included in the Finance Bill and subsequent guidance published by the Treasury over the next few months to assess the benefits of conversion to a REIT for our shareholders."
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