KEY POINTS:
Tax law changes that make property trusts more attractive could lead to the creation of more listed property trusts as investors seek to take advantage of investing in collective vehicles.
"We're not going to see a whole lot list tomorrow, but quite possibly over the next couple of years we might see a couple of them pop up on the back of investor demand because the [property] taxation situation is more attractive than before," said ABN Amro Craigs analyst Mark Lister.
The changes, approved last week, mean investors pay no further tax on the dividend earned by the company.
Under the old tax regime, investors in listed property trusts topped up tax on dividends to their marginal rate. A taxpayer with a marginal rate of 39c in the dollar had to pay an extra 6c on the 33c paid by the property trust. This puts property trusts on a level footing with companies.
Another trend could be an increase in companies moving their assets into property-specific vehicles to maximise returns, Lister said.
"For example, a company that is unrelated to property but which owns [a number of buildings] might find it more attractive for them to sell all those buildings into a property-specific vehicle and rent them back."
The new rules treat investment through portfolio investment entities in a similar way to direct investment by individuals.
