The UK Government has published proposed changes to the real estate investment trust (REIT) regime. A key change signalled by the UK treasury is abolition of the conversion charge for companies joining the REIT regime.

REIT regulations will also be eased to allow listing on the London junior AIM and PLUS markets and their foreign equivalents with a view to increasing accessibility to markets for earlier stage REITs.

In addition, the UK government is set to introduce a diverse ownership rule for institutional investors to make investment easier for institutional investors, thereby enlarging the pool of potential investment in property.

The proposals are the result of a consultation exercise concluded over the summer.

'In summary, the proposals will make REITs more flexible for promoters and investors, and reduce the costs of establishing REITs,' said Robert Moir, corporate partner at international law firm Pinsent Masons. 'However,' he added, 'we believe the Treasury has not gone far enough in terms of encouraging REITs, particularly in the context of its desire to encourage residential REITs.'