http://www.engineeringnews.co.za
  SEARCH
Login
R/€ = 14.21Change: 0.00
R/$ = 10.60Change: -0.04
Au 1299.38 $/ozChange: 1.82
Pt 1483.50 $/ozChange: 4.00
 
 
Note: Search is limited to the most recent 250 articles. Set date range to access earlier articles.
Where? With... When?








Start
 
End
 
 
And must exclude these words...
Close Main Search
Close Main Login
My Profile News Alerts Newsletters Logout Close Main Profile
 
Agriculture   Automotive   Chemicals   Competition Policy   Construction   Defence   Economy   Electricity   Energy   Environment   ICT   Metals   Mining   Science and Technology   Services   Trade   Transport & Logistics   Water  
What's On Press Office Tenders Suppliers Directory Research Jobs Announcements Contact Us
 
 
 
RSS Feed
Article   Comments   Other News   Research   Magazine  
 
 
Feb 23, 2012

Growthpoint in discussions with Treasury on Reit legislation

Back
Cape Town|Engineering|Johannesburg|Africa|Growthpoint|Real Estate Investment Trust|Rental|Africa|South Africa|Listed Property|Estienne De Klerk|Norbert Sasse|Pravin Gordhan
Engineering||Africa|Rental|Africa|||
cape-town|engineering|johannesburg|africa-company|growthpoint|real-estate-investment-trust|rental|africa|south-africa|listed-property|estienne-de-klerk|norbert-sasse|pravin-gordhan
© Reuse this



South Africa’s largest listed property group Growthpoint, along with other players in the sector, is continuing discussions with the National Treasury Tax Policy Unit about introducing Real Estate Investment Trust (Reit) legislation in South Africa, executive director Estienne de Klerk said Thursday.

De Klerk, who is the chairperson of the Property Loan Stock Association, added that significant progress has been made on the proposed Reit regulations, as well as finding an appropriate regulatory framework and efficient Reit structure for South Africa.

Finance Minister Pravin Gordhan said in his 2012 Budget speech on Wednesday that the Treasury would bring the governance and tax treatment of property loan stock entities in line with the present treatment of regulated property unit trusts.

The Treasury explained that rental income from property loan stock entities would fall under the pass-through regime that applied to property unit trusts.

Property unit trusts and property stock loan companies typically provide a commitment to distribute a minimum of 90% of their rental income to investors. The distribution of rental income is effectively tax-neutral in the hands of the property trust. The Treasury said property loan stock companies appeared to achieve roughly the same result but without official sanction.

“They issue investors a dual-linked unit that consists of a debenture and a share with the distribution in the form of interest. The dual-linked structure needs to be eliminated so that other entities do not undertake the same structure to avoid tax by relying on excessive debt,” it stated.

De Klerk told Engineering News Online that the Reit legislation would rebrand property loan stock companies and property unit trusts so they would be recognised as Reit companies under the Tax Act.

“This means that these entities will be exempt from capital gains tax.

“The new South African Reit structure will yield many benefits such as offering tax certainty and efficiency relating to distributions, which will be recognised as rental from a taxation point of view, therefore their income will retain its major,” he said.

This followed the National Treasury’s announcement last year after the implementation of the Tax Amendment Bill in April of its intention to finalise the Reit legislation before 2013.

The bill raised the priority of Reit legislation.

COMPANY PROSPECTS

Meanwhile, Growthpoint CEO Norbert Sasse stated at the company’s interim results presentation in Johannesburg that above-inflation increases in electricity, rates, taxes and other administrative costs remained a concern.

Sasse said that access to liquidity was expected to remain good with strong demand for the company’s corporate bonds and equity, as well as a willingness by, among others, all the major banks to provide debt facilities to Growthpoint.

The company also anticipated its V&A Waterfront property portfolio in Cape Town would deliver over 7% return on cost of developed properties in line with its due diligence forecast.

Further, he noted that the overall vacancy factor is unlikely to reduce much below the current 4%, with negative rent reversions in the office sector unlikely to change until such time as national office vacancies across all grades start to improve.

The company reported a 6.1% distribution growth to 67.8c a linked unit, which was in the upper end of the guidance previously given to the market.

The company also reported an increase in revenue to R2.68-billion from R2.23-billion in the previous corresponding period.


 

Edited by: Mariaan Webb
© Reuse this Comment Guidelines (150 word limit)
 
 
 
 
 
 
 
 
 
Latest News
Updated 22 minutes ago In its first monthly decrease since February, the South African Chamber of Commerce and Industry’s (Sacci’s) Copper Theft Barometer level has contracted to R12.2-million in June from R15.4-million in May, coinciding with a drop in the volumes of coppers stolen...
Updated 52 minutes ago Integrated shipping and logistics group Grindrod and black-owned investment firm Brimstone Investment Corporation have successfully concluded a black economic-empowerment (BEE) transaction, which has resulted in a Brimstone-led consortium acquiring an 8.4% interest...
Gibela CEO Marc Granger
Updated 55 minutes ago Gibela has three main challenges in executing the R51-billion contract to supply the Passenger Rail Agency of South Africa (PRASA) with 600 new trains, says CEO Marc Granger.   The first is to complete the design engineering of the X’Trapolis MEtric GAuge (Mega)...
More
 
 
Recent Research Reports
Real Economy Year Book 2014 (PDF Report)
This edition drills down into the performance and outlook for a variety of sectors, including automotive, construction, electricity, transport, steel, water, coal, gold, iron-ore and platinum.
Real Economy Insight: Automotive 2014 (PDF Report)
This four-page brief covers key developments in the automotive industry over the past 12 months, including an overview of South Africa’s automotive market, trade figures, production and the policies influencing the sector.
Real Economy Insight: Construction 2014 (PDF Report)
This five-page brief covers key developments in the construction industry over the past 12 months. It provides an overview of the sector and includes details of employment in the sector, infrastructure and municipal spending, as well as insight into companies’...
Real Economy Insight: Electricity 2014 (PDF Report)
This five-page brief covers key developments in the electricity industry over the past 12 months, including details of State-owned power utility Eskom’s generation activities, funding and tariffs, independent power producers and prospects for the sector.
Real Economy Insight: Road and Rail 2014 (PDF Report)
This six-page brief covers key developments in the road and rail industries over the past 12 months, including details of South Africa’s road and rail network and prospects for both sectors.
Real Economy Insight: Steel 2014 (PDF Report)
This four-page brief covers key developments in the steel industry over the past 12 months. It provides an overview of the global and South African steel and stainless steel markets, South Africa’s major steel producers and events that have shaped these markets.
 
 
 
 
 
This Week's Magazine
Multinational semiconductor chipmaker corporation Intel announced its national campaign to further acquire partners to drive its She Will Connect programme, an initiative that aims to expand digital literacy skills to young women in developing countries, further into...
South Africa's MeerKAT radio telescope array programme should get back on schedule within a few months. This assurance has been given by SKA South Africa (SKA SA) associate director: science and technology Prof Justin Jonas. Early last month, Science and Technology...
The Passenger Rail Agency of South Africa’s (PRASA’s) Metrorail service will remain a subsidised service following its current multibillion-rand rolling stock, station, depot and signalling upgrade programme. PRASA group CEO Lucky Montana has allayed fears that...
GARYN RAPSON Contaminated Land Provisions in the National Environmental Management: Waste Act No 59 of 2008 will open the door for court battles to determine who will be held liable for the remediation
The uncertainties around the remediation of affected areas as addressed in the Contaminated Land Provisions in the National Environmental Management: Waste Act No 59 of 2008 will possibly spark litigation and disputes between landowners and businesses, contractors...
South Africa is currently the largest component of the African Development Bank’s (AfDB’s) active portfolio in Southern Africa, comprising 62.5% of the bank’s $7.9-billion exposure to the 12-country region – the second largest beneficiary is Mauritius, which...
 
 
 
 
 
 
 
 
 
Alert Close
Embed Code Close
content
Research Reports Close
Research Reports are a product of the
Research Channel Africa. Reports can be bought individually or you can gain full access to all reports as part of a Research Channel Africa subscription.
Find Out More Buy Report
 
 
Close
Engineering News
Completely Re-Engineered
Experience it now. Click here
*website to launch in a few weeks