Herbies bags UK’s first REIT

Herbert Smith has secured the first mandate to advise on the creation of a real estate investment trust (REIT), acting for long-standing client Hammerson.

Hammerson has announced it would make the conversion in January following favourable announcements in Gordon Brown’s budget earlier this year, making it the first major UK listed property company to signal its intentions publicly.

The converstion, being led by Herbert Smith corporate partner David Paterson, follows on from similar work the firm did for Hammerson in France in 2004.

“We have been Hammerson’s core corporate advisors for some time, and our tax team has been closely involved as well,” said Paterson. “We are not exclusive on the real estate side, but we do a big share of their real estate work. We did not have to compete against other firms to secure this work.”

Paterson said while the announcements in the UK budget had been welcomed, there are still gaps in the regulations the lawyers are waiting for to be filled.

“[But] there is sufficient information there to make the company confident of going down this path,” said Paterson. “The balance of this year will be spent meeting all the tests to ensure the company is ready to convert in January.

“The task for us is to understand Hammerson’s portfolio, so we have involved our real estate department as well as the corporate and tax practices. This is some very technical tax legislation.”

Paterson is supported by the firm’s tax head Neil Warriner and real estate partners Don Rowlands and Chris de Pury.