Flex office operator CLS Holdings has revealed plans to exit the UK REIT regime at the end of the year.
CLS posted a £69.6m loss in H1 2026
The company owns and manages workspaces in the UK, Germany and France.
The move has been prompted by recent changes in the company’s share ownership that mean CLS no longer meets the REIT legislation requirement not be a “close company” – one owned by five or fewer investors or controlled by directors who are also investors.
The change means that from January, the group will no longer be exempt from UK corporation tax on rental profits or property sales, which will now be taxed at the standard UK corporation tax rate. However, its property management and investment strategy will remain unaffected.
Future dividends from the company will also generally be paid as ordinary dividends, except for the final 2026 dividend, which will be paid as ‘property income distribution’ to meet REIT conditions.
CLS chief executive Fredrik Widlund said in a statement: “This is an event that is outside of the control of CLS. Nevertheless, we continue to focus on our key strategic objectives to reduce vacancy and improve earnings growth; reduce debt through targeted asset sales; refinance or repay debt maturities; and invest selectively in our portfolio to unlock additional value.”
In August, CLS posted a £69.6m loss in its half year results to the end of June, deepening from £24.4m in H1 2025.
The group said this was primarily driven by investment properties falling in value by £84.2m, while the UK suffered the most out of the firm’s three main geographic markets.
The firm said at the time that it was committed to its long-term strategy of owning and managing offices across the UK, Germany and France, with a short-term focus on reducing vacancy rates and strengthening its balance sheet through refinancing and disposals.
Read Property Week’s 2026 analysis of the UK 17 listed property companies here.
