Care home completed in September 2022
Belgium-based specialist healthcare real estate investor, Aedifica, has decided to operate in the UK under the REIT regime. In this context, Aedifica has transferred its real estate activities in the UK, Jersey and the Isle of Man to the recently incorporated AED UK Holdings Ltd. This wholly owned non-listed entity now holds the shares of all UK subsidiaries within the Aedifica group.
“With our status as a UK REIT, we are now taking the next step in our long-term strategy,” said Ingrid Daerden, CFO. “It will allow our UK investments to be more attractive and enhance the contribution of UK cash flows to the group’s results.”
The UK REIT regime was introduced in 2007. Under REIT legislation, companies are exempt from UK corporation tax on UK property investment income and gains on UK property. However, REITs must distribute 90% of underlying tax-exempt property income (not gains) to shareholders within 12 months. These distributions are subject to a 20% withholding tax. Because of the double tax treaty between the UK and Belgium, the net impact of the withholding tax amounts to only 15%.
UK investments
Aedifica made its first investments in the UK in 2019 and established a dedicated local team in 2021. By the end of 2023, the group had acquired and developed a portfolio of over 110 healthcare properties located in the UK, Channel Islands and Isle of Man with a total value of more than €1bn (US$1.09bn), generating €65m in annual contractual rent. Together, these buildings provide a home to more than 7,200 residents. In addition, Aedifica currently has an ongoing investment programme in seven projects in the UK amounting to approximately €76m, of which €61m remains to be invested.
