Great Portland Estates plc and its group companies (together, the “Group”) became a Real Estate Investment Trust (“REIT”) on 1 January 2007. REIT status gives rise to taxation benefits for the Group, but does not alter the structure or activities of the Group.

In order to convert to REIT status, the Group was required to pay a conversion charge approximately equal to 2% of the aggregate market value of the properties involved in its property rental business.

Due to its REIT status, the Group no longer pays UK corporation tax in respect of its rental profits and chargeable gains relating to its property rental business. The remainder of the Group’s business continues to be subject to UK corporation tax.

Following conversion, the Group is required to distribute by way of a dividend at least 90% of the income profits (broadly, calculated using normal tax rules) of its property rental business each year.

To maintain its REIT status, the Group must meet certain conditions. These include minimum levels in respect of interest cover and the proportion of the Group’s total profits and assets that relate to its property rental business.