Experts split over benefits of internalised management for REITs

Each structure brings 'pros and cons'

Internalising management for REITs removes the risk of further complicating cost reporting for investment trusts, but experts warn the advantages of an externally managed vehicle are also taken away.

Their caution came after Supermarket Income REIT (SUPR) put forward proposals to internalise its management function, subject to shareholder approval, while three days later, on 7 March, Urban Logistics REIT's (SHED) board said it agreed to an internalisation proposal. If implemented, the proposals would cut down on annual operating costs, with SUPR's board arguing the management internalisation could deliver "significant cost savings of at least £4m per annum". Gravis' Matthew Norris: Why private equity is snapping up REITs for a bargain As a result of switching to an internalised...