Two companies with substantial commercial property portfolios in Nigeria sought assistance preparing their assets for sale. Both clients faced challenges in disposing of their properties through bulk or individual sales.
Exploring alternative sale structures by investigating the potential of Real Estate Investment Trust (REIT) and Real Estate Investment Company (REIC) structures as viable alternatives to direct sales, given the complexities of the market.
A Tax impact analysis to evaluate the tax consequences associated with each structure and ensures that any chosen path avoids substantial tax liabilities. This particularly took account of the special rules for taxation of REITs in Nigeria.
Implementation strategy for REITs as a commercially viable solution designed to facilitate asset disposal without incurring significant tax costs.
The analysis concluded that the REIT structure offers an effective and tax-efficient route for portfolio disposal. This approach meets the clients’ commercial objectives and aligns with regulatory and market requirements, positioning both property groups for an efficient and potentially profitable exit strategy.
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