Self-storage group Safestore is considering becoming a real estate investment trust (Reit) after its planned £700m flotation early next year.
The company, taken private three years ago by buyout firm Bridgepoint, has appointed Merrill Lynch and Citigroup to advise it on a sale or float. The group has put together information packs to send out to potential buyers, but insiders say a float remains the most likely option. Should that happen, the company could be one of the first to become a Reit.
"Big Yellow, our closest rival, is looking at it and it's something we're certainly considering," said a spokesman. "We will take a view after the float, but the advantages are that we pay less tax."
Reits are new forms of property company that pay out 90 per cent of rental incomes in dividends. The benefit is that rental income and capital gains are exempt from corporation tax.
Despite the imminent launch of Reits in January, some concerns remain, particularly over a rule that limits the size of stakes available to shareholders. But many in the industry believe this will be abandoned.
"There are some issues to be ironed out, one of which is that you cannot have shareholders with stakes of more than 10 per cent," said the Safestore spokes-man. "But that just won't work."