Beni Stabili gives up on REIT status for 2008

MILAN, Feb 18 (Reuters) - Italian real estate company Beni Stabili (BNSI.MI: Quote, Profile, Research, Stock Buzz) has decided not to change its status to a Real Estate Investment Trust (REIT) this year and will watch market conditions to see whether to go ahead in 2009.

The company could not transform into a REIT -- known in Italy as a SIIQ -- this year because its majority owner, French Fonciere des Regions (FDR.PA: Quote, Profile, Research, Stock Buzz), decided not to reduce its 68 percent stake to the required 51 percent ceiling.

Fonciere des Regions did not want to sell shares because they are currently 45-50 percent below net asset value.

"We invested in Beni Stabili to create value, not to lose it," the Italian company's chairman Cristophe Kullmann told an analysts' presentation.

"We had until April 30 to decide, but we have recognised that we cannot do it in 2008. We'll see what the market conditions are at the end of the year to decide on 2009," Kullmann added.

Italy's outgoing government introduced legislation to kick off creation of SIIQs -- specially created property funds that offer tax breaks to investors -- in 2008.

But so far the only concrete proposals have come from bank Intesa Sanpaolo (ISP.MI: Quote, Profile, Research, Stock Buzz) and real estate firm Aedes (AEDI.MI: Quote, Profile, Research, Stock Buzz).

Investment specialists have said the SIIQ conditions are not sufficiently attractive because they do not extend tax breaks to capital gains reinvested in property and there is a lack of clarity over the treatment of foreign investors.

Beni Stabili has instead decided to buy back up to 5 percent of its stock.