However, it could have wider implications for the way people do business right across the shopping centre industry.

As Nick Ritblat, president of the British Property Federation, points out (see my interview with him on p. 8), the introduction of REITs could accelerate the trend towards flexible leasing through two separate mechanisms.

First, REITs have to distribute 95 per cent of their net income to their shareholders, which means owners and managers will put a premium on income generation, rather than focusing on capital appreciation as they have in the past. If shorter and more flexible leases command higher rents then REIT landlords might be tempted to go for them.

And second, Ritblat forecasts that REITs will attract more capital into the property sector. An increase in development activity at a time when the number of tenants in the market is finite should lead to what he calls a 'buyers' market' for tenants, which means they could demand more flexible leases if that's what they really want.

This inflow of capital could also create opportunities for consultants of all sorts: if new players are attracted into the market who don't have a track record in shopping centre development or management they're certainly going to need somebody to hold their hand through the process.

Smaller developers like Centros Miller are already positioning themselves as development managers prepared to run schemes on behalf of other investors.

Certainly British Land, Land Securities, Hammerson and Capital Shopping Centres have all been making positive noises about the change to REIT status. If they're right then what looked like tinkering with the tax regime could bring much wider benefits to the sector.

Graham Parker, Editor

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