The Budget announcement on REITs has boosted property firms

The Daily Telegraph reported that the UK's biggest retailer was to place its �12bn ($21bn) freehold property into a real estate investment trust (REIT).

This would enable it to use the money raised from selling shares in the REIT to buy back its own stock.

But Tesco has denied that it has immediate plans to do this.

"We're obviously interested [in REITs] in the sense that we're a big property company," the Daily Telegraph quoted Tesco's finance director Andrew Higginson as saying.

"We've got people looking at whether it's a good idea."

Budget move

In his Budget speech on Wednesday, Chancellor Gordon Brown set out the terms for REITs, with a view to introducing them in January 2007.

There is nothing major on the cards right now Tesco See Tesco's share price

Mr Brown proposed that REITs would be quoted property vehicles that distribute 90% percent of their income to shareholders in return for not paying any corporate tax.

A charge of 2% gross assets will be levied on creation of the REIT, which was much less than the 20% feared, making them far more attractive to companies.