Maplewood International REIT is launching as a cross-border income fund through converting a CPC

REITs increasingly have become listed through backdoor IPOs under which a TSXV-listed capital pool company with nominal capitalization is launched, then effectively converted to a listed micro-cap REIT under a Plan of Arrangement  (see BLF REIT), with a view to bulking up later through subsequent acquisitions and unit issuances (see Northwest International REIT).

The proposed conversion of Holland Global Capital into Maplewood International REIT, whose first (indirectly held) property will be in the Netherlands, demonstrates that essentially the same backdoor technique can be used to create a cross-border income fund from the very first property acquisition.

Maplewood International REIT will not be a REIT for Canadian tax purposes but, rather, an income fund which holds no Canadian real estate or other non-portfolio properties.  Because of this non-Canadian structure, it is possible for the subsidiary Ontario LP of the REIT to offer to acquire the shares of individual Holland Global shareholders in consideration for exchangeable units under s. 97(2), without the need to worry that it thereby would not qualify as an excluded subsidiary entity.  However, as in previous exchangeable structures which have been launched subsequently to the budget announcement of the character conversion rules, no tax opinion is provided to those who wish to exchange their shares of Holland Global for exchangeable units of the LP rather than on a taxable basis for units of the REIT.

Neal Armstrong.  Summary of Circular for Conversion of Holland Global Capital into Maplewood International REIT under Mergers & Acquisitions - REIT and Income Fund Acquisitions - CPC Conversions.