Corporate simplification for real estate and construction groups
Why corporate simplification matters in real estate and construction
Real estate and construction businesses have long relied on special purpose vehicles (SPVs) to ringfence project risk, structure finance, enter joint ventures and separate development phases. Over time, however, groups can accumulate dozens, sometimes hundreds, of legacy entities whose original purpose has expired. Maintaining these structures can create unnecessary cost, administrative burden and risk, making simplification a strategic priority rather than routine housekeeping.
Technology is increasingly central to improving decision-making, managing risk and protecting margins. RSM's Real Estate 360 report highlights significant investment in technology and AI, with 33% of respondents prioritising operational and finance system upgrades. However, legacy systems and data quality challenges continue to hinder progress. Complex group structures, dormant entities and unresolved intercompany balances can compound these issues, reducing visibility over performance, working capital and risk.
Even as funding conditions ease, lenders and investors continue to expect clear, well-managed group structures that can withstand scrutiny during refinancing, investment or sale processes. Complex, opaque SPV structures can slow transactions, increase diligence costs and raise questions around historic liabilities. Regulatory and compliance pressures, identified in the Real Estate 360 report as the top risk occupying board time, further increase the burden of retaining dormant or low-activity entities.
The risks and costs of retaining dormant companies and SPVs
This is where corporate simplification plays a critical role. With more than 97,000 dormant UK entities in the construction and real estate sector according to RSM’s Tracker data, many groups are likely carrying companies that no longer serve a clear commercial purpose. As part of a corporate simplification process, Members’ Voluntary Liquidation (MVL) offers a controlled, tax efficient route to closure. Unlike a simple strike-off, an MVL involves a licensed practitioner, settling outstanding matters, and ensuring known actual and contingent liabilities are identified and appropriately dealt with. This is particularly relevant where latent risks may remain, including construction defects, overage obligations, tax exposures, unresolved warranties or retained land interests.
For real estate businesses, corporate simplification provides an efficient way to close completed development SPVs, wind down joint venture vehicles, and tidy up debt-holding entities once projects conclude. It can also reduce recurring audit, accounting and company secretarial costs, free up management time and improve the quality of information available to decision makers. A more streamlined structure improves transparency, reduces compliance exposure, and supports clearer financial reporting.
How we can help with corporate simplification
Delivering a simplification programme requires specialist planning, particularly when dealing with legacy entities, tax considerations, or complex intercompany positions. RSM's integrated tax, accounting, legal and corporate simplification teams help businesses identify risks, manage dependencies and implement an efficient wind-down strategy.
In today’s market, where efficiency, strong organisational oversight and risk control matter more than ever, corporate simplification offers a compelling route to eliminate legacy entities, reduce costs and strengthen governance. Now is the ideal time for organisations to review their group structures and consider the benefits a planned simplification programme can deliver.
If your group structure has evolved over time, contact our corporate simplification specialists to identify opportunities to reduce costs and strengthen governance.