EUROPE - Addressing the barriers to efficient cross-border investment in European real estate is more important in the near-term than lobbying for the creation of pan-European real estate investment trust (REIT) regime, according to the European Public Real Estate Association (EPRA).
The industry body released European REITs and Cross-Border Investment, a discussion paper at its annual conference in Stockholm today, which seeks to tackle the issue.
The paper summarises the findings of a more detailed research paper and makes preliminary recommendations, including removing the need for EU member states to introduce artificial cross-border participation thresholds for investment in REITs to protect national tax revenues.
EPRA said the focus should be on facilitating cross-border investment rather than lobbying the EU Commission to establish an EU-REIT regime, as is being spearheaded by the European Property Federation (EPF).
"We have concerns that the benefits of a single EU-REIT do not outweigh the complexity of its design and implementation," said Philip Charls, chief executive of EPRA.
"To commence a project to legislate for an EU-REIT now would inevitably create further uncertainty for emerging and developing national REIT regimes for many years. For those reasons EPRA's objective is to seek practical solutions to resolve the tax issues that currently hinder many cross-border, intra-EU investments by REITs incorporated in EU member states," he added.
This is contrast to comments made by Nils Kok of the University of Maastricht, one of the leading proponents of establishing an EU-REIT regime, when he told IPE Real Estate in November 2007 that "tax is one of the major issues but it isn't a huge obstacle". (See earlier IPE Real Estate story: Industry pushes for EU REIT)