Belgian real estate investment trusts (REITs) are looking to change their status to avoid falling under the Alternative Investment Fund Managers’ Directive (AIFMD).
Brussels-based Cofinimmo called an extraordinary general meeting for the end of the month, asking shareholders to approve a change of status to SIR (Société Immobilière Réglementée). A decision will then be made in October.
SIR was introduced by the Belgian government this year. By changing to SIR, Euronext-listed Cofinimmo will retain Belgian REIT (SICAFI) status, but be recognised as a corporate entity.
The move will then mean Cofinimmo avoids being classed as an alternative investment fund.
Rival Belgian REIT Befimmo is taking similar steps and has asked shareholders to vote on its own plans next month. The Ageas group and AXA Belgium, Befimmo’s two largest shareholders, have both expressed their support for the status modification.
Befimmo said the move was about “positioning itself as a REIT… and not being considered as an alternative investment fund, a qualification that will, going forward, be attached to real estate investment companies”.
In March last year, the EU commission issued guidance on AIFMD, in response to a question about whether real estate investment companies fell inside or outside the scope of the new legislation.
This, it said, depended on the whether or not the entity fell under the definition of an alternative investment fund (AIF) in the directive’s wording, but crucially added that that each situation needed to be valued “on its own merits, based on substance, not on form”.
Gareth Lewis, a consultant for the Urban Land Institute (ULI) and former director at the European Public Real Estate Association (EPRA), told IP Real Estate that most existing European REITs and listed property companies were likely to fall outside the scope of the directive. But he said many new REITs coming to the market – such as those in Ireland and Spain – did look more like funds.