As UK Prime Minister Theresa May heads to an EU summit in Brussels, having survived a vote of no confidence, a number of European real estate associations have reissued a joint statement on Brexit.
The European Association for Investors in Non-listed Real Estate Vehicles (INREV) and 15 other trade bodies have reiterated their calls on the UK government to maintain market access and avoid new barriers.
INREV said that, at this “critical juncture”, it had once again “called on politicians to ensure that the UK’s departure from the EU does not disrupt real estate investment” in the UK and continental Europe.
The statement says: “We are committed to ensuring that the hundreds of billions of euro that institutional investors from around the globe have invested into the European economy through real estate are not put at risk and, moreover, that the sector can continue to support the economy.”
INREV and the European Public Real Estate Association (EPRA), another signatory of the statement, estimate that the commercial real estate industry contributed €385bn to the European economy in 2017, representing 2.8% of the total economy, and employed four million people.
The statement sets out a number of “principles” that the associations “urge policymakers to respect” as they negotiate the UK’s departure from the EU – including avoiding new barriers.
“We appreciate that political and other factors will play a role, but it is critically important that as few new barriers as possible are created as a result of the UK’s exit from the EU,” the statement says.
On maintaining market access, it says: “A legal framework that both provides access to EU markets for long-term investors, fund managers and lenders in the UK and that allows those based in an EU member state the same access to the UK market will be better for everyone.”
It is unclear what impact the Brexit negotiations will have on UK real estate fund managers operating European real estate funds or managing and marketing to European capital – and vice versa.
The statement says: “Because of the long-term commitments involved in real estate investment (whether in the form of equity or debt), the market relies on the existing legal framework and could be disrupted by prolonged uncertainty or sudden or dramatic changes.
“Frameworks such as those created by the Alternative Investment Fund Managers Directive (AIFMD) and the Market in Financial Instruments Directive (MIFID) are especially important in this context.
“Rights already granted to market participants must be protected so that fund managers can continue to manage and market, and investors can continue to invest their capital across the European economy.”