Belgium is considering the creation of a new non-listed REIT structure for pan-European institutional investors in direct property aimed at establishing the country as a centre for tax-efficient fund structures to rival neighbouring Luxembourg, the PropertyEU/EPRA Benelux Investment Briefing at the Realty real estate trade fair in Brussels heard on Wednesday.
'A key element of the proposed new non-listed REIT regime is to effectively create a new tax efficient platform for institutional investors in direct real estate, who will be able to centralise their income from their other subsidiaries across Belgium and the EU in a single vehicle with a limited life-span of 10 years. This will be a unique step for Belgium in trying to increase its attractiveness as a real estate investment destination,' Laurent Carlier, Head of the Belgian REIT Association and CFO of listed office REIT Befimmo told the briefing.
The existing Belgian listed REIT industry of 17 companies has enjoyed strong growth in recent years, with average investment returns well above Belgian direct real estate and general equities, and it also punches above its weight in Europe, EPRA Special Advisor Laurent Ternisien added. Average dividend yields for the Belgian listed REITs were about 6.56% in Q1 2016, compared with 3.94% for the EPRA Developed Europe Index.
Xavier Denis, COO for Belgium’s largest listed REIT, Cofinimmo said although any new Belgian non-listed REIT regime might be a competitor for the quoted companies, it would be a great development for the market as a whole.
'The new structure would increase diversification and liquidity. When there is so much global demand for investment in the built environment, this is going to help by giving institutional investors more options,' he said.
