EPRA goes on the offensive on regulation

EPRA, the European public real estate association, has adopted a firmer stance on regulatory issues affecting the listed property sector, CEO Philip Charls told PropertyEU.

‘A key theme we always push with politicians is to reiterate how important real estate is for the wider economy, in areas such as job creation and investment in the European urban landscape. One of the characteristics that we are particularly keen to highlight is how green our sector is. That’s quite unique.’

According to the GRESB survey that monitors KPIs (key performance indicators, ed.) for the real estate industry, Europe ranks second after Australia in terms of sustainability performance. In that context, listed companies have outperformed direct real estate owners.

Charls claims it is no surprise that the listed sector has done a better job on this front. ‘It’s logical. Our members own the newest buildings and are very advanced in how they invest, their shareholders demand it. Investors like APG and PGGM are driving forces. Listed companies are going concerns, they’re not a fund that closes down after 10 years. They have every interest in investing in sustainability.’

It is part of EPRA’s brief to spread the good news, Charls said. ‘Most politicians don’t even have a clue that this sort of research exists. We’ve already had some very useful and positive feedback from MEPs. We use our meetings with them to further explain what the sector does.’

Charls pointed out that a whole new EU parliament now sits in Brussels that EPRA needs to inform and lobby. ‘We need to provide what I call an "education permanente". We have to keep it up. Showing the quality of our sector is all part of our effort to extend our golden age.’

EPRA will continue to lobby in Brussels for the mutual cross-border tax recognition of national REIT regimes under Lord Hill’s ‘Capital Market Union’ initiative, he added. ‘This aims to break down the barriers to cross-border capital flows and so boost inward investment for Europe.’

EPRA is also lobbying, within the context of the EU’s Capital Market Union initiative, for the correction of 'past mistakes'. These include removing cross-border double-taxation and a reduction in the regulatory burden in Europe for listed real estate companies – notably their punishing 39% equities capital weighting under Solvency II rules, compared with 25% for direct property, Charls added.