Foreign investors to swoop on Dutch listed funds

Dutch listed property funds will likely be targetted by foreign investors this year due to the removal of legal obstacles, researchers at merchant bank Merrill Lynch have suggested. In a report published this week on the European real estate sector in 2007, Merrill Lynch said: 'The greatest surprise comes from the Netherlands. Potentially the etire Dutch sector could be up for sale.'

The report named Rodamco Europe, Eurocommercial Properties, VastNed Offices and Werledhave as potential targets. At the moment foreign investors cannot hold more than 25% of these funds but this impediment is likely to be scrapped in a reform of the leglisation for fiscale beleggingsinstelligen. Commonly referred to as FBIs, this structure is roughly equivalent to real estate investment trusts (REITs).

Lawyers from large Dutch firms say they are being contacted by foreign clients about the foreign ownership and other reforms of the FBI system, newspaper Het Financieele Dagblad reported. Other reforms include allowing FBIs to engage in project development for their own account and a reduction in dividend tax.

But the large FBIs contacted by the newspaper said that they did not expect the reforms would have a major impact. 'It will be easier to be takenover but that does not mean the door stands wide open,' said Evert-Jan van Garderen, a director of Eurocommerical.