Investors are poised to pounce on more than EUR 550 mln in sales of shares in five French real estate investment trusts, known as SIICs. Majority owners in five SIICS are obliged to sell shares before the end of the year to avoid the companies' losing their tax-transparent status.
Investors are poised to pounce on more than EUR 550 mln in sales of shares in five French real estate investment trusts, known as SIICs. Majority owners in five SIICS are obliged to sell shares before the end of the year to avoid the companies' losing their tax-transparent status.
Three years ago France updated the SIIC regime to include a 60% shareholding limit. To date, the owners of five SIICS have not yet taken action to sell down their shares. With values plummeting during the credit crisis, they have been waiting for better market conditions to reduce their stakes, but an impending deadline on New Year's Eve 2010 is expected to unleash a wave of sales in the coming months.
According to Invest Securities’analyst Benoît Faure-Jarrosson, a vast majority of SIICs are now compliant with the SIIC 4 legislation after selling at strong discounts. The owners of Icade, ANF, Cegereal and Foncière Lyonnais, for instance, took corrective action but five others have already been suspended from the regime and are at risk of permanently losing their tax privileges if they don't do likewise.
The full article appears in the September edition of PropertyEU Magazine. Click on the link below to order a free copy.