Italian REIT gets final go-ahead

Italian Economics minister Tommaso Padoa-Schioppa has signed a decree facilitating the creation of SIIQs, the Italian equivalent of real estate investment trusts. Securities watchdog Consob will oversee the new real estate investment vehicles, while the Bank of Italy will have a supervisory role.

The decree distinguishes between listed and non-listed real estate investment companies, respectively SIIQ and SIINQ. Last May, Italy's main stock market, Borsa Italiana, raised the minimum capitalisation required for the admission of real estate companies to the regulated Expandi stock market to EUR 200 mln. SIIQs will be listed on the Expandi market under the new category 'Real Estate Investment Companies (REIC)'.

To be eligible for SIIQ status and corporate and regional tax breaks, companies will have to pay an entry tax of 20%, over a five-year period, on the capital gain on rental property. At least 80% of real estate assets have to be allocated for rent and rents have to comprise at least 80% of total revenues. SIIQs must distribute at least 85% of profit in dividends. Activities not linked to rents and aimed at development will be treated under the ordinary tax regime.

The maximum stake a shareholder can hold in a SIIQ is 51%, while at least 35% of the capital has to be owned by shareholders who hold no more than 1% of voting rights.

Beni Stabili, Aedes and Pirelli Real Estate have indicated they may become SIIQs. Beni Stabili’s board approved a plan on Monday to facilitate the company's adoption of the status in January 2008.