German listed property company IVG Immobilien is planning to launch a real estate investment trust (REIT) with about EUR 2 bn in commercial real estate next year. Bernd Kottmann, chief financial officer at IVG, said the company would wait until 2008 to launch its own G-REIT. In this way IVG will be able to take advantage of a reduction in the tax for REIT conversion that will come into force as part of a larger corporate tax reform, IPE Real Estate quoted Kottmann as saying. Kottmann added that IVG could raise between EUR 225 mln and EUR 500 mln by listing its tax-efficient vehicle, which will have a free float of above 25%.
German listed property company IVG Immobilien is planning to launch a real estate investment trust (REIT) with about EUR 2 bn in commercial real estate next year. Bernd Kottmann, chief financial officer at IVG, said the company would wait until 2008 to launch its own G-REIT. In this way IVG will be able to take advantage of a reduction in the tax for REIT conversion that will come into force as part of a larger corporate tax reform, IPE Real Estate quoted Kottmann as saying. Kottmann added that IVG could raise between EUR 225 mln and EUR 500 mln by listing its tax-efficient vehicle, which will have a free float of above 25%.
Germany introduced its REIT legislation last April, and backdated it to 1 January. The SPD and CDU/CSU coalition government is working on corporate tax reforms that will lower the effective tax rate from 39% to about 30%. This seems to be holding up sales of properties to REIT companies until next year in the country.
Last week, Europroperty reported that IVG was planning to sell its Finnish unit IVG Polar, and exit the Scandinavian market. IVG Immobilien bought the unit for about EUR 135 mln at year-end 2003. IVG Polar owns at present properties valued at EUR 243 mln.
