Meeting Point leads charge for European REIT

Real estate and financial professionals held a special meeting at the Barcelona Meeting Point real estate symposium on Wednesday to push for the introduction of European-wide real estate investment trusts (REITs).

The campaign is spearheaded by the Brussel-based European Property Federation (EPF). The federation's Director General Michael MacBrien told a seminar, organised by the Royal Institution of Chartered Surveyors (RICS), that the challenge was not to modify existing draft legislation but to get the European Commission to generate new legislation to create something totally new. 'We have to convince the European Union that a European REIT can help real people, ' he said.

To this end, representatives of the EPF, the European Banking Federation, the organisation of European landowners and the European Mortgage Federation met during Barcelona Meeting Point on Wednesday to 'build a broad coalition' around the EPF's submission to the European Commission on the creation of a European REIT.

A REIT is a vehicle under which investment can be directed in a tax efficient manner into the real estate sector. America was the first country to introduce REITs back in the 1960s, and a number of other countries, including Australia and Japan, have followed suit. France, Belgium and the Netherlands are among European states with vehicles broadly similar to the REIT. Germany and the UK plan to introduce national REITs in 2007.

MacBrien's federation argues that the lack of a pan-European REIT is creating competitive distortions in the Internal Market. He said it stunts the capacity of the property industry to develop on a European scale, hurts small member states and their savers, and leads to poor allocation of capital in the EU. He said a European REIT would address these issues.

The clause on the enhanced cooperation in the EU's Maastricht Treaty would ease the process, MacBrien said, as countries that wished to proceed with a European REIT could do so, while countries that opted out could choose join at a later stage.

Joaquim Ribeiro, head of finance, planning and conrol for Sonae Sierra in Porto, told the seminar that a European REIT would lead to a more transparent and efficient property market in Europe. He also contended that REITs could be a good savings vehicle as part of the process of restructing pension provisions across Europe.