As pension funds are set to invest a forecast EUR 24 bn or more annually in Europe's real estate market over the next few years, the impending launch of Italy's Societa per Investimento Immobiliare Quotate' (SIIQ) - the Italian version of a real estate investment trust (REIT) - has been greeted enthusiastically by real estate specialists across Europe.
As pension funds are set to invest a forecast EUR 24 bn or more annually in Europe's real estate market over the next few years, the impending launch of Italy's Societa per Investimento Immobiliare Quotate' (SIIQ) - the Italian version of a real estate investment trust (REIT) - has been greeted enthusiastically by real estate specialists across Europe.
For one thing, they said, the tax-efficient SIIQ vehicles will go some way to rectify the long bemoaned lack of transparency in the Italian real estate sector. They are also expected to boost domestic and foreign capital flows into a market that has lagged the rest of the Europe for decades.
'Of course, foreign investors are already active on the Italian stock exchange through listed property companies, but there only three or four that we would seriously look at right now', Sara Bellenda of the property & equities team at Henderson Global Investors told PropertyEU. That could very well change if companies decide to list their own real estate vehicles on the Italian stock exchange. 'This creates another direct investment option for companies like Henderson. And let' s face it, the Italian real estate market is not the most transparent and it is very fragmented. The new REITs should improve the situation,' she said.
Bellenda agreed with other market watchers that the biggest beneficiaries are likely to be companies like Immobiliare Grande Distribuzione (IDG), which currently pays a very high tax rate. But she also expects to see non-real estate companies, such as banks and other financial institutions to spin off real estate holdings as REITs. Foreign companies with operations in Italy, especially on the retail side, may do the same to optimise their fiscal position. The government could also spin off its property holdings.
'These (new vehicles) would all be attractive to both domestic and foreign investors, as long they're managed by reputable and professional parties. And of course, the Italian REITs could well be used as an exit strategy by private equity companies active in Italy. So there will be plenty of investment opportunities,' Bellenda said.