The German government is making a 'mistake' by deciding to exclude residential housing from legislation to introduce real estate investment trusts (REITs) in 2007, Deutsche Bank ceo Josef Ackermann has said.
The German government is making a 'mistake' by deciding to exclude residential housing from legislation to introduce real estate investment trusts (REITs) in 2007, Deutsche Bank ceo Josef Ackermann has said.
'We're losing important advantages to other countries and other markets,' Ackermann said in an interview at a banking conference in Frankfurt at the weekend. 'It would have created more jobs here and would have set many things in motion.'
Ministers of Chancellor Angela Merkel's Christian Democrat (CDA-CDU) and Social Democrat (SPD) coalition cabinet gave approval last month for legislation to introduce REITs. Exclusively residential properties build before 2007 were excluded to appease the left-wing of the SPD who are worried private equity groups will buy housing stocks and drive up rents.
German banks and business leaders have been critical of the compromise decision. Last week, Klaus-Peter Mueller, president of the German banking association and ceo Commerzbank, suggested it was 'completely incomprehensible' to prevent apartments from being sold into REITs. Thomas Fischer, the head of WestLB AG and the association of state-owned banks VOeB, said the plan will hurt Germany's industry while helping its international competitors.
Herbert Walter, boss of Dresdner Bank, said it would be a pity if REITs legislation excluded residential property, but added 'it's positive that REITs are being introduced at all, and maybe we will succeed in including residential real estate in a second step by 2009.'
