By James Paul
Germany is pushing ahead with plans to create a market for real estate investment trusts in an attempt to entice foreign investors to buy into the market.
Secretary of State Barbara Hendricks said she is "positive" about the outlook for Deutsche REITs, and expects them to make the country "a forerunner in real estate investment" when they are introduced, probably early next year. She said the ministry will try to push through legislation before the end of the year, as long as the working group that was set up to deal with the tax issues comes up with workable solutions. "D-REITs could then be introduced in January 2006," she said.
Hartmut Leser, managing partner at Feri Institutional Management, Bad Homburg, said there's no uncertainty on the supply side. "We have a lot of real estate owned by the wrong owners," he said. "The question is, is the demand there?"
In the Netherlands, where REIT-style vehicles have been used for the last 20 years, the demand has come from pension funds, particularly the €168 billion ($219 billion) Stichting Pensioenfonds ABP, Heerlen, and the €59.9 billion PGGM, Zeist. "We've also seen an increase in overseas money over recent years — from the U.S., Australia and Japan in the last year," said Harm Meijer, head of the international real estate research team at ABN AMRO, Amsterdam.
Dutch funds are also big shareholders in France's Societe d'Investissements Immobiliers Cote, REIT-style investments that came on the market in 2003. Unibail, Paris, one of the most successful, is 50% foreign-owned; ABP holds 5%.