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To the need to create a pan European framework vehicle for REITs referred, Rosalind Rowe, Partner, Real Estate Tax, of PricewaterhouseCoopers, Brussels (in a videotaped presentation). She described the investment in these companies as highly effective as it responds to the problems of liquidity with the ability to sell shares rather than property. Creating a pan-European framework for the operation of REITs would result in greater dispersion of risk, discouraging the creation of tax havens and the lack of a bitty market.
PANEL I: The Greek and international reality of Real Estate Investment Companies (REIC)
The first section of the conference, attended by Mr. Aristotelis Karytinos, General Manager of Real Estate, National Bank of Greece, Chairman & CEO, ETHNIKI PANGAIA REIC, Mr. Kyriakos Evangelou, CEO, TRASTOR REIC, Mr. D. Andriopoulos, Chairman and CEO of DIMAND SA and
Mr. George Chryssikos, CEO of Eurobank EFG Properties, was about « The Greek and international reality of Real Estate Investment Companies (REIC)"
Mr. Karytinos, who conducted during the conference, the first official presentation of ETHNIKI PANGAIA REIC said that REITs overseas are usually listed companies of closed type that distribute 80-90% share of profits as dividends. The Greek REICs, mainly due to the strict legal framework, behaved better amidst crisis and returns for the investor to invest today in these types of companies range between 7% and 8%, while those abroad are near 4.5%.
Mr. Chryssikos, for his part said that a significant difference between the Greek and foreign companies is the fact that domestic REIC are unable to engage in real estate development, proved decisive in their defensive attitude to crisis.
Mr. Evangelou said that because foreign companies are also developers, have come to have lost up to 50% of their value since 2007. Nevertheless, the dividend has remained steady at 5-7%.
Mr. Andriopoulos empahasized on the fact that REICs abroad have lost their identity in recent years and led to operate as real estate development companies too.
PANEL II: The institutional framework for foreign REIC and the common effort to establish a common European framework
At the second section on "The institutional framework for foreign REIC and the common effort to establish a common European framework?, the new tax provisions do not affect the fiscal framework that existed so far for REICs both on the issue of taxation of dividends and taxation of property, as Mr J. Dryllerakis, Drileraki Attorney Office noted. One issue, however, which requires regulation even in Greece is that of the taxation of foreign subsidiaries, since the Greek REICs have conducted investments mainly in the Balkans.
At European level, however, at this moment two initiatives are forwarded about the EU REIT, for which consultations were launched in 2007, and the Alternative Investment Fund Manager Directive (AIFM), which is expected to be ready by summer of this year and will determine essentially a framework for alternative investments, including real estate in the European Union, as Mr. Elias Ziogas, chartered appraiser and board member of the Greek RICS, and TEGoVA.
When asked if the new tax bill would lead large groups, of property owners to create REICs, to qualify for the tax of that class of companies, Mr. Byzas, partner in the tax department of PricewaterhouseCoopers, said that in a real estate portfolio REIC should have, inter alia, an adequate dispersion of risk, while maintaining its attractiveness, since it is always listed on the Athens Stock Exchange company.
PANEL III: The future of the real estate market. Sustainable and urban development.
Green development was the central topic of the third section of the conference with the three speakers, Mr D. Andritsos, CEO of Eurobank Property Services, Mr. T. Charagionis, executive chairman of Charagionis Group and chairman of the ICSC Greek Committee and Mr. K. Tsolakidis, a civil engineer, environmentalist, MRICS, to agree that the issue of green development is still in primitive stage in Greece, but it is very timely indeed for the foreseeable future.
Mr. Charagionis said that consumption of a building may be reduced by 50% for only a 10% higher cost.
Mr. Tsolakidis said that now amid crisis is the opportunity for large groups to consider new activities that have to do with green development.
For his part, Mr. Andritsos said the REICs are able to raise specific criteria as to their requirements, among which should also be green buildings. In fact, according to research abroad, green buildings have 3% - 8%, increased rents compared with the conventional and much higher resale value, even if the cost study for the initial construction is quite high.
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