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REITs Could Invest Up To 15 Billion Euros in Portugal

7 March 2018

The industry based on listed real estate investment vehicles could potentially be worth 10 to 15 billion euros in Portugal, more than quadrupling the amount of commercial real estate investment that was raised in 2017.

Creating a REIT (Real Estate Investment Trust) legal regime is under analysis by the Portuguese government. The potential impact of this type of real estate investment vehicle in Portugal will be one of the central themes of discussion at the Iberian REIT Conference, to be held in Madrid on March 22nd.

These vehicles, which are publicly traded real estate investment companies, have been very successful at attracting foreign capital to invest in the real estate sector in other European countries, including neighbouring Spain. The principal advantage of these vehicles is that they bring with them transparency, flexibility and simplicity for investors, both in terms of taxation and regulation.

According to António Gil Machado, the director of Iberian Property, one of the entities that is organising the Iberian REIT Conference, “this type of instrument can have a phenomenal impact in attracting new investment to the Portuguese real estate sector. The vehicle would be an additional way to invest in the sector, together with the existing alternatives. The country is benefitting from a level of international recognition never before seen, and this is the moment to capitalise on the growing interest of foreign capital, by providing alternatives more in line with European norms to invest safely in the Portuguese market.”

“In Spain, the implementation of a REIT scheme has greatly multiplied the number of listed real estate companies, creating market liquidity and leading to the internationalisation of real estate investment. The same could occur in Portugal. This is an opportunity that the main stakeholders in the Portuguese real estate sector are fully aware of,” the executive stated.

This conference is also being organised by EPRA- the European Public Real Estate Association. The association brings together listed European real estate companies and hopes to lead a debate within the international investor community. The conference will highlight the investment activity on the Iberian Peninsula, as well as the advantages that are inherent in listed vehicles, which push the market towards higher levels of transparency. The discussions will focus both on the Spanish case, where the SOCIMI industry has registered exponential growth, and the that of Portugal, where the creation of such structures is still under study by the Portuguese government and where the potential promises to be enormous.

Original Story: Diário Imobiliário

Photo: João Carlos Santos

Translation: Richard Turner