At the end of January, an intimate group of investors were gathered in Madrid in an Editorial Breakfast organised by Iberian Property, which counted with the support of Clifford Chance, to discuss the listing alternatives for Spanish REITS.
Pablo Serrano de Haro, Global Practice Area Leader for Tax, Pensions and Employment at Clifford Chance, presented what the last decade of the regime has brought to us, and he reminded that the original Spanish REIT law was actually established in 2009, despite the clear lack of success at the time. Fortunately, we could follow other countries examples and by the end of 2012 new amendments were established, making the regime attractive at last. “It was in 2014 that the first important listings were completed, and today we are happy to see that the regime has flourished”.
Currently, Spain has 117 SOCIMIs, 96% of which are listed on alternative markets, investing across almost all asset classes.
For Pablo Serrano de Haro even though there was a “boom” between 2014-2019, there is still a strong pipeline and there are many segments unexplored, like the case of German investment funds which are known for allocating a significant amount of capital to the country but never under the SOCIMI regime. Private banks are another type of investor which might materialize some important incorporations due to their usual strategy of exposing clients to real estate.
He also added that what we can expect is a consolidation of the market and an increased number of operations inside the regime. “SOCIMIs like to trade with each other, you can almost say that a parallel market was created because they share structure and transparency, and they can count on not finding any hidden charges”.
For Clifford Chance, there is no room for doubt that the SOCIMI regime had a very positive impact in the Spanish economy, but some fine tunings are due. It is not understandable that an EDAV has a tax benefit and that a SOCIMI does not when both buy houses, just as it does not make sense that in BTR you lose the VAT… so there are some issues to improve in the tax regime of real estate investments, however change requires political attitude and vision to really energize the market as it happened when a profound revision of the 2009 law of the regime was made.
See here this event SPECIAL STORY
