Consultations on the new institutional framework for Real Estate Investment Companies have been concluded and the government’s decisions are now awaited.
The new framework aims, among other things, to make them more attractive to foreign investors.
The market proposals, under the “umbrella” of the Union of Institutional Investors and the Capital Market Commission, have been submitted (1.8.2024) in the form of a comprehensive draft law to the political leadership of the Ministry of National Economy and Finance and include changes to the tax framework as well as 5 significant interventions in their operation.
Proposed changes
According to the data gathered by “Naftemporiki”, the proposed changes to the institutional framework for the operation of Real Estate Investment Companies include the increase from 25 million to 40 million euros of the paid-up share capital or the amount of equity required for their establishment.
An important change is the institutionalization of the possibility to purchase, construct, operate electricity generation and storage stations from renewable sources (RES), including the construction and operation of photovoltaic systems.
The RES infrastructures will be installed on the properties of the Real Estate Investment Companies aiming at covering their energy needs (and those of their employees), reducing their energy costs and their carbon footprint.
The new institutional framework also clarifies the possibility to purchase, sell, develop and exploit real estate, through leases, use of concession contracts, or public partnership contracts (PPP).
Furthermore, they request to be allowed to provide services such as hospitality, hotel management and tourist accommodation in general.
According to another provision, the price paid by the Real Estate Investment Companies for the acquisition of a property may be up to 15% higher than its value, as determined by the independent appraiser, while the price for the sale of an investment may be lower up to also 15% of its value. In the current institutional framework, this percentage is 5%, which is considered to limit their flexibility, among other things, to proceed with investments of strategic importance or restructuring of the composition of their portfolios.
