REITs not for commercial property market
REITs were supposed to bring an injection of capital to commercial property market. This will not happen, at least for the time being.
“Actual government plans with regard to REIT illustrate complete incomprehension of the role played by commercial properties in each mature economy” - comments Robert Szczepanek, attorney at law, owner of Causa Finita Legal Firm when talking to editors of Retailnet.pl.
The Act on REITs, contrary to earlier plans of the Ministry of Finance will probably not come into force on January 1, 2018 - as revealed in the statement of Maciej Obroniecki, deputy head of department of financial market development in MF.
- We are currently at the stage of analysing, we hold meetings so it does not seem that the act may come into force on January 1, 2018 - said Obroniecki, quoted by PAP. Earlier, in the draft of the act presented by MF, the ministry anticipated that the act would come into force since the beginning of next year.
From the point of view of commercial property sector more important than the date of coming into force is the change of its provisions. According to a new concept of the Ministry of Finance, REITs could be run “only in housing formula”, as Maciej Obroniecki informed.
Experts do not hide their disappointment
- Actual government plans with regard to REIT illustrate complete incomprehension of the role played by commercial properties in each mature economy. Only regrettable is the enthusiasm of the sector and time spent by analysts on this subject during analyses of first draft of the act - comments Robert Szczepanek, attorney at law, owner of Causa Finita Legal Firm.
Of the similar opinion is Marek Paczulski, Director in Investment Consulting Department, Savills. - It is not ultimately understandable, why structures of REIT type would not invest in Poland in commercial properties, whereas they do so since many years all over the world. Making it possible to indirectly invest, particularly by individuals in commercial objects, which due to the value of individual transactions are out of reach of their financial capabilities, gives interesting and relatively safer alternative for diversification of investment portfolio - explains Marek Paczulski to editors of Retailnet.pl.
- Let us remember, that as a general rule investing in REIT is long-term investing bearing in mind regularly paid out dividend. Attractively located commercial premises that are in constant demand on the part of tenants match well such a profile, which translates to regular payment of rents - source of payouts for investors - adds the expert of Savills company.
What dictated the change in the act
In the opinion of Robert Szczepanek, current solution is being written basically for one entity: BGK Nieruchomości, related entity of the state-owned Bank Gospodarstwa Krajowego.
- This company would like to acquire capital on the market for projects connected with “Apartment plus” project and the government decided that the REIT mechanism will facilitate it. The situation will probably be different - “Apartment plus” project is not assumed to be a commercial project and consequently will not provide for investors market rate of return. In addition, NBP is planning next year to increase interest rates. If this happens, it will be difficult to convince institutional investors or even small investors, that REITs are attractive ventures compared to bank deposits or bonds - explains his position Robert Szczepanek.