Already the
close financial staff of the Prime Minister (Patelis, Demitriadis, Skertsos)
and the Minister of Development Adonis Georgiadis, in a recent meeting with the
heads of investment institutions and the Capital Market received and studied a
memorandum with amendments / remarks that extend the field of Greek REICs
keeping the tax-free dividend stable, which is also a pan-European advantage.
As a member of the committee characteristically noted, "there was no page
of the law without red comments".
The new
legal framework is currently being drafted by international law firms that have
delved into the fine print of the institution and is expected to be adopted in
the first quarter of the new year to attract funds from many insurance funds
and insurance companies. It should be noted here that occupational insurance
funds internationally, have large positions in real estate (in Northern
European countries their portfolio includes more than 85% of real estate) as
listed REICs provide them with much higher returns than bonds, and in addition
to the fixed dividend there is the added value of the securities traded on the
capital market.
Here,
however, there are several risks, such as the oversupply of a new product as it
is expected, if one counts the announcements (pipeline), the entry of 300,000
sqm of offices and other commercial real estate in the whole territory with the
majority of them in Attica.
In terms of
activities, the submitted proposals envisage REICs to be able to operate as
development companies, hotel operators, red loan managers (servicers),
photovoltaic and wind farm development companies, housing managers and a number
of other services currently provided by different " sectoral »entities.
This
concentration obscures the existing market structure, mainly because as an
institution it favors the absence of tax payment, since there is a suggestion
that no tax be paid on cash held as liquidity, a constant request of these
companies that goes back to 2014. However, it enables projects to be
implemented that are only possible in the case of the dematerialization of
assets.
Double
transition
The number
one tool to attract FDI today is tackling the effects of the coronavirus
worldwide, and in particular the changes that the pandemic has accelerated
dramatically. These have to do on the one hand with the change of the energy
mix in a shorter time horizon, but also with the digital transformation of the
-now globalized- economy.
The real
estate asset is once again at the center of developments, as buildings and
transport are responsible for more than 50% of the emissions to be cut, and at
the same time it produces a huge amount of data - in addition to energy
consumption - that changes the context. investment decision making. And here
come the ESG criteria and practices. An expensive sport, which Brussels uses as
a lever of pressure on large companies and the banking system.
The so-called
green deal
Adding the
word Impact to the Risk - Return equation dramatically changes the way built-up
space is produced, especially in cities, where the building stock is huge and
the vast majority old. Developers and Private Equity Funds that have as their
exit the REIC, must have an energy upgraded, "green" product, in
order to be lent by the banking system, or to issue green bond loans for new
developments and upgrading / restoration of existing buildings. All the actors
have to "share" the cost of the transition and this is one of the
reasons that the AEEAPs ask to expand the field of activity, through the
possibility of:
creation of
RES parks (wind / photovoltaic) and implementation of virtual net metering to
reduce the energy costs of the total portfolio.
purchase
loans with mortgages for faster impairment of NPEs
expansion
in the housing sector, through the utilization of the asset, property and
facility management mechanisms they have.
The next
day for the Greek REIC, includes the creation of new ones, specialized in
alternative strategies and specifically in the fields of tourism, retail and
storage. It is doubtful whether there will be partnerships and acquisitions
between the existing ones mainly due to the Greek temperament as the law will
keep the bar very low (at € 25 million) and the 4 buildings, which may be a
"broken" into four horizontal properties.
For those
who want to have a pan-European impact, it is an opportunity to create a new
product, which will feed their portfolios and will excite a larger number of
foreign institutional funds, when our country acquires an investment grade.
