Real Estate Investor Magazine South Africa February/ March 2020 | Page 53

R
eal Estate Investment Trusts continue to maintain their
standard in the global real estate sector, providing
investors the platform to diversify their investment
portfolios. Over the years Poland has become one of
the biggest real estate investment regions in the world,
providing wealth-generating real estate assets that appeal
to world-class real estate investors. on a country first-hand. After South Africa’s property sector
actively championed for it, the SA REIT legislation became
a reality in the country on 1 May 2013. He added that “SA
REITs ensure that the vehicle for the monetising and listing
of property assets in South Africa is consistent with REIT
structures internationally, making the sector more attractive
for both local and international investors.”
REITs are consistent and provide a broadened real estate
investment field. The Polish real estate market has interestingly
high foreign capital estimated to be at about 90%. With
the various real estate investment sectors performing
exceptionally well in the country, Poland is deemed one of the
most diverse real estate investment jurisdictions. However, the
absence of REITs legislation in Poland has a limiting factor to
real estate investors in the country, something that is greatly
felt by real estate investors who have seen the impact of REITs
in countries like South Africa. “Looking at the massive
benefits that REITs provide to
both professional investment
companies and private
citizens across a nation, we
have to wonder why we don’t
already have this legislation.”
Real estate sector saturation
In Poland the real estate and property sector is highly saturated
from primary office market to retail, warehouse and the
entire commercial sector, and all these sectors are greatly
contributing to the growth of this country. The saturation
indirectly allows for the growth of smaller independent service
providers as many investors choose to move towards these
smaller investment ventures.
The availability of REITs for local Polish investors would have
come as a source of relief to the high saturation. Allowing
some real estate investors to invest in trusts that will continue
to maximise their wealth and business growth by investing in
already existing markets.
“SPVs are used for a number
of purposes including the
acquisition and/or financing
of a project, or the set-up of a
securitisation or a structured
investment vehicle.”
REITs impact in real estate sector growth
Drawing inspiration from South Africa’s Real Estate Investment
Trusts that are listed in the Johannesburg Stock Exchange,
Poland’s largest owner of shopping centres EPP shared with
Polish government some of the benefits that Poland and
citizens would enjoy if Poland was to become a REITs friendly
country.
Rafal Kwiatkowski, EPP’s Chief Operating Officer, said: “Being
the excellent avenue that creates wealth, the property sector
should be more open to investors in the country. It would be a
great vehicle for people to invest their retirement savings.”
He said EPP has witnessed the benefits of REIT legislation
Legal framework in real estate
Similar to the South African legal framework adopted from the
Dutch legal systems, the Polish civil and administrative laws are
similar to German and Australian legal framework. However,
the limitations and regulations in Poland are not as harsh and
strict as the two sister states, especially to foreign real estate
investors when compared to other sovereign countries.
Foreign investors intending to invest in Poland conduct
activity in the country through their own Special Purpose
Vehicles (SPVs), which are registered in Poland and/or any
other European Union member state. This means foreign real
estate investors can buy and sell real estate in Poland freely.
It allows them to occupy the real estate market, but with the
absence of a legislation allowing for the full functioning of
REITS in the country the Polish real estate sector is reduced and
limited to the already saturated industries.
A legal entity created for a limited purpose, SPVs are used
for a number of purposes including the acquisition and/or
financing of a project, or the set-up of a securitisation or a
structured investment vehicle.
It is for this and many others that EPP CEO believes that
the Polish government needs to revisit the REITs legislation
in the country. “This would be a simple legislation for the
government to pass and would have a positive effect on the
economy, especially now that Poland has been rated among
most developed countries list on the Standard & Poor (S&P)
for a full year and, like the rest of the world, will have to deal
with economic fallout from trade wars and slowdowns in our
neighbours’ economies,” said Kwiatkowski.
Kwiatkowski concludes: “As a Polish company we would
like to be more accessible to the Polish investors, looking at
the massive benefits that REITs provide to both professional
investment companies and private citizens across a nation, we
have to wonder why we don’t already have this legislation.”
SOURCES EPP, Lexology
SA Real Estate Investor Magazine FEBRUARY/MARCH 2020
51