Organised by EPRA and Iberian Property, the Iberian REIT Conference gathered at the Westin Palace several renowned experts and market players, to debate some of the hottest themes concerning REITs in Iberia. This healthy market starts 2020 with a sentiment of tranquility, and expects investment volumes similar to 2019.
According to Dominique Moerenhout, EPRA’s CEO, investors «are looking for growth opportunities in Europe», and there are «great opportunities in Portugal and Spain», at a time when the «quality of the players grew immensely during the last few years. Investors are looking for a transparent market, that is fundamental». Most of all, «we want to pass a very positive message about the Iberian REIT market and the opportunities it offers. We are convinced that with better regulation there would be even more investment». Moerenhout added that «the market exists, the opportunities exist as well, and the investors won’t wait. We must make the REITs bigger, and make business happen».
A great year for investment
Ismael Clemente, CEO of Merlin Properties, the largest Spanish REIT, also present Portugal, believes that «this will be a great year for investment. It doesn’t seem to me that it will be a year with macroeconomic shocks and, if no extreme measures are taken, all will be well», despite admitting a slowdown in investment, «a normal consequence of the cycle».
He also highlighted Merlin’s recent listing at the Euronext Lisbon, in Portugal, since «any international investor sees the Iberian market as a single market». Concerning the new Portuguese SIGI (Portuguese REITs), he believes they will require some legal adjustments.
Attesting Colonial’s interest in this market, Albert Alcocer, Business Director, explained that the company is focused on the office segment, and that «it will remain on that path for the foreseeable future. Concerning the alternative segments, we will see how the market evolves, but we are alert».
Lar España is focused on consolidating its portfolio and keeping an eye out for the retail segment, ruling out co-living and co-working, informed Miguel Pereda, Board Director and CEO at Grupo Lar.
Insurance companies are also focused on diversifying its investment. Mapfre is an example of this strategy, with 3.500 million euro allocated to this market. Ageas alone wants to invest a total 600 million euro in Portuguese real estate, advanced Gilles Emond, Head of Real Estate at Ageas Portugal.
SIGI and SOCIMI: more similarities than differences
Created last year in Portugal, the SIGIs, or Portuguse REITs, are still taking their first steps, and only one company was created, by Sonae Sierra and Bankinter, which will replicate their Ores Socimi. If in Spain, the instrument is a success, in Portugal there is no track record yet.
Pablo Serrano, Partner at Clifford Chance, believes that the two regimes «have more similarities than differences». The most important seems to be stability, but the sentiment in Spain is «reassuring», he considered. «The Government recognises the SOCIMI’s importance», and he considers that the proposed tax changes «do nothing but cause noise, since their practical effect would be zero».
On the Portuguese side, Paulo Núncio, Partner at Morais Leitão, pointed out that «the good news is that Portugal improved the SIGI regime, following a very favourable tax regime, which allowed for the flexibilisation of the «free float» rules», and also the fact that the first SIGI was already created.
Manuel Puerta da Costa, Board Member at APFIPP, remarked that «the regime has just been approved, and we have a great opportunity. We expect to have 10 to 15 SIGIs in the near future. It would be a success if we take into account the proportion when compared to Spain». He believes that «the SIGI’s success will evolve into a new reality, following the legal adjustments to be carried out in the coming years». The regime will be even more successful «if the insurance companies, which invest directly in real estate, start using SIGIs to do it».