Changes to Italy’s REIT rules will significantly enhance the appeal of the country’s listed property sector to international investors, encouraging more investment in Italian real estate and allowing local companies that adopt the status to compete on a more equal basis with REIT regimes in other countries, the European Public Real Estate Association (EPRA) said.
The key changes to the new Italian REITs (Società di Investimento Immobiliare Quotate, or SIIQs) rules announced by the government are:
- Lifting the ceiling for a majority shareholding in a SIIQ to 60% from 51%
- Lowering the dividend distribution requirement to 70% of recurring rental income from 85%
- Income from net capital gains is subject to a 50% distribution obligation in the 24 months that follow the year that they are realised
The Italian government presented the changes on SIIQs in late August and included them in the “Unblock Italy” package, which contains measures to improve the competitiveness of the economy and to ease the disposal of surplus state property.
Assoimmobiliare, the Confindustria association of SIIQs, real estate companies and funds, said the new rules are a positive step forward for the Italian real estate market, where the REIT regime has not seen great development after its introduction in 2007.
EPRA board member Aldo Mazzocco, who is President of Assoimmobiliare and Chief Executive of Beni Stabili, said: “The political will and the technical steps taken to simplify the rules and make the Italian real estate market more attractive for long term investments are clear and very welcome.
“These are very important decisions that align Italy with the best European real estate markets, especially the French and the English ones. The Government has done what it was asked to do, now it’s up to private companies to get the most out of this new and more flexible regulatory framework.”