Dutch legislation boosts local Reit competitiveness

Dutch real estate investment trusts (Reits) will become more competitive versus European peers under new tax law that has come into force in the Netherlands this year, says the European Public Real Estate Association (EPRA).

The Association, which represents some €250bn of real estate assets via its members, says the Dutch rules now allow ancillary services to qualified alongside core investment activities for treatment under the Reit tax regime.

Such services could include providing meeting space, in-house catering, supplying energy to tenants, and using social media and marketing tools in locations such as shopping centres. Dutch Reits will also have expanded opportunities to engage in joint ventures, EPRA states.

Ronald Wijs, a member of EPRA’s tax committee said: “This legislation is a major improvement. It should allow Dutch Reits to manage their property portfolios in a more dynamic way and to meet the changing demands from investors and tenants. As a result, it should enable the Dutch FBIs to compete on a more level playing field with Reits in other countries. The Dutch listed property industry, with the strong support of EPRA, has consulted closely with the Ministry of Finance to achieve this very positive change in the rules.”

The Association via its members represents more than €250bn of real estate assets and 90% of the market capitalisation of the FTSE EPRA/NAREIT Europe index.

Within the index series, Dutch Reits are the second biggest component after the UK, with six companies having a combined market capitalisation value of €24bn representing some 30% of the FTSE EPRA/NAREIT Developed Europe index.

Dutch Reits are also key components of the EPRA Global REIT index, including: Unibail-Rodamco, Corio, Eurocommercial Properties, Wereldhave, Vastned Retail, and Nieuwe Steen Investments. Univail-Rodamco is Europe’s largest listed commercial real estate company, created in 2007 through the merger of France’s Unibail with Dutch company Rodamco.

 

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