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I had some very positive feedback from the attendees of the recently held Reporting & Accounting Summit. We were entertained by presentations varying from maintenance capex and Alternative Performance Measures to real estate fintech and the responsibility to understand what the future holds for us and our sector. Technology trends, consumer behaviour and climate change impact on cities are topics of growing interest to European investors. It thus makes sense that the theme of our Annual Conference, held on 5-7 September in London, is “RE-think. Dealing with uncertainty and change”.
EPRA members’ commitment to sustainability was on show in Berlin this week. The team held a successful workshop on sustainability Best Practices Recommendations (BPRs) and investors and property companies discussed the correlation between financial returns and sustainability. Investors rely on EPRA’s financial and sustainability BPRs and we believe it is now the time to address their appetite for Environmental, Social and Governance (ESG) matters. EPRA will hence work to bring the ESG element and the sustainability BPRs up to the same level of corporate acceptance that has been achieved in financial reporting.
In a wider perspective, we are always looking how to further encourage our industry’s constant efforts in promoting social change and development in the community. This is why during this year’s Conference we will reward our members' initiatives that aim for a social-environmental positive change. The competition is open, make sure to enter or nominate a project by 31 May!
Dominique Moerenhout

The benefits of the European listed sector

Access to liquidity, diversification and transparency? FTSE Russell has prepared a research highlighting the benefits of adding global listed real estate to the portfolio. This infographic shows the share of the property markets represented by listed property companies in Europe, North America, Asia-Pacific and Africa/Middle East. Within the real estate asset class, listed real estate securities offer a combination of features that are important for investors unable to consider direct investments or who may be concerned about the illiquidity and high transaction costs traditionally associated with the asset class. In the wake of low interest rates and the aging of the society, the listed sector offers solid long-term income, with an annualised return for the European listed real estate of 7.8% over 15 years (as of March 31).

ECJ interprets the ‘subject-to-tax’ clause for REITs

The European Court of Justice (ECJ) issued its judgment regarding the interpretation of the subject-to-tax requirement set in the Parent-Subsidiary Directive. This provision requires that the company is subject to one of the taxes listed in the Directive without the possibility of an option or of being exempt. The ECJ Judgment considers that this rule lays down a positive criterion and a negative criterion for qualifying as a “company of a Member State”. It means that a company of a Member State needs to be 1) subject to the tax in question, and 2) not exempted from that tax. The case refers to the Netherlands Fiscal Investment Institutions, which are subject to corporate income tax in the Netherlands at a zero-rate conditioned to profit distribution to the shareholders. According to the ECJ interpretation, those cases where the company subject to the tax is not effectively obliged to pay it are excluded from the Directive scope. EPRA has reviewed the ECJ judgment and is currently considering its potential positive implications on further EU legislation.

Appetite for listed from Asia

The most popular form of listed real estate investment company is the real estate investment trust (REIT). It serves as an efficient tool to utilise large volumes of capital for all types of infrastructural investment. They help mitigate local government debt risks, improve capital efficiency, create long-term investment vehicles and enhance the efficiency of the whole capital market. These investment vehicles are open to the general public, allowing everyone to share the country’s economic growth. Today, over 30 countries in the world have a REIT regime. It usually takes advanced economies approximately a decade to develop an effective REIT regime. In China, one of the world’s largest real estate markets, financial regulators and the industry started research and preparations a little over ten years ago. Participants of the European REITs Policy and Practices International Forum in Beijing heard that the time is opportune. EPRA is actively involved in the education process in China, as the European example with its different countries, regimes and stock exchanges is a great illustration of how this can work in practice. The first trip of the European Index top three took place in late March, when Unibail-Rodamco, Vonovia and Klépierre visited Shanghai, Beijing and Shenzen for the seminar and a series of one-on-one meetings. Two more EPRA members' visits to Asia have been planned for this year in June and December. 

RE-think real estate – registration open!

Registrations are open for the event to be listed in – EPRA Annual Conference! Our speakers line-up include Hoover Institute, Stanford Professor Niall Ferguson, the Executive Director at Singularity University Salim Ismail, MIT Economics Professor William Wheaton and former UK Deputy Prime Minister Rt. Hon. Nick Clegg MP. Do not forget to join the conversation on Twitter #EPRAconf. We are grateful to all our early sponsors for their support: Unibail-Rodamco, Affine, TLG, Credit Suisse, Green Street Advisors, Cofinimmo, CA Immo, Hispania, PSP Swiss Property, RealFoundations and JLL. Want to be in the sponsorship spotlight? Contact us here.
EPRA is the European Public Real Estate Association 

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