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EPRA Monthly Brief
October 2017
EPRA’s membership is continuously growing and I would like to welcome Ascencio, Deutsche Konsum REIT, and Sirius Real Estate Limited on board to our Association.
 
Working for our members is at the forefront of EPRA’s mission, and we welcome every opportunity to further promote with our members the European listed real estate sector. To this end, last month I travelled with the different teams to Munich, London, Manchester, Stockholm, Paris, Madrid, Barcelona and Milan. In Germany, I attended EXPO Real with the regulatory team, while in Spain I presented the benefits of the listed sector at an event organised by the newspaper El Confidencial and moderated a panel with the top three SOCIMIS at the Barcelona Meeting Point. In the UK, we took part in various investor roundtables and in Sweden discussed the companies’ take up of the EPRA Best Practices Recommendations (BPR).
 
Following the publication of the financial and sustainability BPR last month, the EPRA team has prepared individual feedback forms to each company on their specific performance against the metrics. I believe they will guide our members through the process of reaching ever-better results next year. The team has set up various meetings in Europe in the coming weeks to follow-up on the feedback before the 2018 reporting season.
 
I encourage you to read more about the EPRA activities in the body of this email as we have an exciting line-up of events prepared for you.
 
Finally, I would like to remind you that you have less than a month to submit your entries for the 2018 research proposals. You can find out more about the recent EPRA research projects in the Research Digest.
 
Dominique Moerenhout, EPRA CEO
EPRA news

The 2017 Nick Tyrrell Research Prize

 
“Decomposing the value effects of sustainable real estate investment: international evidence” paper written by Dr Avis Devine of the Schulich School of Business at York University and Dr Erkan Yonder of Ozyegin University, won the 2017 Nick Tyrrell Research Prize. Established in 2011 by IPF, INREV and SPR, the award recognizes innovative and high-quality research in the field of real estate investments. The findings in the research paper suggest that environmental reporting requirements may facilitate improvements in the environmental performance of properties and enhance transparency, we can read in the press release. The paper develops earlier work, which was sponsored by EPRA. You can read about the latest industry relevant publications in the second edition of the EPRA Research Digest. EPRA has launched the 2018 invitation for research proposals open to both academic researchers and market practitioners. The deadline for receipt of submissions is 23:59 CET on November, 20.

Listed real estate should be part of the EU dialogue on sustainable finance

 
As part of the Capital Markets Union, the European Commission will adopt an action plan/blueprint in Q1 2018 with a concrete set of short, medium and long-term actions to follow-up on the recommendations of the High Level Expert Group (HLG) on Sustainable Finance, chaired by AXA. In September, EPRA responded to the HLG’s questionnaire process and demonstrated the crucial role investments in real estate have in ensuring a low-carbon and resource-efficient European economy. This is clearly important as buildings are responsible for around 40% of energy consumption in Europe. Currently, the EU is not on track to deliver the EUR 11.2 trillion required to meet its 2030 energy policy targets. The latest estimates put the annual investment gap at around EUR 177 billion between 2021 and 2030, totaling EUR 1.77 trillion. The biggest gap relates to investment in energy efficiency in buildings (74%), as highlighted in the HLG Interim Report. It is therefore essential to make energy efficient buildings in Europe the top priority, including its financing through financial markets on which EPRA would be happy to share its expertise. Full EPRA response to the questionnaire is available here.

New Dutch government aims at Europe's oldest REIT regime

 
Earlier this month, the new Dutch government outlined the agenda for its mandate. The 54-page coalition agreement includes provisions for the abolishment of the Dutch ‘fiscal investment companies’ (so-called FBI regime) for directly held real estate due to the planned removal of the dividend tax starting in 2020. The market reacted with surprise but also with caution and following a discussion with our regulatory committee and representatives of the local FBI association, we believe that there is an opportunity to get a better REIT regime, similar to the ones in the neighbouring countries. The Dutch association members will now calculate the potential tax burden and then start to work on a plan to provide the government with a blueprint for a good REIT regime to which EPRA and its experts will feed in. Find out more about the Dutch REIT regime in the EPRA Global REIT Survey 2017.

Where do real estate equities fit in the broader market?

 
Each quarter EPRA compiles a report on activity in the listed property sector in Europe. It includes useful data on the size and scale of the sector as well as the corporate activity of the past quarter. At the end of the third quarter of 2017 the value of the total listed real estate sector in Developed Europe was USD 467bn, with the largest markets being the United Kingdom (USD 100bn), France (USD 93bn), and Germany (USD 88bn). The IPO activities in Europe were concentrated in the United Kingdom, where a total of five IPO’s collected almost EUR 750 million. The report now includes data from 76 countries across the globe, with a total estimated Commercial Real Estate value of USD 29 trillion. The biggest REIT market remains the US with a market value of over USD 1 trillion, followed by Australia and Japan (both over USD 100 billion). In Europe the biggest REIT markets are France (USD 87 billion) and the United Kingdom (USD 73 billion). With the recent developments in creating REIT regimes in other countries in Europe, EPRA expects the global listed real estate market to continue to grow in the future, offering a broader range of opportunities to investors. For more information download the EPRA 2017-Q3 Total Markets Table.

EPRA activities highlights

 
Discover our varied events’ programme covering some of the most important topics facing the sector:
  • With less than 70 days left until the entry into force of the MiFID II legislation, find out what the impact will be on your company. Register here to secure your place for the EPRA/CMS lunchtime seminar in London.
  • The EPRA Nordic Investor event will gather the CEOs from three of the leading Swedish listed real estate companies to discuss the increasing interest in capturing the strong returns from the Nordic real estate market. More information.
  • Join us for our annual Sustainability Workshop and discuss ESG disclosure, green bonds and the future of a sustainable European economy.
  • Deloitte Spain will host an EPRA BPR workshop in Madrid to discuss the sector and the annual Deloitte/EPRA Survey.
  • In partnership with the BE-REIT Association and Deloitte, we invite you for an open discussion on EPRA’s contribution to the reporting and accounting practices of the European real estate sector. Event open to EPRA and/or BE-REIT members only. More information.
  • In the framework of the EU Invest Week, EPRA is co-organising with partners from the European Real Estate Forum an event in the European Parliament on infrastructure and real estate. The event is by invitation only. More information.
Start 2018 with the right insight! Save the date for the EPRA Insight in London on January 8 and the Insight Amsterdam on January 10.
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