View this email in your browser
I was fortunate enough to be at NAREIT’s REITWorld in Phoenix, Arizona in mid-November and so directly experienced the aftermath of the U.S. presidential election result earthquake. Whatever you think about Donald Trump’s victory, it is likely that the existing global political and economic order is going to see strong challenges next year. In Europe, after the shock of the Brexit vote and yesterday’s Italian and Austrian votes, we are now facing general elections in France, Germany, and the Netherlands, any of which could result in a change to the existing political order in Europe.
Looking back at 2016 we have seen lower growth and Continental Europe, at +0.35% total returns year-to-date, strongly outperforming the UK at -25.4%. But you have to remember that REITs are first and foremost an income story and with dividend yields broadly similar at about 3.8%/3.7% respectively for both areas, the UK market will remain very attractive for investors.
EPRA’s current priority is to focus on those markets which have not yet adopted REIT regimes. To this end, EPRA was in Warsaw in late-November with a strong team of REIT experts to brief the Polish market on the best approaches to take in getting their own listed industry established on a solid base. I would like to warmly thank Unibail-Rodamco, PGGM, PwC, the French property association FSIF and law firm De Gaulle Fleurance & Associés, for taking the time to present with us in Warsaw.

Philip Charls

A new REIT legislation for Poland?

As reported in the last brief, the Polish government has recently published a draft REIT legislation. According to the draft, a public company with a registered office in Poland, whose business activity includes mainly the lease of commercial real estate shall be granted a REIT status. The latter would allow for exemption from tax on income derived from inter alia lease of real estate, sale of real estate as well as from dividends received from qualified subsidiaries. It should be noted that the term ‘real estate’ shall exclude residential buildings and dwellings. There are certain statutory requirements that must be met for the status to be granted, and while some seem to provide a solid framework for a Polish REIT regime, other points would need improvement. The new regulation has an ambitious schedule of coming into force on 1 January 2017. We will continue the dialogue with our Polish counterparts and contacts and monitor all the developments closely. The chance of having a REIT regime in Poland is close and what we have seen so far could be a first step towards a successful regime. Learn more by watching Philip Charls’ video interview. Read more about Polish REITs in the upcoming December edition of the EPRA Industry Newsletter.

Leading by example on sustainability

Representing more than 50% of global wealth, the real estate and built environment sector plays a key role in every aspect of European society, economy and environment. According to a brief by UNEP, and as reported in a factsheet co-signed by EPRA, the scale of investment opportunity in energy efficiency building retrofits is between EUR 205 billion and EUR 266 billion a year by 2020. To better grasp the regulatory developments regarding listed real estate and sustainability EPRA held a successful second edition of its Sustainability Workshop in Brussels in late November. Paul Hodson, Head of the European Commission's energy efficiency unit, Josefina Lindblom from DG Environment and Antoine Begasse from DG FISMA, discussed the European common voluntary certification scheme and the non-financial reporting directive. EPRA encourages disclosure and transparency when it comes to the sector’s environmental impacts and already promotes greater sustainability reporting performance through the EPRA Sustainability Best Practices Recommendations. In the latest survey by GRESB, the global standard for assessing and benchmarking the environmental, social and governance performance of real estate portfolios, European listed companies rose to 65 points in 2016 from 61 in 2015, placing Europe second, behind Australia. In 2016 close to two thirds of the EPRA Developed Europe Index by investable market capitalisation has reported their performance results to GRESB.

EPRA Developed Europe Index growing

Real estate investment trust NewRiver REIT plc specialising in the UK retail sector was accepted for inclusion in the FTSE EPRA/NAREIT Developed Europe Index, raising the total number of its constituents to 101. The EPRA Index is the leading global benchmark and most widely used investment Index for listed real estate. “We welcome NewRiver to the EPRA Europe Index. The inclusion increases the market capitalisation and visibility of both the company and the EPRA Index going forward,” commented Philip Charls, EPRA CEO. Read the full press release.

EPRA members in the top 10 transparent FTSE 100 companies

EPRA members real estate investment trusts Land Securities and British Land placed respectively third and sixth among the top 10 transparent FTSE 100 companies. The quality of financial reporting by European listed real estate companies has recently sharply increased with close to two thirds of companies by market cap in the EPRA Index receiving Gold Awards for achieving the highest levels of transparency and compliance with EPRA Best Practices Recommendations. No less than 46 European companies have achieved our highest Gold standard Award for implementation of the BPRs over the past year, a 44% increase from last year. Read more in the EPRA/Deloitte Annual Report Survey ‘A new rush for Gold’.

Congratulations to Steve Buller

Steven Buller, portfolio manager at Fidelity Investments and member of EPRA Advisory Board, received NAREIT 2016 Industry Achievement Award. The E. Lawrence Miller Award is presented annually to a REIT professional whose dedication has helped heighten awareness and understanding of the value of REITs and publicly traded real estate – we read in NAREIT’s press release. “EPRA stands by NAREIT in its recognition of Steven’s contribution to the success of the REIT sector and is proud to have him on our Board,” commented Philip Charls, EPRA CEO, who attended the Award’s presentation.
EPRA is the European Public Real Estate Association 

Square de Meeûs 23 · 1000 Brussels · Belgium

To unsubscribe please click here. If this email has been forwarded to you and you wish to subscribe to EPRA Monthly Brief, please email us at