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Government allows Real Estate Investment Trusts to operate in Portugal

freeport2Portugal's government finally has given the go-ahead to the creation of Real Estate Investment Trusts (REITs) in Portugal.

The decree-law was approved on Thursday, January 10th, by the Council of Ministers, so does not need to go through Parliament but will head directly to the President of the Republic, Marcelo Rebelo de Sousa, who is unlikely to knock it back.

The new investment product, called SIGI in Portugal - Sociedades de Investimento e Gestão Imobiliária - will boost the real estate market by flooding it with money chasing investment property.

"The legal framework of investment and real estate management companies (SIGIs), set up as a vehicle for promoting investment and boosting the real estate market, in particular the leasing market, has been created," reads a communiqué from the Council of Ministers.

The Government is following an investment trend already established in other European markets and should benefit from the experience of Member States.

SIGIs have been under discussion for the past year. At the Portugal Real Estate Summit held in September 2018, the Deputy Minister, Pedro Siza Vieira, said a draft law should be ready by the year-end.

The creation of a real estate investment trust market in Portugal could reach €15 billion, more than four times the value of commercial real estate investment in 2018.

In an interview with Jornal Economico, Fernando Ferreira, Head of Capital Markets at the real estate consultant, JLL, commented on the government’s approval of the new REITs law,

“Nobody loses with REITs appearing in Portugal. What this will attract is more investment from international investors, who are comfortable with this way of investing in markets such as the Portuguese one. This will allow a greater dynamic to the real estate market, namely in some assets with little liquidity that need have a medium to long-term investor.”

________

A real estate investment trust (REIT) is a company that owns, and in most cases operates, income-producing real estate. REITs own many types of commercial real estate, ranging from office and apartment buildings to warehouses, hospitals, shopping centers, hotels and timberlands. Some REITs engage in financing real estate.

REITs can be publicly traded on major exchanges, public but non-listed, or private.

(Wikipedia)

Comments  

+2 #6 mj1 2019-01-12 21:27
perhaps you may have seen the uk channel 4 series about buying a place in Portugal for 10000 pounds, better investment perhaps than some thing "in trust"
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+3 #5 DouroBill 2019-01-12 18:53
mj1 2019-01-12 14:03
be careful, the stock market in Portugal is not a liquid market and even more so with real estate trusts
My experience is when want to sell you have to wait for the next evaluation of the property in the Trust's portfolio - and that selling price could depend on whether there are more buyers then the price should be higher but if more sellers it will be lower!
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-1 #4 ChrisG 2019-01-12 18:51
Nobody loses, awesome, I missed the part about how it's gonna benefit Mario who earns €600 a month before tax to support his family?
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0 #3 charly 2019-01-12 15:26
Or in other words a brand new (and unknown by the common people) vehicle to generate more and massive funds and profits probably only for "a few clever guys". Therefore they keep it very secretely under the carpet.
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+2 #2 mj1 2019-01-12 14:03
be careful, the stock market in Portugal is not a liquid market and even more so with real estate trusts - even in uk when people want out of real estate trusts they are not allowed as the holder usually says "market forces" and you cannot withdraw.
bit like having a house which you are prevented from selling

if you want to invest in real estate then buy the real product and not some "trust"
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0 #1 Mike Williams 2019-01-12 10:23
Big landowning families will have been holding back developments so it being late; too late, particularly if this investment specialist is right in this latest Zerohedge article. Suggesting a global crash in which, amongst much else like crashing sovereigns (countries), property values halve. Taking Portugal, a small, weak, heavily indebted country, back to its pre-euro currency and property values. A useful heads-up.
https://www.zerohedge.com/news/2019-01-11/scenarios-collapse-world-utterly-unprepared
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