Property Funds - Europe

Computer_Beginner

bowlhead99 wrote: »

PAIFs and REITs in the UK are about the same age (2006/7). The status gives tax efficiency advantages. When investing further afield in foreign assets, you may not get the tax efficiency passing all the way through because of whatever taxes are applied locally to the relevant incomes and gains. Bulgaria for example does have REITs too, but might not be listed on a stock exchange that you can access easily from your seat.

Before we had REITs in the UK we just had closed ended companies or investment trusts listed on the stock exchange which were not called REITs, and didn't have the same specific tax advantages that now exist for entities classified as REITs.

Before we had PAIFs in the UK we just had open ended funds (oeics and unit trusts) which were not called PAIFs and didn't have the same specific tax advantages that now exist for entities classified as PAIFs.


Yes. PAIFs are all OEICs, meeting certain conditions, with >60% of the assets and incomes being from property investment (either direct property investment in or out of the UK, or holding shares in REITs in or out of the UK]


In the US they have had REITs listed on the stock exchange since the 60s and also open-ended mutual funds investing into REITs since the 80s. Europeans only started seeing REITs in the 70s (in Netherlands; Belgium was 90s; Germany about same time as UK; Ireland about five years ago).

But REIT as a tax/ regulatory status didn't need to exist, for people to run an investment company in which you could invest which bought and held commercial property.

Thanks very much for that.
It sounds like a lot of the terminology (REIT / PAIF) is to do with tax advantages, but also the closed / open structure of funds.
I know that companies have invested in property for a long time, (in some format) as my house deeds show Pearl Assurance as owning the freehold about 100 years ago!