Belgian REITs to avoid AIFMD

Several real estate investors in Belgium plan to change the legal status of their investment trusts in order to circumvent the pan-European marketing regulation.

The Belgian government has given real estate investment trusts (REITs) a get-out clause for the Alternative Investment Fund Managers Directive (AIFMD).

Currently Belgian REITs have the legal status of Société d’Investissement à Capital Fixe en Immobilier (SICAFI) which falls within the directive’s scope. However, the Belgian government has introduced the Société Immobilière Réglementée (SIR) structure which offers similar benefits to the current SICAFI regime but which treats the REIT as a corporate with a commercial purpose rather than as an investment fund.

“In essence, for the company, it is about positioning itself as a REIT… and to avoid being considered as an alternative investment fund,” said in a statement Belgian real estate firm Cofinimmo, who are asking investors if they can make the switch from SICAFI to SIR. Other Belgain REITs, Befimmo and Montea also signaled their intention to adopt the new status.

As part of the reform, the change to SIR needs to be approved by 80 percent of the REITs shareholders at an extraordinary general meeting and firms have to apply for a license from the Belgian Financial Services and Markets Authority.