Bucharest, July 25, 2024. The Association of Real Estate Investors in Romania (AREI) organized a debate on the Importance of the Real Estate Investment Trusts (REITs) regulation in the Romanian legislation, an event attended by representatives of the Government, the Financial Supervisory Authority, and representatives of the most important companies in the real estate sector. The main topics of discussion included an analysis of the current legislative framework proposed for regulation of REITs, exploring the economic benefits, promoting their adoption, addressing investors’ concerns, and highlighting the advantages of investing through the REIT mechanism.

“We aim to foster an open dialog with the most relevant public and private sector stakeholders on the proposed new legislative framework regarding the regime applicable to certain real estate companies, which is currently in the parliamentary debate procedure” said Geo Margescu, AREI Board Member, and CEO & Co-Founder of Forte Partners. AREI has been actively involved in the Senate debates regarding the draft bill, presenting recommendations to improve the bill and contributing with relevant expertise and input from the industry.

 

The event featured a special guest, Tobias Steinmann, Director of Public Affairs, European Public Real Estate Property Association (EPRA),[1] who presented the European perspective on the advantages the REITs in the legislation implementied in other EU Member States, emphasizing that by regulating the REIT mechanism, Romania has a major potential in increasing its attractiveness towards international investors and a real opportunity to align itself with best european practices, which have been enacted already in other EU Member States.

 

During the event organized by AREI, Florin Spătaru, State Advisor in the Prime Minister’s Office, mentioned about the importance of an accurate legislative framework: “These years are extremely important for the development of the construction and the real estate sectors in Romania… We also rely on the market players to help develop the economy through an accurate legislative framework. You will have the support of the executive in the implementation of this legislative package as quickly as possible.”

 

Daniel Fenechiu, PNL Senator, one of the initiators of the legislative proposal on the regulation of REITs in Romania, emphasized the need for a clear political decision: “We have to decide whether we want to stimulate the real estate investment companies by eliminating double taxation, thus giving a necessary boost to economic development. Our proposal is also supported by the relevant economic committees, and we are committed to translate this proposal into a concrete legislative framework.”

 

During the panel discussion, key players and leaders of the Romanian real estate industry emphasized that the adoption of the necessary framework for the implementation of REITs will open the market for a much wider profile of investors. Robert Ioniță, Legal and Government Relations Director, NEPI Rockcastle Group: “There is an openness towards real estate investment in Romania and the adoption of REITs legislation will allow small investors to participate in the development of the real estate sector, benefiting from the investment opportunities offered by this mechanism.”

 

Răzvan Popp, Head of the Transparency and Emission Reporting Service at the Financial Supervisory Authority (ASF), mentioned the challenges and opportunities of integrating REIT legislation into the existing legal framework: “We are trying to manage it as best we can without interfering in the legislator’s area of will, because the legislator gives the directions and sets the criteria, without interfering with the already existing legislation, both at the issuers’ level and the investment funds legislation”.

 

As moderator of the panel, Andrei Burz-Pînzaru, Partner Reff & Asociații, Deloitte Romania, highlighted the challenges related to the implementation of the REITs legislation, emphasizing the importance of clear and stable regulatory framework. He noted that if the regulations are not well designed, companies may be reluctant to adopt the REIT model. “We need to make sure that the tax regime and the listing rules are well thought out and stable to avoid losses related to unforeseen tax changes or to economic cycles. Stability and predictability are essential to encourage capital market participation and the development of this sector,” said Andrei Burz-Pînzaru.

 

The AREI event marked an important step in promoting and developing the opportunities generated by the Romanian real estate market in order to strengthen a secure and attractive investment environment. AREI reaffirms its commitment to maintain the cooperation partnership with the relevant authorities and stakeholders to ensure a coherent legislative framework for REITs, which will benefit the entire economy and enhance Romania’s competitiveness.

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The Association of Real Estate Investors in Romania (AREI) is the only Romanian association in the area of real estate, that brings together the most significant real estate investors, covering the entire spectrum of the industry: residential buildings, office buildings, retail spaces. AREI’s mission is to represent, promote and protect the interests of real estate investors in Romania, with a special focus on enhancing cooperation between relevant authorities and investors, for an effective business operation and mutual benefits.

AREI pursues to become a relevant voice of the Romanian business environment, a discussion and working partner with substantial contribution in the public consultation process. AREI aims to function as a dynamic body, constantly growing and reinventing itself to the requirements of the market and its members. AREI supports relevant partnerships between members and partners of the association, understanding the importance of creating a high working standard to be respected by all those committed to being part of the organization.

 

More details can be foudn here: www.arei.ro

[1] EPRA, the European Public Real Estate Association, is the voice of Europe’s listed real estate – stock exchange quoted property companies, investors and their suppliers. For almost two decades now, as our industry’s voice in Europe EPRA has been committed to building on its successes and working with our members to enhance the future of the European listed real estate sector. More details here: www.epra.com