Legal regulations concerning REITs (Real Estate Investment Trusts) have already been introduced in over 40 countries around the world, including all G7 countries. At the PINK 2024 Conference, experts underscored that despite various legal systems, all these jurisdictions have implemented REITs, achieving success at different levels. This confirms the adaptability of this investment model to local legal conditions. However, we are still waiting for the introduction of REIT regulations in Poland.
REITs historically originated in the United States, and countries such as Australia and Singapore stand out as jurisdictions where this investment model is particularly dynamic. More than 900 REITs operate globally. In Poland, it’s another attempt to enact REIT legislation.
“There have been some common elements up until now in the planned Polish REITs – we always said that it must be a publicly traded company, and the share capital should be at a high level. Depending on the project, we were talking about 50-60 million zlotys. Now, in the new assumptions, there is an amount of 100 million zlotys,” said Mateusz Baran, a partner at CRIDO.
Experts believe that introducing REITs in the Polish market should be preceded by a transition period, similar to those used in other countries such as the UK. In Europe, Real Estate Investment Trusts are present in 13 countries.
“The REIT as an instrument should be worked out in many legislative frameworks, taking into account the experiences gained in European markets. An important aspect is also that investments are concentrated on high-quality products. It is important that monitoring and supervision are conducted in the first years of existence of the new legislation, which we firmly believe in. Changes will be made if necessary. The aim is to introduce a law that is appropriate for Polish conditions,” said Małgorzata Kosińska, president of the Management Board of the REIT Association.
“The financial regulator plays a significant role when building REITs and its supervisory policy towards the capital market, especially in relation to products targeted at individual investors. Individual investors are particularly protected under both national and European regulations. It would be useful to introduce a review mechanism that would allow for an evaluation of the product’s effectiveness a few years after the law’s enactment.,” explained Łukasz Walczyna, counsel A&O Shearman.
Experts point out that legislation concerning REITs should be open and transparent, allowing wide participation in the discussion. Once the REIT institution is established, the regulator responsible for its supervision should communicate openly with the market, clarifying any doubts and publishing interpretations of regulations.
Adrian Zwoliński, director of the Financial Market and Corporate Law Department at Confederation Lewiatan, said, “There is only one chance to successfully, safely and properly introduce REITs to the Polish market because the trust of individual investors is crucial.
REITs have the potential to bring numerous benefits, both for savers and for the professionalisation of the real estate market, as well as for businesses themselves. However, experts emphasize that a broad and effective information campaign on REITs will play a key role in their successful implementation. Along with a well-regulated market, a large part of the success of REITs will depend on the scale and effectiveness of this information campaign.
According to the experts, a review mechanism is a valuable proposal that, although rarely used in the Polish legal system, is widely used at the EU law level. Moreover, the stock market plays a crucial role in the creation of REITs and the introduction of this product to the Polish financial market, as indicated by experts.
Professionals believe that the current moment is particularly favourable for introducing REITs to the Polish capital market. Key to this process is support from authorities. This financial instrument will significantly contribute to the development of both the real estate market in Poland and the entire capital market.
Source: https://managerplus.pl/reit-y-a-polskie-prawo-jakie-zmiany-sa-konieczne-38536
