Abstract
This chapter discusses Spanish REITs, known as SOCIMIs, their structure and characteristics according to the new regulation approved in 2012. The evolution of those real estate indirect vehicles which served as precedents for SOCIMI, such as Real Estate Investment Funds (FIIs for its Spanish initials) and Real Estate Investment Societies (SII, for its Spanish initials), is explained with the aim of highlighting the flow of funds in real estate financing over the last 20 years. The analysis observes the relatively small weight of real estate funds and the effects of the financial crisis on their decline. The chapter notes that in 2012 SOCIMIs show higher liquidity, transparency and fiscal benefits which make them attractive for investors within a framework characterized by rising taxes and lack of capital for real estate. Financial reorganization in Spain could also provide an opportunity for Spanish REITs to increase their role in financing real estate.
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- 1.
The homeownership rate was 89 % according to the 1991 census – the housing rental market consequently being only 11 %.
- 2.
These are the full names of the two Acts and the Ministerial Order mentioned above in Spanish: ‘Ley 20/1998 de 1 de julio de Reforma del Régimen Jurídico y Fiscal de las Instituciones de Inversión Colectiva de naturaleza Inmobiliaria y sobre Cesión de Determinados Derechos de Crédito de la Administración General del Estado’; ‘Ley 35/2003 del 4 de noviembre que regula las Instituciones de Inversión colectiva (IIC)’ and ‘Orden EHA/3064/2008 de 28 de octubre que desarrolla aspectos relativos a los fondos y sociedades de inversión inmobiliaria.’
- 3.
The Spanish initials CNMV stand for ‘Comisión Nacional del Mercado de Valores.’
- 4.
Both series are represented as a weighting of the total outstanding mortgage credits.
- 5.
Property management in Spain has traditionally been a regulated economic activity performed by individual professionals. Only those larger companies which own properties have created rental-management institutions in this market.
- 6.
The Act admits owning foreign company assets unless they are based in tax havens.
- 7.
Circular MAB 2-2013 on the Legal Regime for SOCIMIs. See Corrales and Palacín (2012).
- 8.
- 9.
This section provides the regular classification for all non-debt funds in financial statistics, including real estate investment funds and trusts. It also includes Investment Trusts the patrimony of which represents ca. 85 % of the total section throughout the period. See Bank of Spain, www.bde.es.
- 10.
FIIs are used because to the longer time series that they provide. SIIs are not added to avoid interpretation biases.
- 11.
Santander Banif Inmobiliario reimbursed up to 93 % of the total patrimony; BBVA Propiedad is put into liquidation, as two examples of this process.
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de La Paz, P.T., Cuenca, I.P. (2013). Spanish REITs: The New Regulated SOCIMIs. In: Sotelo, R., McGreal, S. (eds) Real Estate Investment Trusts in Europe. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-36856-1_13
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