Years have passed since the commencement of work on the act regulating REIT/FINN entities.
REITs (Real Estate Investment Trusts) / FINNs (Polish rental investment companies) are special purpose companies or investment funds established to invest in the rental real estate market.
This solution, present in the world since the 1960s, operates in approximately 40 countries around the world, including several in Europe. The purpose of REIT entities is to enable investors (primarily individual investors) to invest in the real estate market. REITs operate based on regulations in force in a given country.
The characteristic features of REITs include:
- annual dividend payment of at least PLN 80% of profit,
- taking advantage of tax preferences, and
- the requirement of being listed on a stock exchange, as practiced in many countries.
Work on the act regulating REIT entities (in Poland known as FINN – companies investing in real estate rentals) started in 2016. In August 2016, the REIT Association was registered to support work on the Act.
The first draft of the bill regulating REITs was published on October 14, 2016, and the next version of the bill on October 27, 2017. The third version of the bill was made available on April 27, 2018.
The latest bill differed significantly from previous ones – it did not provide for the possibility of investing in commercial real estate, but only in residential real estate. The bill was submitted to the Sejm – the first reading took place on October 2, 2018.
In the following years, work on the regulation of REITs was suspended – The work on the project started in the Sejm was interrupted due to the end of the term.
The concept of introducing REITs in Poland was supported in 2019 by the Minister of Entrepreneurship and Technology (later Minister of Development) – Jadwiga Emilewicz, however, no new draft law was prepared.
At the beginning of 2021, an Inter-ministerial Team for REITs was established, chaired by Anna Kornecka, Deputy Minister of Development, Labor, and Technology. Consultative meetings were held with industry organizations and business representatives, including the PINK Association, the REIT Association, Lewiatan, and RDS.
On February 23, 2021, the REIT Association and the PINK Association signed a cooperation agreement aimed at promoting and popularizing information about REITs in the public space, as well as supporting possible legislative work.
On April 19, 2021 year. REIT and PINK associations sent a letter to Deputy Minister Anna Kornecka in which the assumptions on the basis of which the draft law on FIN should be prepared were presented.
Representatives from both associations were appointed to the Inter-Ministerial REIT Committee as external advisors. The Committee held its first meeting on July 26, 2021.
After the dismissal of Deputy Minister Anna Kornecka from the position – based on Order No. 286 of the Prime Minister of December 1, 2021. amending the order regarding the Inter-ministerial Team for the development of regulations regarding entities investing in real estate rental – further work on REITs was entrusted to the Ministry of Finance. The person theoretically responsible for work on REITs was Deputy Minister Piotr Patkowski, however, no work was undertaken.
Following the change of government, the real estate market is awaiting the commencement of work on the REIT Act. We expect the Ministry of Finance to lead the work and are very hopeful that it will begin soon. The Minister of Finance's statements, particularly in his introduction to the panel at the recent Meeting of Real Estate Industry Leaders organized by the Rzeczpospolita daily on February 28, 2024, and in his interview with Puls Biznesu on March 11, 2024, are encouraging.
On the day April 3, 2024. Deputy Minister of Development and Technology, Jacek Tomczak, organized a meeting to which representatives of the construction and real estate industry, in particular industry organizations, including PINK, were invited. At the meeting, the ministry presented preliminary assumptions for REIT regulation, the opinion was expressed that this is an important topic that will be continued shortly. The presentation given at the meeting is available here.
On April 10, 2024, PINK organized a conference – "REIT, if not now, then when"„, whose partners included Polish and international industry organizations: the European Public Real Estate Association (EPRA), the Real Estate Committee of the Polish Chamber of Commerce (KIG), the Lewiatan Confederation, the Polish Council of Shopping Centers (PRCH), the Polish Green Building Council (PLGBC), the Polish Association of Developers (PZFD), the REIT Poland Association, the Royal Institution of Chartered Surveyors (RICS), and the Urban Land Institute (ULI Poland). Representatives from the Ministry of Finance and the Ministry of Investment and Technology (MRiT) also participated in the conference as speakers. The broad support from many organizations demonstrates the importance of the topic to the industry. Over 150 people attended the conference.
On the day May 22, 2024. took place myself round table about REITs as part of the CEE Summit, whose partner was PINK along with Association REIT Poland and ULI. Participation they took in it EPRA representatives, Stock exchanges, Segro and companies from industry.
You can access publications on REITs by entering the term "REIT" in the search engine on our website.