What prompted the creation of EPRA, and why was it deemed crucial to establish a public real estate association?

EPRA was conceived to address investors’ need for a real estate index series, allowing them to gauge fund performance against a benchmark. Today, alongside FTSE Russell and Nareit, we manage the “FTSE EPRA Nareit Real Estate Index Series,” the world’s most utilized real estate index. We offer fundamental research, vital for showcasing European listed real estate sector benefits versus other assets. Our financial and sustainability metrics are standard in annual reports, serving as “best practice recommendations.”

EPRA primarily comprises Western European members; why is there limited representation from Central and Eastern Europe (CEE)?

Though we’d welcome more CEE members, the limited representation is due to a scarcity of listed real estate companies in these markets. We aim to foster growth by developing appropriate REIT regimes, encouraging private entities to enter public markets. REITs and the listed real estate sector significantly contribute to local economies by generating employment, urban development, community investments, and substantial tax revenues.

What’s impeding the implementation of a REIT regime in Poland specifically?

Poland’s substantial real estate sector lacks a REIT regime due to pending political approval. The absence of this framework is surprising given the market’s size, but we remain optimistic about its future implementation.

How does EPRA engage with relevant entities for lobbying purposes? Is it challenging to establish dialogue?

We operate at both local and European levels, collaborating closely with local associations, National Banks, Ministries of Finance, and maintaining proximity to the EU Commission and Parliament. Our successful lobbying efforts led to revising the “Solvency II” regulation, facilitating insurance companies’ investments in the listed real estate sector. This achievement reduces the capital requirements for investments, potentially doubling the sector’s size with assets worth EUR 12 trillion.

Amidst the COVID-19 crisis, what are the critical issues on EPRA’s agenda?

The pandemic triggered a liquidity crisis, impacting various sectors differently across countries. The UK’s moratorium on commercial tenant evictions has changed the nature of future lease contracts, with tenants seeking more flexibility. Investor behavior has shifted to a more risk-averse stance, observing and learning from peers.

Have you observed any changes in investor behavior since the pandemic began?

Investors have adopted a “risk-off” approach, displaying patience and vigilance, and demonstrating a preference for group discussions over one-on-one meetings. Real estate investment volumes have significantly dropped except for logistics and residential sectors, showing investors’ cautiousness and temporary calm.

What’s your forecast for European markets in the next 1-2 years?

Despite an impending European recession, recovery predictions suggest a return to pre-crisis levels by the second quarter of 2022, unlike the longer recovery period from the Global Financial Crisis. Although short-term caution is warranted, Europe holds greater growth potential than elsewhere, particularly in CEE, where we’re committed to offering support and expertise for advancement.

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