Gareth Lewis, director of finance with the European Public Real Estate Association (EPRA), joined REIT.com for a video interview at REITWise 2013: NAREIT’s Law, Accounting and Finance Conference in La Quinta, Calif.
Lewis discussed European legislation since the financial crisis and some of the issues that the association has been focusing on.
“A lot of the legislation has been sort of clamping down and making sure the sector is more properly regulated than it has been in the past. For REITs and listed property companies, the issue for us is we’ve been caught in the crossfire,” he said
However, Lewis said that more recently European government and regulators are now focusing their attention on economic growth.
“I think the shift puts European REITs in an extremely strong position. Real estate as a whole is a business that is vital to all aspects of a functioning economy, and that’s very much a message we’ve been pushing forward to the regulators,” he said. “For REITs and listed property, we are in an even stronger position, because we as a sector are the ones that act as pioneers.”
According to Lewis, one of the larger issues that EPRA is concerned about is the European Union’s Alternative Investment Fund Managers (AIFM) Directive, a proposed regulation. He said it’s one of the areas where EPRA has to make sure that the government recognizes that REITs are not funds, but operating companies. Lewis said the issue “seems a little bit like a fork in the road.”
“We’re still trying to make sure that the government and regulators recognize us for what we are. Nevertheless, there’s still some uncertainty,” he said.
Lewis also mentioned other issues that EPRA is monitoring, including pension fund regulation.
“In Europe we’re going through a transformation period with pension fund regulation, and that coincides with a shift in Europe from defined benefit schemes to defined contribution schemes,” he said. “In that sense we’re behind the U.S., where defined contribution is much more commonplace.”