Belgian REITs - Impact of the 2018 reform

The Belgian government has demonstrated its commitment to making the Belgian real estate market more attractive by further developing the regulatory and tax framework applicable to Belgian REITs and introducing a new real estate vehicle, the GVBF/FIIS.

In this newsflash NautaDutilh shares with you certain key elements of the REIT reform.

Key Points of the Belgian REIT reform

- Reform of Belgian REIT legislation by the Act of 22 Octobre 2017 and the Royal Decree of 23 April 2018.

- Key Points:

  1. Increased ability for REITs (GVV/SIR) to enter into partnerships;
  2. Investment possible in new asset classes;
  3. Social REITs: a new type of (non-profit) REIT, subject to light(er) regulation.

1. Enhanced Ability to Create Partnerships

- Under the old rules, it was difficult for REITs to enter into partnerships due to protective measures that discouraged potential partners.

- The new rules provide for greater flexibility. 


Old Rules


New Rules



   Minimum stake in
   other companies


  • REIT had to have a minimum stake of 50% and exercise control
  • All subsidiaries had to have the same statuts (institutional REIT or ordinary company)


  • Minimum stake now 25% + 1 share
  • However, total fair market value of minority stakes cannot exceed
    50% (FMV) of the REIT’s total assets
  • Subsidiaries can be a mix of institutional REITs and ordinary companies


In the event of deadlock with a partner, JV agreement needed to enable the REIT to buy out the partner

Buy-out right is no longer

   Institutional REIT


  • Listed REIT had to hold a minimum 50% stake
  • Co-shareholders in an institutional REIT had to be institutional
  • I-REIT had to have its own organisation


  • Stake of listed REIT can be as
    low as 25%
  • Retail investors can now also be shareholders in an institutional
    REIT (minimum investment of
    EUR 100,000)
  • I-REIT can now rely on the organisation of the listed REIT

      between REITs

Difficult for two REITs to enter
into a partnership (given the prohibition on two REITs jointly controlling the JV)

Prohibition has been lifted: two REITs can now exercise joint
control over a subsidiary

Exit value


  • Sale of asset to JV partner had to
    be at least at fair market value


  • Sale can be below fair market value, if price determination mechanism agreed upfront

2. New Assets Classes for REIT Investments

- A REIT can only invest in asset classes provided for by the REIT legislation

- Until 2018 reform: real estate only

- Since the 2018 reform: new asset classes to encourage infrastructure investment

  • Energy infrastructure:
  • Eligible assets: assets related to the production, storage or distribution of energy or water, water purification, waste disposal facilities
  • PPPs
  • Extended possibility to take part in infrastructure/building-related PPPs
  • Examples: wind farms, tunnels, parking garages, roads, bridges, etc
  • DBM + F, DBFM, DBFMO contracts (D&F only is not possible); concessions and other types of PPPs
  • Not mandatory to have a right in rem
  • Long term projects: services (for which REIT implication is expected) with a term of at least 5 years
  • During initial phase of the project (up to 2 years after construction phase or longer, depending on PPP requirements), stake of the REIT can even be lower than 25%
  • Possible for REITs to grant loans and sureties in relation to such PPPs

- Greater leverage possibilities for these new asset classes

  • Leverage can exceed 65% at SPV level; such leverage is not taken into account to determine the maximum threshold of 65% leverage on a consolidated basis
  • Conditions: investment at SPV level, no exclusive control of the SPV, exposure of listed REIT must be limited (equity investment and debt funding commitment)
  • Prohibition on the provision of mortgages/sureties with a value in excess of 75% of the relevant asset does not apply
  • Conditions: investment at SPV level (unlisted REIT level), exposure of listed REIT must be limited (equity investment and debt funding commitment)

3. Social REIT: A New Type of (Non-profit) REIT

- Social REIT: stimulate (public) investment in real estate infrastructure intended for the elderly, disabled people

- Same tax status as a REIT, but lighter regulation

- Should seek a limited profit or no profit

  • REIT to take the form of a cooperative company with a social purpose (à finalité sociale / met sociaal oogmerk)
  • Dividend: max. 6% of nominal value of shares
  • Winding-up: liquidation proceeds allocated to non-profit project (no distribution to shareholders)

- Light regulation:

  • Listing not mandatory
  • Liquidy provided by variable capital (cooperative company); social REIT must set up a liquidity reserve in that respect; redemption at par value (no bonus for exiting shareholder – return only through dividends)
  • Can opt for Belgian GAAP (IFRS not required)

- Restrictions

  • Narrow definition of real estate as an asset class
  • No subsidiaries
  • Leverage: max. 33% (instead of 65%)
  • Retail shareholders: max. investment of EUR 20,000/investor (alternatively, investment of at least EUR 100,000)

Zie ook : NautaDutilh ( Mr. Didier De Vliegher ,  Mr. Nicolas de Crombrugghe ,  Mrs. Philippine De Wolf )


Mr. Didier De Vliegher Mr. Didier De Vliegher
Mr. Nicolas de Crombrugghe Mr. Nicolas de Crombrugghe
Mrs. Philippine De Wolf Mrs. Philippine De Wolf

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