PRAWNE UWARUNKOWANIA ROZWOJU FUNDUSZY INWESTYCYJNYCH LOKUJĄCYCH W NIERUCHOMOŚCI
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Date
2002
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Wydział Prawa i Administracji UAM
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LEGAL CONDITIONS OF DEVELOPING INVESTMENT FUNDS WHICH INVEST IN REAL ESTATE
Abstract
In the current conditions one could hardly expect a rapid establishment and development of
investment funds investing in real estate in Poland, not only due to the lack of relevant legal
regulations. Among some further causes there are some technical obstacles in dealing in real
estate as well as an often unclear legal status of real property.
Besides, the high minimal allowed asset value is an additional deterrent. Currently, this
minimal value is 0.5 billion zl for an investment of 30 - 40 million zł. This condition follows the
requirement to maintain an appropriate level of investment diversification in order to reduce the
risks involved. The only specialist closed investment fund that has ever attempted to invest in real
estate in Poland failed to collect even 10% of the amount.
Another obstacle in developing specialist closed investment funds investing in real estate is
also the relatively short time of keeping shares by Polish investment fund shareholders (in Germany
the median of keeping open investment fund shares being 7 years). This can impede selling
off specialist closed investment fund shares and in the case of open funds it also implies the need
to maintain a high share of liquid securities (especially T-bonds) with a view to securing possible
obligations involved in share redemption. This can in consequence reduce the investment return
rate.
When drafting legislation concerning funds investing in real estate (especially open ones) one
should focus in particular upon their investment target. Transparency of the real estate market is
veiy limited, as there is no full information on the deals handled on this market; also, the object of
the deals, i.e. real estate ownership, is atypical. On the market it is dealt in ownership rights,
which are highly individualized and which are priced on the basis of a number of factors, such as
the location, legal and physical condition, or local land development plan, all of which add up to
the individual value of each property. One should therefore consider limiting the investment target
of future open real estate funds only to managing and reaping profits from owned real property
rather than allow speculative transactions, which should be allowed only for specialist closed
investment funds.
Collective real estate investment institutions are an important element of developed capital
markets. It is hard not to appreciate their impact upon the development of real estate market and
due to a relatively low risk involved in investing in this market, such institutions are a significant
long-term saving instrument (especially toward pension). One should hope that the legislator will
soon give a green light to the investments in question not only for smaller investors (for whom
open real estate funds will be available) but also to e.g. open pension funds. Under the current law
open pension funds are banned from investing not only directly in real estate but also in specialist
closed investment fund shares.
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Citation
Ruch Prawniczy, Ekonomiczny i Socjologiczny 64, 2002, z. 4, s. 173-185.