Societes d'investissements immobiliers cotees -- SIICs
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French REITs are known as les societes d'investissements immobilier cotees, or SIIC. They became a legal investment vehicle in France with publication of an executive order dated July 12, 2003. The French government wanted to compete with Belgium, Dutch and German funds.
SIIC rules are slightly different than those for U.S. real estate investment trusts.
French REIT or SIIC Pay Out 85% Not 90%
French SIICs are exempt from taxes so long as they pay out 85% of their recurring income. Unlike the United States REIT law, they are exempt from taxes on the up to 15% of their income that they do not distribute.
They must pay out 50% of their capital gains within two years, but do not pay taxes on the remaining 50% of capital gains.
Therefore, SIIC (REIT) investors don't receive quite as much cash flow. They cannot have more than 60% of their stock owned by one shareholder or group of shareholders acting in concert.
These French Real Estate Investment Trusts must be listed in France on Paris Stock Exchange. However, according to recent law a real estate company can be listed on any qualifying stock exchange, so there is no longer any requirement for foreign companies to set up French affiliates.
They cannot be privately owned. And they must have capital of at least 15 million euros.
Also, they may not provide services.
French SIIC qualifying activities are:
- Purchase or development of a building with intent to lease
- Participation in corporate subsidiaries engaged in the purchase or development of buildings with intent to leasing them
Nonqualifying activities are subject to full, ordinary taxes.
Their properties must be in France. However, they are not subject to any formal gearing requirements, limiting their percentage of balance sheet debt.
Effective January 1, 2009 one shareholder cannot own more than 60% of one SIIC.
French SIICs Popular and Successful
And they must have a free float of at least 15%.
French real estate companies companies that convert to the SIIC structure have to pay a 16.5% tax on their unrealized capital gains.
Paris is Europe's biggest office building market. providing a lot of opportunities to French REITs.
SIICs must withhold 25% of distributions to foreign shareholders, but many tax treaties reduce this to 15%.
The professional group representing the SSICs or French REITs is Federation des Societes Immobilieres et Foncieres (FSIF). Jean-Paul Dumortier is chairman.
- ADT SIIC -- owns 3 buildings in Paris
- Affine -- owns nearly 100 properties in France, Belgium and Germany.
- AffiParis -- owns some buildings in Paris.
- Alliance Développement Capital SIIC -- owns 5 buildings in France
- Altarea -- mixture of many kinds of properties, including hotels.
- Eurosic -- new, green office buildings in Paris.
- Fonciere des Logements -- owns tens of thousands of houses in France and Germany.
- Fonciere Atland -- uses sale-leaseback techniques to acquire property
- Fonciere Inea -- 100 properties across France
- Fonciere Massena -- owns several hundred varied types of properties in France
- Fonciere des Murs -- own hundreds of properties.
- Fonciere Paris France -- office buildings and industrial properties in the greater Paris region.
- Frey -- retail parks around France.
- Gecina Group -- largest, office and retail
- ICADE -- a variety of commercial real estate throughout France
- Immobiliere Dessault -- 10 properties in Paris
- Klepierre -- many shopping centers in thirteen European countries.
- Mercialys -- shopping centers throughout France.
- Paref Paris Realty Fund -- owns many properties in and around Paris.
- SIIC de Paris -- -- owns buildings in and around Paris France
- Silic -- offices and business parks in Paris area.
- Societe de la Tour Eiffel -- owns many office buildings, warehouses and light industrial parks in France
- Fonciere des Regions -- owns many properties throughout much of Europe.
- Societe Fonciere Lyonnaise -- office buildings in Paris Business District
- Unibail-Rodamco -- The largest REIT/SIIC in Europe
- Zublin Immobiliere France -- owns 8 office buildings, 6 in Paris.
- Acanthe Developpement -- office buildings in Paris.
- Argan Fonciere en Immobilier Logistique -- custom designs and builds warehouses.
- CeGeREAL -- premium office properties.
Therefore, les Societes d'investissements immobilier cotees (SIIC) are a great way to profit from economic activity in France. They're French Real Estate Investment Trusts or REITs.
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