German coalition agreement leaves room for residential REITs, but not high priority - sources

The new German government coalition contract, binding over its four-year mandate, contains vague references to Real Estate Investment Trusts but indicates that it will allow residential property as allowable assets - even if the topic is not high priority. To date, German legislation has specifically forbidden residential G-REITs. The former Social Democrat coalition partner of Chancellor Angela Merkel's senior Christian Democratic party claimed tenants would come under undue stress from private-sector owners in the form of listed companies, in particular to facilitate sharp rent rises. The latest contract, concluded in late October, makes only the following comment in regard to G-REITs: "In the case of Real Estate Investment Trusts, it is necessary to abolish superfluous obstacles for the German market, without ignoring the interests of consumers in having protection." (See upcoming PFE/PIE issues for full story)