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Key regulatory requirements
What are the basic source-of-income requirements for a REIT?
Contrary to classic real estate investment trust (REIT) regimes, Luxembourgian real estate funds are not subject to source-of-income requirements other than the risk diversification rules applicable for reserved alternative investment funds (RAIFs) and specialised investment funds (SIFs) (ie, exemptions, they shall not invest more than 30 per cent of their assets or commitments in securities of the same kind issued by the same issuer).
What are the basic asset composition requirements for a REIT?
Luxembourgian real estate funds are not subject to asset composition requirements other than the risk diversification rules applicable for RAIFs and SIFs only (ie, exemptions, they shall not invest more than 30 per cent of their assets or commitments in securities of the same kind issued by the same issuer).
What are the basic distribution requirements for a REIT?
SIFs, RAIFs and alternative investment funds (AIFs) used in Luxembourg for real estate funds are not subject to distribution requirements.
What happens if a REIT fails to meet the basic regulatory requirements? Is relief available if a company fails to meet any of these requirements?
This question is not relevant, as Luxembourg does not provide for a REIT regime.
What best practices should be considered to ensure compliance with the key regulatory requirements for REITs in your jurisdiction?
Luxembourgian real estate funds should have their central administration in Luxembourg and should generally be able to demonstrate that their board is fit and proper while having sufficient Luxembourg footprint.
Most real estate funds are managed by an external ‘host AIFM’. A Luxembourg AIFM is subject to a thorough authorisation process, which, among others, focuses on the team effectively conducting the business, the shareholder structure, renumeration policies and (sub) delegation arrangements. As the fund initiator generally hires the ‘host AIFM’ and given that authorisation from Luxembourg’s financial regulator (CSSF) and oversight are focused on the Luxembourgian AIFM, the initiator is not directly impacted.
The AIFM is, among others, in charge of the annual reporting process and disclosures to investors.
Are the requirements for a publicly traded REIT raising capital different from those imposed on private REITs or public non-REIT companies?
This question is not relevant, as Luxembourg does not provide for a real estate investment trust (REIT) regime.
What are the ongoing securities and disclosure requirements for publicly traded REITs?
This question is not relevant, as Luxembourg does not provide for a real estate investment trust (REIT) regime.
Do the stock exchanges in your jurisdiction have any special rules that do not apply to unlisted or private REITs?
This question is not relevant, as Luxembourg does not provide for a real estate investment trust (REIT) regime.
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