The success story of Spanish Reits (SOCIMI) continues. Spain's success model for private equity investors and family offices in the real estate market

The success story of Spanish Reits (SOCIMI) began during the financial and economic crisis in 2009.

The Spanish government wanted to make the distressed Spanish real estate market attractive for foreign investors by creating a new type of corporate entity.

This did not succeed immediately, but only in 2012, when a reform of the SOCIMI regulations granted investors significant tax advantages.

Since then, Spain has been experiencing a real SOCIMI boom. Almost 30 billion euros have since been invested in the Spanish property market using the SOCIMI structure. Many of these investments have been made by restructuring existing real estate investments into the SOCIMI regime.

SOCIMIs are structurally Spanish listed public companies (Sociedad Anónima Cotizada de Inversión den el Mercado Inmobiliario).

The minimum investment (Share capital) in SOCIMIs is only 5 million euros. This makes the SOCIMI also interesting for family offices and smaller private equity companies.

SOCIMI can be listed not only on the four Spanish stock exchanges, but also via alternative platforms such as the Mercado Alternativo Bursátil (MAB). This enables a less complex and therefore more cost-effective listing of SOCIMIs.

80% of the SOCIMI share capital must be invested either (1) in the purchase or development of leased real estate assets or (2) in the purchase of shares in an existing SOCIMI investment company.

There are legal requirements regarding the level of distribution of profits from leasing or the sale or transfer of SOCIMI assets. However, due to the special SOCIMI tax regulations, almost no taxes are payable by the SOCIMI shareholders.