Is investing in SOCIMIs (REIT) profitable?

In the current economic climate — and particularly considering the conditions of the real estate market in Spain characterized by the absence of credit and lack of investment liquidity — SOCIMIs have developed as an important tool to boost the market as well as provide and promote access to leasing for citizens. This is particularly true given that leasing is seen as the only viable option for the future due to the difficulties of accessing property and other risks involved.

SOCIMIs (REIT) allow investment in real estate in a professional and diversified manner, with a portfolio ranging from homes to hotels or commercial premises, and with relatively low risk. In this regard, the low risk nature of the business (leasing buildings previously selected by an agent) makes SOCIMIs resemble a fixed income product, but with dividend yield that may reach over 3% (compared to the 0.5% that many bank deposits currently offer).

In addition, the special tax regime for SOCIMIs — with zero taxation under the Corporate Income Tax after certain requirements are met — allows shareholders to maximize their investment.

Similarly, SOCIMIs offers stable profitability to an investor through a mandatory distribution of a significant percentage of dividends and, at the same time, guarantee liquid investments since the stock price in markets such as the MAB allows shareholders to buy and sell securities quickly and at market price, offering shares and obtaining liquidity immediately.

As a result, SOCIMIs may be an investment vehicle of great interest to investors given its stable profitability and liquidity (as a listed company) and especially considering its notable taxation and that Spanish regulations do not differ much from the laws of their environment that make understanding and the chance to seize opportunities.

This article is not considered as legal advice

José María Mesa

With both a Business Administration degree and a Law degree, José María Mesa specializes in company law, civil-commercial contracts and mergers and acquisitions. For any further enquiries please Contact us