Definition: Indirect property investment
= Investor establishes a legal entity for the purpose of acquiring one or more properties or acquires participating interests in an existing legal entity which may own one or more properties (also known as a share deal).
Indirect property investment is also defined as the acquisition of participating interests through the main stock exchange or during before hours-trading or Over the Counter (OTC), where the investor is only interested in property shares or indirectly interested in so-called “listed real estate”.
A precise distinction must be made here between:
- (active) property investors that choose indirect property investment for structural or other other reasons, but make decisions or joint decisions on the acquisition, holding and management of the property investment
- (passive) property investors such as public shareholders, institutional investors that do not have any operational involvement in the investment
Participating legal entities
The legal entities
- Property company limited by shares
- Property OEIC
- Property CEIC
- Limited partnership established for collective investment schemes
- Property investment trust
- Housing association
There is no independent legal entity for property funds that are in the form of a contractual investment fund (acquisition of property on behalf of the fund management).
Indirect property investments focus on the following transactions or acts:
- Acquisition of participations
- Safeguarding proprietary interests
- Safeguarding the right to participate in administration, the right to obtain information and the right of verification