The PRWIRE Press Releases https:// 2019-03-26T23:49:31Z CCIV proposals still fall short for unlisted property funds: PFA 2019-03-26T23:49:31Z cciv-proposals-still-fall-short-for-unlisted-property-funds-pfa The government’s proposed new Corporate Collective Investment Vehicle (CCIV)* bill is unlikely to be taken up in earnest by unlisted property funds due to several restrictions and compliance demands, according to the peak body representing the $125 billion unlisted wholesale and retail property funds sector, Property Funds Association (PFA).  The CCIV introduces a new investment structure as an alternative to Managed Investment Schemes (MIS), acting more as a hybrid between a MIS and a company.  Paul Healy, CEO of the PFA, says the CCIV is an opportunity to promote investment in Australia’s property fund industry but several requirements including tax treatments could hold it back. “PFA is hopeful the tax treatment can be addressed so it mirrors that of other current Australian managed investment vehicles.”  Mr Healy said the CCIV may also be more attractive to unlisted property funds if the regulations did not restrict listing a CCIV. “We would hope CCIVs could operate under the same regulations as listed investment trusts, as there may be times when an unlisted entity may choose to list.  “Under current proposals this would be restricted, which may diminish the commercial appeal of the CCIV structure.” Mr Healy said an expected increase in compliance may also keep property funds away. “The current proposals include compliance obligations on wholesale CCIVs which do not apply to wholesale managed investment schemes. “These obligations include requirements around registration with ASIC, lodging a constitution with ASIC, and rules around member meetings.  “The additional compliance burden makes operating a wholesale CCIV less attractive than operating a wholesale managed investment scheme.”  Rules prohibiting common ownership of assets between sub-funds may also be a problem for property funds. “PFA sees no valid policy rationale for this, where adequate records are kept and conflicts are managed in the manner usual for managed investment schemes run by the same responsible entity.”   *Treasury Laws Amendment (Corporate Collective Investment Vehicle) Bill 2018 (Bill) Build to rent a missing link in Australian property: PFA 2018-06-20T00:55:15Z build-to-rent-a-missing-link-in-australian-property-pfa Build to rent is a ‘missing link’ in Australian property with potential to provide strong investment opportunities and introduce more affordable accommodation, according to Property Funds Association (PFA), Australia’s peak body representing the unlisted retail and wholesale property funds sector. Paul Healy, CEO of PFA, says PFA welcomes recent discussion on build to rent, which is purpose-built rental accommodation that is institutionally owned and operated. “Build to rent is a missing link both in terms of providing badly needed affordable housing in our capital cities, and in providing a way for institutional investors to invest in residential property in Australia.” Mr Healy says the PFA agrees with the view that build to rent will struggle to grow without changes to the tax treatments around such projects. “Current tax structures appear to be working against the sector. Tax treatments around Managed Investment Trusts is one issue, along with other taxes including land tax, GST and stamp duty.” Mr Healy said institutional investors including superannuation funds have long expressed an interest to invest in Australian residential property but it has proved elusive in a market dominated by ‘build to sell’ property. “The attraction for investors in build to rent is diversification and accessing a viable long-term defensive income stream.” Build to rent is the USA’s largest property investment sector, and is spreading throughout Europe. Mr Healy said the UK’s experience is worth noting, as it only introduced build to rent housing in 2010 following political pressure to address accommodation shortages. Research from Ernst & Young shows Australia faces similar pressures on rental accommodation with millennials (people aged 16-35) and Generation Z (16 and under) together comprising approximately 48% of the population. EY says millennials comprise the largest proportion of our population, and Australia will experience a shortage of residential accommodation as more millennials enter the rental market. “The UK has added close to 100 thousand dwellings via build-to-rent since 2010, which shows how significant this asset class could eventually become.” While build to rent is barely on the radar here, Australian organisations are participating in build to rent project overseas: The REST Superannuation Fund reportedly has 3,000 build-to-rent apartments in the USA, operated by Greystar; and Lendlease is reported to be constructing hundreds of build to rent apartments in both London and the USA. “The local property industry would greatly benefit if these same organisations were also involved in build to rent here in Australia.” About Property Funds Association The Property Funds Association of Australia is the peak body representing the Australian unlisted wholesale and retail property funds sector, currently worth more than $125 billion. As the professional association for Australian Financial Services Licensed (AFSL) property fund managers, their advisors, consultants and representatives, we support and promote investment into unlisted property trusts, funds and syndicates, and assist members in developing and operating their businesses. Visit: www.propertyfunds.org.au For more information please contact: David Manallack Manallack PR Phone: 0407 334 938 Email: david@manallack.com.au