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Luxembourg moving towards enhanced cooperation in taxation and exchange of information
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Luxembourg draft law proposes unconditional deferral of exit taxes
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2013 EMEIA Real Estate and Hotels Workshops
300 delegates listen to Ernst & Young professionals and industry leaders share their views and market insights on the challenges ahead. Read our report.
Flocking to Europe: non-performing loan report
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The Luxembourg Financial Connection, Issue 19
The Luxembourg Financial Connection is Ernst & Young’s newsletter on regulatory, leading practice and market developments in the financial services industry from a Luxembourg perspective.

Real Estate

Building your business future

Today’s real estate industry must adopt new approaches to address regulatory requirements and financial risks, whilst meeting the challenges of the current economic environment and achieving sustainable growth.

Luxembourg has emerged as the leading domicile in Europe for vehicles investing directly in internationally diversified real estate portfolios. Key factors behind Luxembourg’s success include the flexible legal and fiscal environment, the ability to structure cross-border investment strategies and investors’ desire to diversify their portfolios.

Our real estate practice has the ability to mobilize a team of seasoned professionals to address complex and demanding challenges and provide seamless service on a global basis. We can help move you forward. Are you ready to break ground?

In working with you, we draw on our industry knowledge and insight to help you strategically position yourself – wherever you are in the world. Let us help you better understand some of the key challenges facing the industry, including:

Regulatory and technical accounting changes

Major regulatory and technical accounting changes are occurring in the US, Europe and other geographies, which has created a challenging environment for real estate. These include the Dodd-Frank Act, the Alternative Investment Fund Managers Directive (AIFMD) and proposed accounting changes for leases and revenue recognition from the Financial Accounting Standards Board and International Accounting Standards Board.

We are committed to helping our clients understand how to approach these changes. We advise funds on SEC examinations and help them assess, design and implement compliance programs.

Effectively navigating the sophisticated marketing regime required by the AIFMD will be a key challenge and could lead to a competitive advantage for alternative investment groups.We are committed to helping our clients achieve full compliance and to provide them with the ongoing support they need.

In addition to overall market regulation, there are continuous developments in reporting standards and market best practice such as INREV guidelines. For instance, considering the potential implication charges in leasing and revenue recognition rules early has become a critical issue.

Related materials:

Real estate private equity

The recession, financial crisis and downsizing in the credit market have all impacted real estate private equity funds over the past several years. Given the ongoing challenging environment, it is more important than ever to understand the trends affecting the sector so you can respond effectively.

Key trends include:

Distressed deal opportunities will continue and convergence of the bid-ask spread will foster greater deal volumes.
Due to regulatory and financial reporting changes, the fund operating models will change over the medium to long term.
Overall, fund terms have significantly evolved since the financial crisis, and many real estate fund managers have had to make concessions to attract investors and win back their confidence.
Investors are now more focused on scrutinizing the real estate fund platforms where they are placing capital. More information will be needed to meet investors’ reporting requirements.

Related materials: