Restructuring of the regulatory framework for Real Estate Investment Companies

I.Introduction

The Real Estate Investment Company (hereinafter referred to as “REICs”) is a closed type Greek limited company which sole purpose is acquiring and managing real estate properties and in general conducting in direct or indirectly investments in real estate, in deposits and in the financial market, under the supervision of the Hellenic Capital Market Commission (hereinafter referred to as “H.C.M.C.”). Legally, its operational framework was governed by the provisions of Articles 21-31 of Law 2778/1999, which are now repealed with the provisions of articles 41-65 of the new law 5193/2025.

The new regulations aim to ensure the proper incorporation of Directive (EU) 2019/878 of the European Parliament and of the Council, of May 20, 2019, amending Directive 2013/36/EU regarding exempted entities, financial holding companies, mixed financial holding companies, remuneration, supervisory measures and powers and capital conservation measures (L 150), to avoid any misinterpretation of the national measures for its incorporation, and to promote legal certainty.

II. New Key Provisions

The new provisions of Articles 41-65 of law 5193/2025 restructures the previous legislative framework, maintaining the basic structure of REICs while introducing substantial changes that allow for greater investment flexibility, increase transparency, and enhance supervisory control. REICs will no longer be limited to leasing properties almost exclusively; under the new framework, they will be able to invest in properties intended for tourism activities (e.g., tourist units, hotel complexes, marinas), as well as commercial parks and data centers. Additionally, they have the right to purchase, construct, and operate electricity generation and storage stations from renewable energy sources, such as photovoltaics. However, their use is restricted exclusively to self-consumption, aimed at meeting the energy needs of the real estate of the REICs, the companies of the group, and their tenants, as well as reducing energy costs.

The new key provisions are as follows:

1. Article 42 - Application and Conditions for Granting an Operating License

The conditions for granting an operating license do not substantially change compared to the existing regime; however, they are codified in this article. The H.C.M.C., as the supervisory authority, monitors the organization, the technical and financial resources of the company, the reliability and experience of the individuals who are to manage it, particularly in the field of real estate investments, and the suitability of individuals who hold a special interest directly or indirectly. The operating license is granted if the conditions of paragraph 3 of the relevant article are met.

2. Article 43 - Share Capital – Equity

For the establishment of the REICs, the minimum amount of paid-up share capital must be forty million (40,000,000) euros, in contrast to the previous regime, which required a minimum share capital of twenty-five million euros (25,000,000). The same amount is required when converting a public limited company into a REIC. Additionally, the equity of the REICs must always be maintained at the aforementioned amount, and the H.C.M.C. may, by its decision, set a deadline for the A.E.E.A.P. to adjust its equity if necessary.

3. Article 46 - Investments of Real Estate Investment Companies

With this new provision, the investment framework of REICs is simplified and modernized; it introduces the right to purchase, construct, and operate electricity generation and storage stations from renewable energy sources, as well as the ability to invest in shares of companies that provide services related to the real estate of REICs. At the same time, the previous restrictions/limits regarding the acquisition of residential and commercial properties are lifted.

Therefore, REICs can invest in:

Real estate located in Greece or in another member state of the European Union and the European Economic Area, or in a third country. However, real estate located in third countries outside the European Union and the European Economic Area cannot exceed 20% of the total investments of REICs group.

Additionally, the REICs may directly or indirectly proceed with the purchase, construction, and exploitation of power generation and storage stations from RES (Renewable Energy Sources), including the construction and exploitation of photovoltaic systems, exclusively for self-consumption purposes, jointly or not, in combination with a storage system (battery).

Directly or indirectly through its subsidiaries and Collective Investment Schemes (UCITS - Collective Investment in Transferable Securities  or AIFs - Alternative Investment Funds) that invest at least 70% in real estate.

Through participation in PPPs (Public-Private Partnerships) in Special Purpose Vehicles (SPVs).

Through participation in Service Provision Companies:

Major participation, meaning at least ten percent (10%), with the simultaneous condition of participation in the Board of Directors with at least one (1) voting member.

Minor participation, meaning up to ten percent (10%), but limited to five percent (5%) of the total investments of REIC group.

With participation of at least twenty percent (20%) in service provision companies that serve the properties of REIC or its subsidiaries.

It is noted that at least 70% of the total portfolio must be invested in eligible investments under the control of the REIC, while no single investment can exceed 1/3 of the portfolio.

4. Article 45 – Financial Statements

The new provision stipulates the obligation to prepare semi-annual and annual (individual and consolidated) financial statements based on the International Financial Reporting Standards, with revaluation of investments by an independent appraiser. They are audited by a certified auditor-accountant and submitted to the Capital Market Commission within the deadlines of articles 4 and 5 of Law 3556/2007 respectively.