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Building a stronger Europe report: Why policymakers should give more attention to the listed property sector

Stock exchange listed property companies play a unique role in delivering, enhancing and operating the built environment. The EPRA Public Affairs team has been working together with all EPRA departments on a report that highlights the unique contributions listed property companies make to the health, vibrancy, efficiency and accessibility of the European property market and the opportunity that growth in this sector can play in building a stronger Europe.

The 30-page document’s short chapters targeted to policymakers cover the sectors’ main benefits and characteristics, ranging from regulation and accountability to transparency, sustainability, liquidity and investment performance.
Many policymakers are, for example, not aware that the sector is governed by a strong regulatory framework of EU legislation, national parliamentary supervision and local financial markets regulators. Nor are they aware that most companies are internally managed by professionals who are directly accountable to the shareholders by way of reporting and performance metrics – supported by the EPRA Best Practices Recommendations for financial and sustainability reporting.
The transparent nature of the public stock markets fosters good decision-making, healthy corporate governance, investor confidence and trust. The listed property sector reduces ‘information–based contagion’, a key contributor to systemic risk, by reducing the likelihood of opaque market bubbles. EPRA research found that the listed market generally leads the direct market by about six months, as REIT liquidity allows for greater pricing transparency and quicker information transfer than less liquid direct markets.
The report also provides political messages that the liquid nature of listed property companies facilitates the ‘democratisation’ of real estate, by providing individual investors with the opportunity to participate alongside larger investors in otherwise inaccessible investment opportunities.
Next to that, it creates a bridge to societal challenges that listed property companies are the leading ‘innovators’ in delivering and operating the built environment, responding actively to the needs of tenants, the communities in which they operate and externalities such as the property sector’s impact on the environment.
With all this, it becomes clear why the sector should be represented more strongly in EU policy-making.
Europe’s listed property companies are the catalyst for almost one million jobs in the EU, as a recent study conducted by PwC for EPRA showed. With that in mind, the report identifies an important opportunity for governments and EU legislators to take proactive steps to deliver policies to strengthen the European listed property sector, so it can deliver to its full potential and thus build a stronger Europe.