Paragraph 3: Undertakings for collective real estate investment

Undertakings for collective real estate investment take the form of either variable-capital real estate investment companies (sociétés de placement à prépondérance immobilière à capital variable) or real estate investment funds (fonds de placement immobilier).

The purpose of undertakings for collective real estate investment is to invest in buildings intended for rental or which they have built exclusively with a view to rental, which they hold directly or indirectly, including those in a future state of completion, to carry out all transactions necessary for their use or resale, to carry out work of any kind on these buildings, in particular transactions relating to their construction,…

I. – The formation, transformation, merger, demerger or liquidation of an undertaking for collective investment in real estate is subject to approval by the Autorité des marchés financiers. The authorisation file, the content of which is set by the general regulations of the Autorité des marchés financiers, describes in particular the investment policy that the undertaking for collective investment in real estate intends to pursue and its financing options, in…

I. – In accordance with the conditions laid down by decree of the Conseil d’Etat, the assets of an undertaking for collective real estate investment are exclusively made up of : 1° Buildings constructed or acquired with a view to rental, as well as furnishings, equipment or movable property allocated to these buildings and necessary for the operation, use or exploitation of the latter by a third party, rights in…

In accordance with the conditions laid down by decree of the Conseil d’Etat, the assets of an undertaking for collective real estate investment are made up of : 1° At least 60% in property assets. In the case of a société de placement à prépondérance immobilière à capital variable, these real estate assets are those mentioned in 1° to 5° of I of article L. 214-36, and the assets mentioned…

An undertaking for collective real estate investment may, subject to the limits and conditions laid down by decree, enter into financial contracts within the meaning of III of article L. 211-1.

An undertaking for collective real estate investment may take out loans up to a limit of 40% of the value of the real estate assets mentioned in 1° to 3° and 5° of I of article L. 214-36. To determine this limit, account is taken of all loans and debts taken out by the undertaking for collective real estate investment, by the companies mentioned in 2° and 3° of the…

An undertaking for collective real estate investment may borrow cash up to a limit of 10% of the value of its assets other than those mentioned in article L. 214-39. The conditions for application of the limit mentioned in the previous paragraph are set by decree in the Conseil d’Etat.

Subject to the limits and conditions laid down by a decree of the Conseil d’Etat, an undertaking for collective investment in real estate may grant, over its assets, the guarantees necessary for the conclusion of contracts relating to its activity, in particular those relating to the implementation of the loans mentioned in articles L. 214-39 and L. 214-40 and those mentioned in article L. 214-38.

Subject to the limits and conditions laid down by decree of the Conseil d’Etat, a real estate investment trust may grant current account advances to the companies mentioned in 2° and 3° of I of article L. 214-36 in which it directly or indirectly holds at least 5% of the share capital.