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    Real Estate Fund

    Over the last decade, many places have encountered a rise in real estate projects and as a matter of fact, even due to the current economic and political uncertainty, real estate keeps attracting capital.

    The constant environment fluctuations, because of technological impact, social, pandemic & demographic changes and various upcoming trends have resulted in shaping new real estate opportunities and lead to the rise of alternative real estate investments.

    Some of those are related to an increase in student housing facilities, co-working building, and co-living properties, especially in cities due to the migration from the countryside. This trend is obviously not new but has been strong over the last decade resulting in high demand for these types of real estate properties and accommodations.

    This has lead many promoters across the globe to develop specific and dedicated projects in order to coop with clients’ expectations and demands, exiting the real estate cyclical aspect to move toward a fast-pace gearing.

    Luxembourg is a leading European center for alternative investment funds and a strong position for Real Estate funds


    By Real Estate funds, we mean a fund which will be dedicated to development/management of projects with a return generation linked to the associated real estate asset(s), multiple strategies can be used in this sort of fund such as:
    • Development: This strategy focuses on the acquisition of unimproved land or the demolition of the existing property for re-development.
    • Core: It consists of a passive strategy in which the fund purchases properties in order to receive a consistent and stable cash flow in the long run, generally in the forms of rent or long terms leases.
    • Core Plus: This strategy is the enhanced Core version where the fund will have to be more active, generally the fund purchases buildings which can be upgraded and hence lead to improving the quality of tenants and cash flows.
    • Value-Add: In this strategy, the fund will purchase buildings with a lot of issues (tenants, management, renovation) but with great cash flow potential.
    • Opportunistic: This strategy focuses on special circumstances where assets are selling at a discount.
    • Student housing: Which invests in the development and sale of student accommodations or buy and hold.
    • Carehome: Which invests in the development and sale of care home accommodations or buy and hold.
    • Hospitality: Which invests in the development and sale of hotels, restaurants, residence services, parks, and related accommodation.

    The Special Limited Partnership is the perfect solution to host one of these strategies.

    This vehicle can indeed be used to directly invest into any type of real estate projects (infrastructure, building, lands, housing, etc.)

    This type of structure fits promoters wanting to establish any type of real estate fund strategies and looking at the same time for investors willing to invest in onshore, transparent, tax compliant structures.

    Key benefits for Real Estate Fund:


    The use of the Special Limited Partnership is particularly advantageous thanks to its flexible legal and tax environment, with key benefits for Real estate funds include:
    • No minimum capital
    • Unregulated up to 500 000 000 Eur (for close-ended fund assuming that there is no leverage)
    • LP may subscribe one of their real estate project by contribution in kind into the fund
    • Commitment and Drawn down mechanism available
    • Unlimited number of investors, share classes or capital account
    • An external auditor is not mandatory
    • There is no specific debt/equity ratio
    • Carried interest and tracking shares available
    • Full tax transparency – no withholding tax upon distribution of the dividends or profit

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