8 June 2021
Communiqué

Data collection on commercial real estate for investment fund managers

The real estate sector plays an important role in the economy and its developments can have a material influence on the financial system. In recent years, increasing efforts are devoted to identifying and monitoring vulnerabilities that arise from the interplay between the real estate market and the financial system.

The European Systemic Risk Board (ESRB) wishes to establish a harmonised framework for monitoring developments in the real estate sector. This implies the collection of data and indicators that help identifying the build-up of systemic risks and assessing the potential need for macroprudential intervention. Granular and consistent data are necessary to capture market developments and analyse systemic risks adequately.

In this context, the ESRB issued a recommendation in 2016 on closing real estate data gaps (ESRB/2016/14), which was amended in 2019 by ESRB recommendation 2019/03. These recommendations contain a set of indicators that need to be collected by national authorities as part of the risk monitoring framework for their domestic real estate sector.

In Luxembourg, the Comité du Risque Systémique is coordinating work among several authorities to comply with the ESRB recommendations. In this context, the CSSF will implement a recurrent data collection exercise focusing on the financing of the commercial real estate (CRE) sector by investment funds. This data collection takes place on a bi-annual basis. For the purpose of this first iteration, answers are expected by 30 September on the basis of CRE stock data ending on 31 December 2020 and of CRE investment data over the second half of 2020.

As of 2022, the data collection will be due twice a year, on 31 March and 30 September of each calendar year. The reporting due for 31 March should refer to stock data ending on 31 December of the previous year and to investment data over the second half of the previous year. The reporting due for 30 September should refer to stock data ending on 30 June of the same year and to investment data over the first half of the same year.

The request for data collection is addressed to Investment Fund Managers (IFM) who manage funds with an exposure to the real estate market. The funds subject to the reporting should meet the following cumulative conditions:

  • The funds managed by the IFM are LU regulated or unregulated investment funds, excluding UCITS set up under part I of the law dated 17 December 2010;
  • The LU funds have, according to their reporting, a predominant strategy defined as “Real Estate”;
  • The LU funds are neither funds of real estate funds (irrespective of the country of domiciliation of the target funds) nor feeder funds investing in a master domiciled in Luxembourg;
  • The LU funds have a direct or indirect exposure to the commercial real estate market, defined as follows:

Commercial real estate means any income-producing real estate, either existing or under development, including rental housing; or real estate used by the owners of the property for conducting their business, purpose or activity, either existing or under construction; that is not classified as residential real estate; and includes social housing.”

The data collection is currently limited to the entities that are fulfilling the above-mentioned conditions. The CSSF will consider the need to enlarge the scope in the future.

The CSSF will contact the concerned IFMs directly by requesting them to provide the relevant data by 30 September 2021. These IFMs will be invited to complete the questionnaire over eDesk.

For any technical questions linked to the eDesk platform, please contact: edesk@cssf.lu.

For any other questions, related to the contact of the data collection, please contact macropru@cssf.lu.