Low valuations of REITs on foreign stock exchanges, their excellent operating results, and expectations of lower interest rates make this a perfect time to invest, according to the managers of Mount TFI. The first fund investing in REITs recently made its debut on the Warsaw Stock Exchange.
A few weeks ago, a discussion took place in Poland regarding introducing REIT regulations (Real Estate Investment Trusts) into the legal system; however, a fund that offers Poles the opportunity to invest in such companies already made its debut on the Warsaw Stock Exchange today. This fund is Mount Globalnego Rynku Nieruchomości FIZ (MGRN) managed by Mount TFI.
“MGRN is the first entity listed in Poland that provides the opportunity to invest in REITs, internationally recognized, stable instruments of long-term savings. It is based on shares of public REITs operating in the markets of Western Europe, Great Britain and the USA. I hope that after the introduction of appropriate legal regulations in Poland, we will be able to expand MGRN’s exposure to Polish entities and real estate,” says Mikołaj Motz, CEO of Mount TFI.
MGRN was established in 2017 and, through REITs, invests primarily in logistics and residential real estate, including data centres, dormitories, shopping centres, hotels and single-family houses. The fund has exposure to liquid, high-quality securities listed on regulated markets.
“In 2022, the market valuation of global REITs dropped by nearly 30 percent, and now almost all market segments are valued significantly below long-term averages. At the same time, the operating results of these entities were record-breaking. The financial market expects interest rates to drop soon. Together, these factors provide a solid foundation for rising valuations. Early investors have already noticed this, which can be seen in the growing inflow of funds to REITs. It’s time to invest,” argues Jakub Pacholec, a Management Board Member of Mount TFI and MGRN’s fund manager.
MGRN is currently valued at nearly PLN 40 million, and Mount TFI plans to regularly issue new certificates.
“We are glad that even before the first public issue, Polish investors decided to entrust us with almost PLN 40 million. This shows that REITs are an interesting instrument for them. Especially now, when valuations and the macroeconomic environment provide many arguments in favour of this asset class. Our ambition is to have the capitalization of the MGRN fund reach the level of PLN 100 million. We want the fund to regularly beat the S&P Global REIT Index, as before,” Jakub Pacholec adds.
Jakub Pacholec is a broker, investment advisor and Member of the Management Board of Mount TFI. He obtained his PhD from the Collegium of Economic Analysis of the Warsaw School of Economics, where he researched the characteristics of REITs as investment instruments. He is also the author of scientific publications regarding REITs.
Making MGRN public and introducing its certificates to stock exchange trading simplifies the purchase process for individual investors. The accessibility of certificates is also improved by having a much lower issue price, compared to the requirements of private funds. Additionally, going public provides Mount TFI with the opportunity to educate its clients and inform them about the fund’s performance and strategy.
Currently, REIT regulations have been implemented in over 40 countries around the world, including the USA, Canada, France, Great Britain and Germany. Several dozen more – including Poland – are preparing to introduce such regulations.
