COMPARE TO BE SURE.

Investment Outlay
Auxiliary costs
Risk Spreading
Fungibility
Tax incentive
Administration Costs
Transparency

Every investor can choose between two basic forms of property investment:

Direct property investment
Purchasing an apartment house, an investment apartment, a share in a closed-end property fund
Indirect property investment
Purchasing property stock or a share in an open-end property fund

The main differences between the two forms lie in the necessary investment outlay, the auxiliary costs, the fungibility, the return, the tax burden and the spreading of risk. It’s up to you to decide the best option in your particular case.

	Forms of property investment
Criteria	Direct investment	Closed-end property fund	Open-end property fund	Property share
Investment Outlay	High	High	Low	Low
Auxiliary costs	High	High	Moderate	Low
Spreading of risk	Low	Low/moderate	Moderate/high	High
Fungibility	Low	Low	Moderate/high	High
Return / Risk	Low	Moderate/high	Low	Moderate/high
Administration Costs	High	Moderate	Low	Low
Transparency	High	Low	Moderate	High
Option for investor to take part in shaping the investment	High	Low	Low	Moderate
Price development	-	-	-	volatile

Investment outlay

Investing in CA Immo shares requires a much smaller outlay than making a direct investment in real estate: just one share is enough to get you on board. By contrast, purchasing a share in a closed-end property fund or an investment apartment calls for a far greater outlay, even where much of the acquisition cost is financed with borrowed capital.

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Auxiliary costs

Only securities fees apply when purchasing CA Immo-shares (the condition at BA-CA stipulates 0.7% of market value, with a minimum of EUR 22). Transaction costs are much higher when purchasing an investment apartment (3.5% real estate transfer tax, 1% registration fee, credit charges, notary office costs, lawyer’s fees, and so on). The same applies to the purchase of open-end property fund shares, where a premium or surcharge of 3% to 4% applies. Higher auxiliary costs only amortise after a lengthy retention period and thus reduce the return to the investor.

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Risk spreading

Thanks to the diversity of investment locations and usage types, the CA Immo property portfolio guarantees a wide distribution of risk. Loss of rent or falling rent levels at one specific site or property can be counterbalanced by new rental income or increasing rent levels at other places or properties.
Less favourably, an investment apartment that is not rented means a cessation of income even as expenses (running costs, loan rates, maintenance etc.) continue to apply, or even increase.

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Fungibility

With their market listing and day-to-day price adjustment, CA Immo shares can be bought and sold at any time. Shares in closed-end property funds (a kind of direct property ownership) are virtually unsaleable before the expiry of the required period of retention (typically 10 years or more); this is because there is no secondary market for such products.

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Volatility

The free trade of the shares on the stock market results in continual changes in their price. The resulting fluctuations are a fundamental characteristic of shares as investment tools. For long-term investments, the long-term price development is the important consideration, although short-term fluctuations cannot be ruled out. These are countered by the long-term internal value of the shares deriving from the real value of the portfolio.

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Tax incentive

Where a shareholder had a holding of less than 1% of the share capital over the last five years, a private investor may claim price gains on CA Immo shares on a tax-free basis following a retention period of 12 months. Tax-free gains from the sale of an investment apartment may only be claimed after a retention period of 10 years. An open-end property fund is taxed at 25%, with non-realised (and thus non-cash-relevant) revaluation surpluses also subject to taxation. In the case of stock corporations, gains linked to property value increases are only subject to tax when sold.

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Administration costs

CA Immo shares impose no administration costs on the investor. Where necessary, shareholders may assert their ownership rights at an Ordinary Shareholders’ Meeting. The Management Board manages its day-to-day operational business in the interest of investors. By contrast, the management of an investment apartment demands business, legal and taxation expertise on the part of the investor; otherwise, service providers such as property managers, lawyers, tax consultants etc. must be appointed, thereby reducing the return due to the investor.
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Transparency

Compared to other property investment products, reporting within real estate stock corporations is a model of transparency. Reporting by CA Immo conforms to the strict rules of the austrian Stock Corporation Act and international accounting regulations as well as the corporate governance code.

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