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In July 2003 the Austrian parliament enacted the Real Estate Investment Fund Act (Immobilien-Investmentfondsgesetz - ImmoInvFG), which came into force on September 1 2003. This new legislation aims, in particular, to encourage private investments in real estate. Previously, Austrian law had only contained rules concerning investment funds in securities.

The ImmoInvFG regulates the following:

Management companies

The assets of a real estate fund are owned and administered by so-called investment fund management companies for real estate (IFMCs). These IFMCs require a banking licence under the Austrian Banking Act (Bankwesengesetz - BWG) and may only engage in real estate fund business and related businesses.

Under the ImmoInvFG IFMCs may appoint a third party asset manager to manage the real estate fund and administer its assets.

Permitted investments

Based on the principle of diversification of risk, the ImmoInvFG sets detailed rules about how funds are to be invested (for example, whether they can invest in land with buildings, land with buildings under construction, land that is dedicated and suitable for development, flat property, and so on).

With the exception of shares in certain real estate companies, real estate funds are prohibited from investing in securities. Thus, a mixture of real estate funds and securities funds is forbidden.


A specialist appraiser must value each asset to be purchased, sold or encumbered by a real estate fund before the transaction can be executed. Also, at least two independent appraisers must value the assets of a real estate fund at least once a year.

The issue and redemption price of unit certificates must be published whenever the issuance or redemption of unit certificates takes place, and at least twice a month. If there are indications that the value of the assets has changed by more than 10%, the IFMC is obliged to provide an updated appraisal of the real estate fund's assets.


The Minister of Finance (Bundesminister für Finanzen - BMF) must appoint a state commissioner for each IFMC. The state commissioner is subordinated to the regulator, the Financial Markets Supervisory Authority (Finanzmarktaufsichtsbehörde - FMA).

The prospectus as well as the terms of the funds are subject to approval by the FMA.

Special funds

The ImmoInvFG sets special rules for specific closely held real estate funds. These special real estate funds' unit certificates can only be held by a maximum of 10 investors, all of whom must be institutions rather than individuals and known to the IFMC. The transfer of unit certificates in these special real estate funds is subject to the IFMC's approval. For these funds some of the extensive restrictions of the ImmoInvFG are not applicable or are, at least, alleviated.

Martin Ebner and Alexander Popp

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