Real estate securitization through companies with specific investment purpose

The subject of this study is investment in real estate. The subject of research is the investment of money raised through public offering of securities in real estate. This process is also referred to as the securitization of real estate, which within the meaning of the Bulgarian legislation can be carried out only by special purpose vehicles (SPEs). The main objective of the author is the analytical study of the theoretical-applied aspects of the securitization of real estate through the SPE, to reveal the prospects for the development of these companies in Bulgaria, and justify the need to improve securitization in Bulgaria by improving its methodological and legislative basis. To achieve the goal, the following research tasks have been solved: 1. The economic essence of the securitization of real estate and its relationship with the development of the economy and the capital market is discussed from a theoretical-applied perspective. 2. The emergence and development of SPE worldwide and the economic legal and organizational prerequisites for the emergence of SPE for real estate in Bulgaria are studied. 3. The status, prospects, and problems of SPE in Bulgaria are analyzed. 4. Conclusions and recommendations for improving securitization in Bulgaria by improving its methodological and legislative basis are formulated. The following important contribution points of scientific and scientifically applied nature can be highlighted in the study: 1. A theoretical clarification and rationalization of the securitization of immovable property in the context of the SPE's activities has been carried out and the prospects for its development and improvement are outlined. On this basis, the distinctive links between the development of the SPE, the real estate market, and the capital market are outlined. 2. The author's position on the development and globalization of SPEs (REITs) is presented, demonstrating their role in the more efficient functioning of the real estate market and the capital market. The advantages of the SPE as a collective investment scheme in real estate are outlined. 3. The study examines the economic legal and organizational prerequisites for the development of SPEs in Bulgaria and identifies identified difficulties in their activities. 4. The status, investment programs, and financial situation of licensed SPEs in the period 2004 - July 2005 have been analyzed and critically evaluated. 5. Known methods have been adapted to optimize the measurement of the financial situation of enterprises through a summary indicator to SPE and public companies. Approaches to improve the information provision of public companies are outlined, which leads to improved corporate governance. 6. Specific proposals for changing existing regulations (POSA, IPA, etc.) are formulated to introduce summary indicators in practice and increase the effectiveness of the investment activities of SPE.