Real estate may sit directly in the fund or in a project company whose shares or interests are held by the fund. The models produce different title, bankability, governance, tax and exit outcomes. The structure must be selected before transfer, not after registration.
- In the direct model, the property forms part of the fund and the land register records the unit-holders collectively.
- In an SPV model, the fund owns shares or interests while the company owns the property.
- Asset eligibility depends on fund category, investor status, declaration and rules.
- The manager executes the transaction under specialised-depositary control.
- The fund does not remove title, planning, VAT, property tax, contractor or financing risk.
01
Direct ownership or SPV
- Property in the fundLand register: unit-holders
- Fewer corporate layers, but every action follows the rules and depositary control.
- LLC interest in the fundCompany register: manager as trustee
- The SPV owns the property, operates contracts and may be a separate borrower.
- JSC shares in the fundShare register / custody
- Useful for sophisticated equity arrangements and a later block sale.
- Multiple SPVsPortfolio structure
- Separates projects, lenders and partners but increases cost and controls.
- Contractual rightsFund or SPV
- Receivables, options and future assets require a category, declaration and rules review.
Unit-holders have economic participation in collective property but do not sign property contracts themselves. The manager acts as trustee; investor control must be built into the rules.
02
Choosing the structure
- 01
Identify whether the target is completed property, land, construction in progress, future property or a corporate wrapper.
- 02
Compare asset and share deals across title, licences, contracts, debt, VAT, profit tax, duties and consents.
- 03
Confirm eligible assets and concentration limits for the fund category and declaration.
- 04
Compare direct fund borrowing with SPV-level bank finance and available security.
- 05
Choose the landlord, developer, employer, technical customer and facilities-contract counterparty.
- 06
Model property sale, SPV sale and fund termination before acquisition.
03
Direct property ownership
- 01
Fund property is collectively owned by unit-holders, but ordinary partition and individual extraction do not apply.
- 02
The land register identifies the holders of the relevant fund collectively without naming each holder or fraction.
- 03
The manager applies for registration and acts as trustee.
- 04
Contracts identify the manager as trustee and the fund; settlement uses segregated accounts.
- 05
The manager signs leases, construction and insurance contracts and litigates for the fund.
- 06
Assets and liabilities remain segregated from the manager, other funds and holders.
04
Ownership through an SPV
- 01
The fund may hold LLC interests or JSC shares if permitted by its category, rules and declaration.
- 02
The SPV remains property owner, taxpayer and counterparty to operating contracts.
- 03
The manager exercises shareholder rights: voting, appointments, approvals and dividends.
- 04
The rules may require investment-committee approval before the manager votes.
- 05
The SPV retains its history, debt, tax exposures and liability; the fund wrapper does not cleanse them.
- 06
SPV documents must align with fund rules, unit classes and deadlock mechanisms.
05
Transferring property or the company
- 01
Confirm whether non-cash property may pay for units or be acquired after formation.
- 02
Select the route: contribution for units, purchase by the fund, corporate contribution or reorganisation.
- 03
Obtain an appraisal where required and reconcile it with price and NAV.
- 04
Secure corporate, spousal, lender, competition and other mandatory consents.
- 05
Register real-estate title and trustee status; complete notarial, register or custody steps for equity.
- 06
Synchronise transfer, unit issue, payment, registration and segregated accounting.
06
Property due diligence
- 01
Title, transfers, litigation, attachment, mortgages, easements and leases.
- 02
Land category, permitted use, zoning, planning documents, red lines and protected zones.
- 03
Construction and commissioning permits, actual parameters, unauthorised works and technical condition.
- 04
Lease term, indexation, deposits, incentives, breaks, capex and tenant concentration.
- 05
Utilities, access, parking, environmental and fire-safety matters.
- 06
Tax history, cadastral value, VAT, audits and input-tax treatment.
- 07
For an SPV: corporate history, owners, debt, loans, guarantees, staff, IP and compliance.
07
Development and construction
- 01
Define whether the fund or SPV is landowner, developer, investor, employer or project-company shareholder.
- 02
Split the budget into land, design, works, utilities, interest, marketing, contingency and tax.
- 03
Reserve approvals for budget, contractor, timetable, product, price and funding changes.
- 04
Test housing-development, permit, project-finance and escrow rules where applicable.
- 05
Set technical controls for work, milestones, quality, guarantees, insurance and defects.
- 06
Update completion forecast, cash flow, covenants, claims and NAV impact monthly.
08
Leasing and operations
- 01
Define the property manager's authority and the expenses payable by the fund or SPV.
- 02
Maintain a rent roll, indexation calendar, receivables, deposits and break options.
- 03
Allocate landlord, tenant and facilities-manager costs.
- 04
Use procurement thresholds and contractor conflict checks.
- 05
Monitor insurance, safety, licences, utilities and major repairs.
- 06
Reflect rent, costs and liabilities in reporting, valuation and holder-distribution modelling.
09
Project finance
- 01
Direct borrowing against fund property is legally constrained; the applicable regime depends on fund type and rules.
- 02
An SPV may borrow separately, but lenders still review the fund, manager, control, cash flow and ultimate owners.
- 03
Security may include the property mortgage, share pledge, assignment of rent, accounts and project rights.
- 04
Fund assets cannot secure unrelated third-party obligations; the financed debt must connect to fund management.
- 05
Covenants must align with the rules, declaration, committee approvals and manager-replacement mechanics.
- 06
Model DSCR/LTV, interest risk, cash sweep, prepayment, default and enforcement before closing.
Article 40 contains a general borrowing restriction, while special cases may apply to restricted units under Bank of Russia rules. Never import a limit from a pitchbook; test current law, regulation, category and fund rules.
10
SPV governance
- 01
Map decisions across the manager, investment committee, holder meeting and SPV bodies.
- 02
Put quorum, directors, major and interested transactions, dividends and deadlock in SPV documents.
- 03
The manager signs shareholder decisions; internal approval must precede external voting.
- 04
A friendly director is not a control system: require reporting, bank mandates and budget control.
- 05
For unit classes, map economics and voting to each project.
- 06
A manager-transition plan must preserve corporate rights, powers, bank access, originals and open deals.
12
Valuation and NAV
- 01
Property and SPV equity require different valuations: company value includes debt, tax, working capital and liabilities.
- 02
NAV must reflect current title, leases, construction, security and material events.
- 03
Cadastral value is not market value, and an appraisal is not legal due diligence.
- 04
For development, agree method, completion stage, sales forecast, remaining capex and discount rate.
- 05
Explain material gaps between appraisal, transaction price and lender model.
- 06
Show NAV sensitivity to vacancy, cap rates, delay and refinancing.
13
Tax map
- 01
For directly held fund property, the manager computes property tax and pays it from fund assets.
- 02
Land tax, cadastral value, regional relief and the manager's local registration require separate review.
- 03
Leasing and property disposals require VAT analysis, including input tax and recovery.
- 04
At SPV level the company bears property, land, profit and VAT; dividends and equity sales are analysed separately.
- 05
A property contribution for units is not automatically tax-neutral: test disposal, VAT, profit or personal tax and basis.
- 06
Transactions among the fund, holders and related SPVs require market terms, business purpose and transfer-pricing review.
A closed-end fund is not a universal tax exemption. The outcome depends on direct or SPV ownership, asset type, entry and exit transaction, investor and region.
14
Sale and exit
- 01
An asset sale converts the property into fund cash; distribution or redemption rules then apply.
- 02
A share deal transfers the SPV with its contracts, taxes and debt and usually needs fuller warranties.
- 03
Portfolio sale, refinance, partial redemption and fund termination are distinct routes.
- 04
Prepare a data room, technical report, tenant estoppels, lien releases and tax model.
- 05
For SPVs, design completion accounts or locked box, leakage, control handover and bank consents.
- 06
Reconcile exit price with NAV, appraisal, investor waterfall and creditor claims.
15
Document set
- 01
Rules, declaration, unit class and holder register.
- 02
Land and company extracts, title and complete SPV documents.
- 03
Appraisal, financial/tax model and NAV calculation.
- 04
Holder, committee, manager and SPV approvals.
- 05
Acquisition contract, transfer act, settlement and closing registration map.
- 06
Finance, security, covenants and lender consents.
- 07
Leases, works, technical management, insurance and facilities agreements.
- 08
Tax memorandum, KYC/AML, sanctions and conflict checks.
- 09
Exit plan, data-room index and document-refresh calendar.
16
Red flags
- 01
Eligibility is assumed without checking category and declaration.
- 02
The SPV exists only for a tax slogan, with no business model.
- 03
Equity enters the fund without debt, guarantee and history review.
- 04
Security is not aligned with fund rules and approvals.
- 05
A related contractor has no disclosed pricing process.
- 06
Land valuation assumes a use absent from planning documents.
- 07
Rent is unsupported by contracts, payments and deposits.
- 08
Completion budget omits capex or interest.
- 09
Tax is assumed absent because the fund is not a legal entity.
- 10
Exit is designed after acquisition, when the structure already limits buyers and finance.