Spain’s government has turned to Real Estate Investment Trusts (REITs) in a bid to save its faltering property market.

The government announced today its intention to introduce the tax-efficient vehicles as a means of attracting capital and increasing liquidity into the sector in part of a two-pronged rescue plan. It also announced plans for a €3bn (£2.4bn) public debt facility aimed at promoting investment.

The move to introduce REITs was welcomed by investment bank JPMorgan. Harm Meijer, an analyst at the bank said in a note: ‘Based on the few details [announced] only, our first thoughts are that this is a positive step forward. However, we need to see more details first of how the REITs will be structured and when they will be introduced in particular as the actual launch of REITs always tend to take more time than anticipated.

Meijer said: ‘In addition, one can wonder whether the market may be flooded by REIT vehicles, potentially depressing share price performance.’