• Ref. 4 (75c), 4(78a), 4 (78b), 124, 126a 

• Article 126a CRR3 provides for a Risk Weight of 150% for "ADC" exposures, i.e. exposures to companies or special purpose vehicles financing the acquisition of land for development and construction purposes or financing the development and construction of residential or non-residential real estate.

• The "real estate under construction instrumental leasing", regulated by Italian Law “No. 124 of August 4, 2017”, is finalized with a "single" contract regulating rights and obligations of lessor and lessee for both the "construction" (building site) and subsequent "built" phases. The construction site is configured as a temporal phase, subsequent to the signing of the contract which precedes the commissioning of the contract once construction is completed.

• The signing of the lease agreement by the lessor and lessee precedes both the purchase of the land (by the lessor on the lessee's instruction) and the construction progress reports (SALs): the lessor thus has full ownership of the land and building (under construction) from the time the lease agreement is signed, and the lessee is bound by the contractual obligations from the time it is signed. This configures complete absence of "unsold" risk for the lessor.

        In order to be more clear on that point, it has to be pointed out that:

       - upon the credit risk assessment process the full amount of the real estate is approved and it encompasses the full value of the asset (as requested by the lessee and                appraised by an external appraiser nominated by the lessor). This amount is registered as an off-balance item (i.e. a commitment to grant credit to the lessee) by the                   leasing company (at the same time the drawn amount is equal to ‘’zero’’).

      - the drawn amount (exposure to the lessee) increases along with the work in progress payments by the lessor. At the same time the lessee pays on quarterly basis the                financial interests on the lessor’s progressively increasing exposures.

      -at the completion of the construction the amount is fully drawn and equal to the full amount of the asset; from this time the lessee starts to pay  the leasing installments           to the lessor according to the agreement and contractual obligations signed before the construction (see point c)).

• The real estate asset, both “under construction phase” and in the subsequent phase once it is built, is instrumental to the exercise of an economic activity and is a production factor (like movable instrumental assets): the credit payment depends only on the financial condition of the lessee. In the two phases the credit contractual status does not change unlike other technical forms that, by distinguishing and separating the two phases (“under construction” and construction), configure "unsold" risk (an IPRE riskiness).