GERMANY - The €21bn BVV Pensionskasse for banks has decided it will make no new real estate commitments for the next 12 months, but expects to increase its long-term allocation to the asset class in the future.

BVV currently has a strategic real estate allocation of 8%, but Rainer Jakubowski, member of the board, told IPE Real Estate he hoped this would increase to 10% in the future.

"If you are talking about the next 12 months then I am afraid we will stay with our strategic share of the entire portfolio, which is 8% on a commitment basis," Jakubowski said.

"We will not increase this yet, but if we look further into the future then it is my hope that we will be allowed to increase its share to 10%."

Moreover, the pension fund has not made any new real estate commitments since the onset of the financial crisis.

"Two years ago everyone was talking about interesting opportunities that, because of the crisis, some investors would have to sell. But that never happened," Jakubowski said.

He added it has not been possible to invest heavily because of a limited risk budget, especially as real estate is currently viewed by BVV as being more risky today because of increased volatility .

"We have learnt that real estate is more volatile than a couple of years ago," he said.

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