GERMANY - Deutsche Gesellschaft für Immobilienfonds (DEGI), a part of Aberdeen Property Investors, is planning to take advantage of discounted property prices to expand its property portfolio.
Earmarked resources and the anticipation of further inflows to the funds have encouraged DEGI to plan new acquisitions and target purchases in countries such as France, Germany and the UK, according to Bärbel Schomberg, chief executive officer (CEO) for DEGI.
"We are in a good position to take advantage of new investment opportunities in the current markets, which are beginning to offer attractive values," he argued.
Market volatility, fluctuating stock markets and record low bond yields are expected to generate interest in security-orientated forms of investment and good sales opportunities for public properties, according to the firm.
This, in turn, is expected to benefit DEGI's funds as they target fully-let portfolio properties, new acquisitions and buildings with low levels of debt.
"Our funds will also be affected by the economic downturn in the coming year. However, we anticipate returns to continue to be above the level of fixed-interest comparable investments, thanks to our long-term tenancy agreements already in place," continued Schomberg.
DEGI invested €1.7bn for its property funds in 2008 and all of DEGI's funds returned between 4.4% and 5.3%.
At the end of February, the DEGI Europa and DEGI International fund were 93.3% and 98% let respectively.
DEGI released its latest research report on Germany this week, entitled Market Outlook Germany, which anticipates higher vacancy rates and falling rents in 2009 but predicts the property market will start recovering in 2011.
The report found Germany's office and retail markets were the most robust during the economic crisis.
Munich, Stuttgart and Cologne were the most popular office locations, and approximately 3.3m square metres of office space were transacted in 2008 - only slightly below 2007 levels.
Total investment volumes, however, fell by 60% in 2008 to €25.4bn as reduced demand for property led to rising peak returns of up to 5.6% in main investment centres.
DEGI currently manages around €6bn of properties in 17 countries.
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