REAL ESTATE – Germany’s Deka says its real estate funds for institutional investors plan to invest €550m in new properties over the near term, with €250m going to German objects and €300m to those outside of Germany.
Deka said the funds, known in German as Immobilien-Spezialfonds (ISFs), would be hunting for German properties worth between €7m and €35m. For those abroad, the seven ISFs would pay up to €50m, it added.
Deka also said the ISFs had recently bought on mixed-use building in Frankfurt’s West End and one office building in Munich-Freising for €14m.
German ISFs are property funds created for pension schemes, insurers and other institutional investors. In exchange for investing at least €25m, the funds afford these investors considerable transparency, lower fees and good deal of control over the investment process.
Deka, the asset manager for state-owned German savings banks, has around €1bn invested in its seven ISFs. The leader in this segment is OIK, which has around €6bn invested in the products. OIK is 95% owned by IVG Immobilien, a listed German real estate firm.
Deka, meanwhile, maintains its position as Germany’s leading provider of open-ended real estate funds, which are primarily targeted to private investors. According to new statistics from German fund industry lobby BVI, Deka and its subsidiaries have €17.8bn invested in these products.
In a related event, Deka peer DEGI said all of its funds – including retail and institutional ones – would invest €2bn in new properties in the future while selling €500m worth of German properties this year.
DEGI’s German fire sale is partly due to its restructuring of its €4.8bn core German fund, known as "Grundwert-Fonds". In reducing the core fund’s domestic exposure to 60% in the long term from 85% currently, DEGI hopes to boost its return, which last year was just 2.3%.
Along with Grundwert, DEGI’s open-ended real estate funds have €7.9bn invested in them.
DEGI, a unit of Allianz Global Investors, also said that amid strong demand for ISFs, it planned to unveil another such product this year. DEGI’s ISFs currently have a volume of €1.1bn.