REAL ESTATE – DB Real Estate, the property fund arm of Deutsche Bank, has re-opened its core German real estate fund following a write-down of its holdings which, at €147m, was lower than previously estimated.

Following the surprise closing of the €6bn fund last December, triggered in part by the impromptu write-down, analysts had estimated that the move would lower the fund’s value by €200m and €600m.

But in a letter to the fund’s shareholders, DB Real Estate said a €222m write-down of the fund’s properties in Germany was partially offset by an increase of €76m in the value of the fund’s foreign properties.

DB Real Estate also insisted that it would keep the fund, called Grundbesitz-Invest, open even if it were again hit by massive outflows. Outflows totalling €600m within two days were the reason why DB Real Estate decided last December 13 to temporarily freeze the fund.

The fund provider also disclosed more details on the restructuring of Grundbesitz-Invest. It said that by 2008, the fund would be 50% invested in European countries outside of Germany, while its German exposure would fall to 50% from 60% now.

Indeed, DB Real Estate announced in January that it would sell €1bn worth of German properties. It now aims to complete the sale of those properties by July. Grundbesitz-Invest owned 130 objects at the time it was shut down last December.

Beyond the promise to keep Grundbesitz-Invest afloat, Deutsche Bank has also set aside €205m to compensate any investors for losses related to the fund’s shutdown.

Yet this did not placate shareholder advocacy groups much. One group known as the DSW renewed its sharp criticism of DB Real Estate, noting that the smaller-than-expected write-down was proof that it could have kept the fund afloat.