GERMANY - Two-thirds of listed German property companies are more opaque - and therefore riskier - than their reports suggests.

A study by research firm FERI of German, Austrian and Swiss core-portfolio property companies found that only 36% provided credible transparency to potential investors. In contrast, open-ended German property funds scored 62% measured against criteria including asset transparency and debt capital.

Munich-based property firm Dibag Industriebau declined to comment on the index's lowest ranking of 15%.

Decrying a "manifest lack of transparency", FERI head of real estate Wolfgang Kubatzki pointed to the frequent absence of information on property market values, rental income and tenancies. The report's authors also noted a considerable divergence between commercial property firms (with an average 41%) and residential (28%).

Swiss listed property companies performed slightly better than their German counterparts, with a 46% average transparency rating. Austrian firms scored 30%.

In contrast, EPRA's corporate governance report - published last week after a lengthy delay - noted a pan-European improvement in public disclosure. Rather, it identified the need for improvement in executive performance-related pay and board independence.
 

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