GERMANY - Institutional investors poured more than €3bn into Spezialfonds last year while also targeting open-ended real estate funds, according to figures from the industry association for investment funds (BVI).
Institutional net inflows into real estate Spezialfonds almost doubled last year compared with 2010, rising from €1.7bn to €3bn, the BVI said.
Its survey also found that, last year, open real estate funds (OIFs) were the most purchased type of mutual fund despite net inflows decreasing slightly from €1.5bn to €1.2bn year on year.
However, the statistics did not distinguish between institutional and retail investors for OIFs.
Under new regulations, there is a minimum holding period for larger investments in OIFs - introduced following severe liquidity problems in these funds during the crisis.
In a general comment on the German investment fund market, Thomas Neiße, president at the BVI, said it was "two-sided", with "professional investors buying and private investors selling".
In other news, Schroder Property published the results of a survey showing that the vast majority of German institutional real estate investors are looking at Germany and Western Europe in the first half of this year.
As much as 90% of the 112 insurers, banks, family offices and pension funds surveyed last summer said they would be adding German property to their portfolios in early 2012.
A similar number of respondents (88%) said they were looking at real estate in Western Europe.
Only 24% planned to invest in North America and Eastern Europe, and 21% in Asia, with Australia becoming more interesting for German investors due to its stable economy and currency, Schroder Property said.
Michael Ruhl, managing director, said he expected the increased interest in European real estate markets to bring down yields in top locations to a maximum of 5% compared with 6% in all other regions.
More than 80% of investors said they were looking at core property for safety reasons and that the most interesting objects could be found in retail property.
But Schroder Property also pointed out that residential real estate had become "more interesting" for institutional investors, with 43% looking into an investment in the sector.
Meanwhile, German residential specialist Patrizia has published a study on how demographics are influencing prices in 114 German cities.
It said the demand for higher-quality living space was not necessarily fuelled by a growing population, but rather by the structure of the population in a given area.
According to its calculations, only 8.5% of the increase in rents and 20% of that in prices could be explained by population growth, while the rest depended on the wishes and demands of the existing population in an area.
Marcus Cieleback, head of research at Patrizia, said investors should look more at the qualitative demands of residents like families or the elderly and not only at population growth, which only links to quantitative demand for property.
