GERMANY - The Allianz Flexi Immo became the latest in a series of German open-ended real estate funds (GOEFs) to announce temporary closure.
Allianz Global Investors (AGI) said it would discontinue trading of shares in the real estate fund of funds launched in September 2008, currently managing around €170m in assets.

According to AGI, the step became necessary as investors had withdrawn €200m in assets from the fund since the beginning of 2011, similar to outflows seen in other GOEFs.

In a comment on the announcement, German law firm Dr Stoll & Kollegen explained that, legally, a temporary closure was required if the liquidity quota in the fund fell below 5%.

"That is why the investor release names liquidity the top priority," the law firm noted in a press release.

It added that AGI was waiting for the biannual payouts from the funds in which the Allianz Flexi Immo was invested, "among other measures".

However, according to AGI, the fund of funds is by now "almost solely invested in open real estate funds that have discontinued trading", as well as investments that "cannot be liquidated over the short term".

In other news, Erlangen-based GRR Real Estate Management has launched its first Spezialfonds using IntReal as a Service KAG.

The fund will invest in "basic retail" - retailers focusing on everyday commodities, with a 70% quota of grocers.

GRR said it had already collected €50m from German insurers HUK Coburg and WPV - with plans for the fund volume to increase to €300m over the next 2-3 years.

Meanwhile, US rating agency Standard & Poor's noted in a report on Germany that the risk of rising house prices becoming an asset bubble was "remote" because the market has become "increasingly affordable".

It pointed out that a drop in construction between 1995 and 2010 had created a "pent-up demand" that meant the current rise in German residential real estate prices, "after two decades in the doldrums", could potentially continue for the next 2-3 years.

In the report, entitled 'Why Germany's Rising House Prices Are Bucking The European Trend', Jean-Michel Six, Standard & Poor's chief economist for Europe, said the price increase "could fuel consumer price inflation".

But he added that S&P believed the "modest recovery" in house prices was based on a "healthy foundation" - of demand exceeding supply rather than on speculation, and on low interest rates.

Lastly, real estate company DTZ published its 2012 'Money into Property' research series predicting a growing refinancing gap in European commercial property markets.

In this year's study, twice as many banks than in the previous survey expected the number of loans to go down.

A similar number granted loans performing worse this year, while last year they had expected an improvement.

DTZ forecast an 11% drop in European investment revenues from properties this year.