GERMANY - The €6bn Berliner Ärzteversorgung (BÄV) has outsourced the asset management of its real estate portfolio to Pramerica.
The pension fund for doctors in the German city of Berlin has chosen the real estate subsidiary of Prudential Financial to manage its existing property portfolio.
The portfolio consists of several directly held German properties, as well as a Spezialfonds that is managed via a third-party service KAG, as well as Luxembourg vehicles, Pramerica said.
A spokesperson for the company told IPE: "The initial portfolio comprises €300m in assets, but the aim is to increase the volume."
The BÄV, which was unavailable for comment before deadline, is seeking to diversify its portfolio within Europe, according to information provided by the real estate company.
Pramerica expects "more management changes to take place in German institutional portfolios" in the near future as investors seek to separate pure administration from real estate portfolio management.
In other news, AXA reported the "first successful transformation" of a real estate mutual fund (OIF) into a German Spezialfonds.
The AXA Immoresidential had been launched in 2009 as a vehicle exclusive to institutional investors.
At the end of February, the fund held around €120m in assets, focusing on residential real estate investment in Germany.
It is targeting a size of €500m by the end of next year.
In a statement, AXA said: "Since the launch of the fund, the German legal framework for public mutual funds has changed significantly, resulting in the main target clients - German insurance companies - no longer being allowed to allocate new investments."
AXA noted that all invested institutionals had agreed to the conversion and that the fund had already attracted a German bank as its first new client, which has undertaken a €10m investment.
Currently, the fund has made 11 investments including four development projects located in Cologne (two properties), Hannover and Düsseldorf.
Meanwhile, Berlin-based real estate company Beos announced the launch of the successor to its first German Spezialfonds 'Beos Corporate Real Estate Fund Germany I', which has now invested more than 80% of its €400bn in assets.
The 'Beos Corporate Real Estate Fund Germany II', also focusing on German corporate real estate, will target a size of €400m, of which €100m has already been committed by German insurers, pension funds and savings banks, Beos said.
Beos forecasts a return between 6.75% and 7% from investments in properties ranging from €10m to €50m in the top seven cities and the German growth regions.
For German commercial property, HSH Nordbank provided a positive outlook in its latest report on the sector.
The bank does not see any major risks developing in the course of this year despite a slight downturn in Germany's economic growth.
The investment risk will increase next year when a rise in interest rates is expected, but, according to HSH Nordbank, it will only be a "medium-sized" risk.
Colliers International Germany reported a slight drop in investment volume in German commercial property markets for the first quarter to €5.1bn, 10% less than at the beginning of last year.
The real estate company cited the fact fewer large properties had been bought and sold this year.
Andreas Trumpp, head of research at Colliers International Germany, said: "While last year the largest transactions were at over €2.8bn, it is only €1.6bn this year."
He added that, while last year most money went to large properties outside urban areas, in the first quarter of this year, most money is being invested in the six major German cities: Berlin, Düsseldorf, Frankfurt/Main, Hamburg, Munich and Stuttgart.
International investors accounted for around €1.5bn of transaction volume.
