GERMANY - German real estate fund of funds "will not recover" from the current crisis, property researcher Scope has warned.
Currently, €2.1bn is stuck in property funds of funds, which are closed for redemption or already being dissolved following liquidity problems in the wake of the financial crisis.
The major part of this - close to €1.9bn - stems from shares in open-ended real estate funds, which are themselves frozen or already being dissolved, the researchers added.
Already in the first half of 2012, four major funds of funds had to be closed: the DWS ImmoFlex mandate with a fund volume of around €100m, the €300m Stratego Grund issued by the regional bank Landesbank Berlin Investment, the €230m Allianz Flexi Immo-A-EUR and the Santander asset management fund Kapitalprotekt Substanz at €200m.
"Overall," Scope said, "the vehicle of real estate funds of funds is unlikely to recover from the current setback."
In other news, GRR Real Estate Management announced the purchase for its first-ever Spezialfonds, in which the Versorgungswerk WPV, among others, is invested.
GRR said it had bought a market run by retail giant Rewe for its GRR German Retail Fund No 1 in Krefeld north of Düsseldorf for €9.5m.
The seller was a fund issued by Rockspring Property Investment Managers advised by CBRE.
GRR announced that further purchases for the fund would occur in the "imminent future", with €100m having already been committed to the fund, which has an eventual target volume of €300m.
Elsewhere, Patrizia has invested another €250m in residential property in the cities of Munich, Frankfurt, Düsseldorf, Regensburg, Hamburg and Berlin.
In total, around 1,000 flats and 30 retail units, partly still under construction, were bought from various sellers.
Peter Willisch, managing director at Patrizia WohnInvest KAG, stressed that the company only bought residential property in locations showing an increasing demand and limited supply, with good infrastructure.
Lastly, the 'Initiative Immobilien-Aktie', a working group to promote German property equity, said the asset class was attracting more and more foreign institutional investors.
Alexander Dexne, chairman of the Initiative Immobilien-Aktie, said: "Domestic property shares are now also profiting from Germany's role as safe haven."
The introduction of a German REIT had failed miserably in the wake of the crisis owing to bad timing and complete lack of investor interest, but Dexne is convinced the time for G-REIT has finally come.