GERMANY - SEB has confirmed it will dissolve its open-ended real estate fund SEB ImmoInvest after too many investors opted to leave the fund.
The €6bn SEB ImmoInvest was one of the German open-ended real estate funds (GOEFs) that had to be suspended in the wake of the financial crisis when too many redemptions severely reduced liquidity.
Yesterday, SEB opened the fund for one more day of trading to see whether all redemption requests could be fulfilled.
However, too many investors opted to leave the fund, so SEB decided the fund should be dissolved altogether by 30 April 2017.
First payments are to be made to investors in June and then biannually after that.
Last-minute sales in Chicago and Singapore over the last week had pushed the liquidity quota up to more than 30%, but this proved insufficient in the end.
In a statement, SEB said: "Two groups of sellers could be identified - those investors whose investment strategy ended during the last two years and who were in need of the money, and those who felt alienated by this type of investment."
It added that "the never-ending chain of bad news in the financial industry - as well as the troubled waters open-ended real estate funds got themselves into over the last two years - have demoralised investors to the extent that they were no longer willing to grapple with arguments and ideas for the development of this type of investment."
Meanwhile, Patrizia published its latest office investment compass (Büroinvestment-Kompass) for Europe, showing that, in 2011, prices for office property decoupled from fundamentals.
The company said: "Prices are no longer driven by future expected rental increase but instead by the current rental situation and the market size." As examples for this development, Patrizia mentioned Berlin and London, where prices increased by as much as 10% - yet jobs only went up slightly (+1.4% in Berlin) or fell (-0.4% in London).
Other markets such as Munich, Budapest and Lyon reported much better development on the job market, but this went largely unnoticed by investors, Patrizia said.
Karin Siebels, head of commercial research at Patrizia GewerbeInvest, said: "Our research shows that, at the moment, investors are looking less at future rent developments than current rental yields."
Separately, Union Investment just reported the purchase of the office and retail property 'Neue Promenade 6' in Berlin situated at the Hackesche Market for its DIFA Spezialfonds for an undisclosed sum.
The property, originally built in 1888, was completely refurbished in 2010 and comprises 3,140 square meters of rental space.
Union said the property as fully let, to Mercator Foundation and the European Climate Foundation, among others.
For the deal, Union used Frankfurt-based realtor Immologie as a consultant, while the private seller used the Frankfurt-based law firm HauckSchuchardt.