GERMANY - HypoVereinsbank's real estate investment subsidy iii-Investment has launched a new Spezialfond, aiming to raise €400m worth of capital.

The news comes as the German investment and asset management association BVI confirmed the first seven months of 2010 had seen the strongest inflows into Spezialfonds since 2007.

The new Spezialfond will concentrate on core and core-plus strategies, with a focus on prime office and retail space, both in existing and new developments.

It aims for a debt ratio of 50%, with iii's property team already examining assets in Belgium and France.

Stefan Janotta, the company's head of research, said: "Considering the current price level, the CBD of Paris is attractive, mainly due to our expectations of rental growth within the next few years."

Janotta added that Lyon, Marseilles and Brussels were being examined as possible investment targets, as these locations, unlike the CBD of Paris, offered higher initial yields.

"In relation to the government bond yields of the respective countries and their rental growth prospects, these markets offer attractive investment opportunities," he added.

The German Spezialfond market recovered to 2007 levels in June and has continued this growth into July, according to new figures by the BVI that show overall market inflows of €43.3bn, while overall assets invested now exceeded €1.7trn at the end of July.

However, while equity funds have seen great fluctuations in the levels invested, open-ended real estate funds have seen their assets remain relatively stable since July 2008, never fluctuating more than 2%.

In fact, open-ended real etate funds were only one of four funds that saw overall assets increase between the onset of the crisis in July 2007 and the same period a year later.