GERMANY - International Real Estate (IRE) has ruled out expansion outside German property despite recent investor jitters over market underperformance.

This vote of confidence came as the AIM-listed investment firm posted year-end pre-tax profits of €16.8m, up from €4.8m the previous year, while IRE’s assets increased to €34.5m from €24.3m in the same period.

"There are a lot of good opportunities still to be found in the market," said CEO Daniel Akselson.

He ruled out expansion into Central and Eastern European markets.

"The German market offers the best possibilities now," he said. "We don’t know the languages and we don’t understand the system, so we’d need a good local partner. It isn’t out of the question, but it’s not in our plans."

The group will increase its emphasis on adding value to acquisitions aimed at improving rental.

Akselson said the firm’s focus would remain on residential, which makes up the bulk of the firm’s portfolio, with commercial an incidental component in mixed-use assets.

IRE plans to increase its residential portfolio with €32m raised in a two-tranche bond issue in May.

In the meantime, he sees no end to pension funds’ enthusiasm for the market.

Asked about sustainability of investor enthusiasm.

"I wish I knew – but it won’t end overnight," he replied.

IRE’s confidence in the market contrasts with US group Cerberus’s announcement in recent weeks it would sell 20,000 former trade union flats for €1bn. The private equity firm said investors were losing patience with the under-performing market.