GERMANY - Institutional real estate investors are forecasting returns of between 4.6% and 5.2% for German property this year, according to IPD.

More than half of respondents to IPD Investment Property Databank's survey cited a figure somewhere within this total return range, while some even predicted returns as high as 6.8%.

The lowest expectations were at 2.7%.

This is the fifth survey IPD has done among German institutional investors investing in real estate. It said the forecasts had so far deviated between 0.2% and 1.3% from the actual DIX-results

IPD managing director Daniel Piaolo noted that market participants' "prevailingly realistic" assessment of the return potential of the German property market had become a "reliable indicator of whether the market can expect a positive or a negative trend".

He added that the 2011 prognosis showed cautious optimism, but that market participants neither expected significant increases nor decreases in value.

For the two components making up the total return, IPD noted that the net cash flow return had been 5.1% for 2010, while the revaluation return had been -0.8% over the last year.