Four out of 10 German institutional investors surveyed by Universal-Investment said they will use a Master KVG or a Service KVG structure for their real estate investments in future.
This type of structuring, whereby all investments are pooled for administration purposes but the asset management stays separate, is already common for securitised assets in Germany.
In Germany, about 70% of assets in Spezialfonds are already administered through Master KVG structures, according to information provided by Universal-Investment.
In the real estate market, this kind of structuring has only been allowed for three years, but institutions are increasingly using it for the asset class.
According to the survey, 50% of investors expect the separation of administration and asset management to increase transparency.
Another 40% are hoping for greater flexibility because of simplified asset manager and platform selection.
“Mutual monitoring among asset managers and administrators provides for an additional control mechanism for investors,” said Alexander Tannenbaum, managing director in charge of Universal-Investment’s real estate business.
In its survey among pension funds and insurance companies with combined €6.1bn in real estate assets under management, Universal-Investment also asked which sectors institutions will be looking into in the near future.
The asset manager expects the share of office allocation in the real estate portfolios to decline from 60% to 54%, making way for retail (currently almost 11%) and residential properties (19%).
The latter will increase to 14% and 21%, respectively, while the share of hotels is expected to remain stable at 6%, and logistics will increase slightly from 5% to 6%.
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