GERMANY – Oppenheim Immobilien-KAG, Germany’s leading provider of property funds for institutional investors, plans to invest €1bn in new properties in 2006, 30-40% of which will go to retail stores, according to OIK chief executive Siegfried Cofalka.
In an interview with Germany’s Börsen-Zeitung, Cofalka said OIK’s acquisition of retail store property would be mostly taking place in the US and Europe, though some deals would be in Germany.
He added that a similar level of investment in retail stores – that is between €300m and €400m – was planned for 2007.
Although OIK is investing a total of €1bn in new properties this year, it also aims to sell between €500m and €600m worth of objects. In fact, during the first quarter, OIK sold more properties than it acquired, prompting €30m in net outflows from its funds.
However, Cofalka told the newspaper that this was to be expected, as “numerous investors shift their money out of our funds to other asset classes until we again find lucrative properties”. For the full year, OIK’s CEO expects net inflows of between €400m and €500m.
OIK, a joint venture between IVG Immobilien (50,1%) and German private bank Sal. Oppenheim, has nearly €10bn in institutional assets under management, making it the market leader in Germany.
Turning to the current market situation, Cofalka noted that amid rising interest rates, it was becoming more difficult for property funds to find attractive objects in Europe. Citing London as an example, he said: “Even there, deals are being made where the return, at 4%, is below what investors are getting with British bonds.”
Finally, Cofalka said OIK planned to roll out a new institutional fund that invests in Asian properties in the second half of 2006. In setting up the fund, OIK is currently negotiating with two unnamed Asian partners who would assist with the selection and administration of the properties.
The German provider aims to take in €1bn in assets with its new Asian fund by the end of 2007.