EPRA vows to 'liberate' German property market

The European Public Real Estate Association (EPRA) has vowed to continue its campaign to grow the undersized listed real estate sector in Germany.

Listed companies account for about EUR 10 bn in Germany, or only 1.6% of the underlying real estate market. This compares to almost 6% in France and 4.2% in the UK. The European average is about 3%. 'This should not be the case for the largest economy in Europe,' CEO Philip Charls told the EPRA Insight event in Amsterdam last week.

The real estate sector in Germany is dominated by German fund managers. They manage German open-ended property funds (GOEFS) which have about EUR 100 bn of assets under management, with a further EUR 50 bn in spezialfonds.

Charls pointed out that about EUR 25 bn of GOEF AUM is currently closed for redemption. 'It is an unclear product and it is quite often sold by misrepresentation vis-à-vis the customer.'

'We want to make clear that there is a way to live together to develop a proper listed sector and have the GOEF sector as it is. It is an uphill fight because the grip of distribution - the banks - is very strong. They make a lot of money selling GOEF units, a lot of money in managing them and they have very strong ties with the political system.'

While conceding that EPRA would remain an outsider, Charls said he was 'sure' that this was the right way to go forward. 'We are very excited that a lot of investors have already said they will be our allies and will be behind us to try and liberate the German market.'

Charls provides a forecast for the listed sector for 2011 in the February edition of PropertyEU Magazine. Click on the link below to subscribe.