German fund investors play local game in H1 – IPD

Investors in German institutional property funds continued to favour domestic real estate in the first six months of 2014 with a preference for retail and diversified portfolios, the latest IPD/BVI German Quarterly Spezialfonds Index (SFIX) results show.

‘Funds focussed on German retail properties and German diversified portfolios showed strongest growth, while the majority of European focussed vehicles remained constant. Investors continue to favour German properties and avoid pure office portfolios,’ said Justus Vollrath, executive director and head of DACH (Germany, Austria and Switzerland) at IPD.

German institutional property funds produced a total return of 0.5% at the fund level (NAV) in Q2 2014, according to the SFIX. Those funds with an investment focus on Germany returned 1.1%, substantially outperforming funds with a European focus, which returned 0.0%.

In the first six months of 2014 the performance of all SFIX funds was 1.0%, up from 0.7% between Q3 2013 and Q4 2013. The sub-index for funds mainly invested in Germany stood at 2.4%, up from 1.9% in the previous half-year period. Funds with a European investment focus improved their returns to -0.1% from -0.3% in the second half of 2013.

The IPD/BVI German SFIX index includes 157 funds with a net asset value of €36.1 bn.