Managers of German open-ended real estate funds (GOEFS) are in favour of a 12-month holding period for new investors to help tackle the liquidity crisis that has plagued the industry in recent years.

Managers of German open-ended real estate funds (GOEFS) are in favour of a 12-month holding period for new investors to help tackle the liquidity crisis that has plagued the industry in recent years.

The measure is one of the joint proposals by GOEF managers that German fund association BVI presented last week.

'This holding period for new investors highlights the fact that property is a long-term investment,' BVI director general Stefan Seip said in a statement. The period would be regarded as elapsed for existing fund investors.

The BVI members favour a standard notice period of 12 months for institutional investors and agree there should be no restrictions on savings and withdrawal plans, with 'appropriate liquidity levels' ensuring servicing of withdrawal plans even when redemptions are suspended.

Under the proposals, GOEF units would continue to be available to normal private investors on a daily basis after the initial holding period. The industry body is also suggesting valuation of properties should be carried out by independent experts every six months, instead of the current yearly intervals.

A number of GOEFS are currently locked up to prevent damaging outflows as investors seek to exercise their rights to withdraw money from the funds at any time. The list of funds that have frozen redemptions includes Morgan Stanley's P2 Value, the Degi International and Europa funds, Axa Immoselect, Kanam Grundinvest, and SEB Immoinvest.

The German government is currently considering proposals which would compel investors to hold their units in the funds for at least two years, and extend the waiting periods for redemptions.