German open-ended real estate funds are expected to pay an average return on investment of 3.5% in 2009, according to Feri EuroRating Services. Feri's analysis of 33 German funds suggests the returns are likely to range from 2-5%.
German open-ended real estate funds are expected to pay an average return on investment of 3.5% in 2009, according to Feri EuroRating Services. Feri's analysis of 33 German funds suggests the returns are likely to range from 2-5%.
'We assume that the property portfolios of the funds will not suffer major depreciations,' said Wolfgang Kubatzki, Head of Real Estate at Feri. 'While it is true that sales prices on the real estate markets have fallen worldwide, this does not impact the valuation of fund property, and with it the fund performance, except in softened form and subject to delay.'
He said open-ended real estate funds manifest a remarkably resilience in times of crisis compared to other asset classes. 'Over the past ten years, open-ended real estate funds have clearly outperformed European stocks, and have matched the performance of bonds.
'The difference is that the volatility of open-ended real estate funds is comparatively low at the same time. The above-average returns of these real estate funds remained above the inflation rate throughout the entire period,' Kubatzki added.
