German open-ended funds to sell off further €9b by 2017

The liquidation of German open-ended funds will continue to offer investment opportunities across Europe through 2017, according to research by Cushman & Wakefield.

C&W said €1.7 bn of property assets were sold by GOEFs in liquidation in H1 2015, following a record volume of €5.1 bn in 2014. A further €9 bn will be sold by end-2017, mostly in Germany, the Benelux and France.

The discount to book value of liquidated assets fell to 4% in 2015, compared to 13% in the previous year. The variation across markets was considerable, with assets in the UK achieving a premium of 46%, compared to an average discount of 26% for Benelux properties.

GOEFs hold €82 bn of property assets worldwide, 12% of which is due to be sold by 18 funds entering their liquidation phase in the next two years. German assets account for 31% of the €9 bn due to be sold, with the Benelux making up 26% and France 18%.

The liquidation of GOEFs has provided the market with €14 bn of sales since 2012. More than half the asset volume traded in H1 2015 was located in Germany (€910 mln), with the UK accounting for a further €500 mln. Sales activity outside these core markets fell sharply from €1.9 bn in each of 2013 and 2014 to €250 mln in the first half of the current year.

Magali Marton, head of EMEA research at Cushman & Wakefield, said: ‘German open-ended funds have clearly benefitted from the current booming investment market in Europe and therefore have managed more successfully their assets sales in 2015 so far.

‘We expect sales to grow in the rest of the year and in 2016 and GOEFs should continue to demonstrate some proactivity in their liquidation process in order to optimize their sales prices strategy. They still hold €9 bn of assets across the region with a large part located in Germany, the Benelux and France.’