GOEFs reopening earlier; investors seen returning - CBRE

German open-ended funds (GOEFs) are set to turn the corner earlier than expected after imposing a mass lockdown on redemptions in October last year to stem outflows, according to property adviser CB Richard Ellis. CBRE bases its claim on a number of ‘favourable developments’, including the early reopening of SEB’s ImmoInvest fund and strong inflows into the funds in April.

SEB ImmoInvest, one of the largest funds to have imposed a ban on redemptions last October, reopened at the end of May, two months earlier than the statutory nine-month suspension period. The early reopening was due to improved liquidity levels - above 20% - following the negotiation of short-notice flexible credit lines. SEB ImmoInvest reported over EUR 150 mln in net inflows over the November-April period.

The fund’s decision to reopen early spilled over into the sector as a whole, CBRE said. Overall net inflows into the GOEFs in April totalled EUR 556 mln, the highest April result for the past five years. This improved investor sentiment is encouraging the nine remaining ‘closed’ funds to consider reopening sooner than expected, CBRE said. These nine funds account for almost a third of the sector’s total value; however eyes are likely to be on the three largest: CS Euroreal A (EUR 6.8 bn), KanAm grundinvest Fonds (EUR 4.8 bn) and AXA Immoselect (EUR 3.7 bn). The CS Euroreal A fund has already reported its intention to reopen before the end of June.

Even more encouraging, CBRE noted, is that the flight of capital from the GOEFs caused by the German government guarantee of all bank deposits last October, is coming to an end. In recent months, interest rates on bank deposits have fallen rapidly and investors are returning to the GOEFs. For the first four months of the year, total inflows came to EUR 1.6 bn.