Despite the war in Ukraine, inflation and supply chain disruptions due to the pandemic, institutional investors committed more funds, on balance, to German open-ended institutional property funds in 2022 than 2021, according to new figures released by Intreal.
The investment manager, quoting figures released by the Bundesbank, revealed that the net sum paid into the funds over 2022 totalled €15.2 bn.
This equals an increase of around 8.0% compared to 2021, when inflows totalled €14.1 bn. In 2020, the total was only €10.5 bn.
The net fund assets of open-ended institutional property funds grew from €154.2 bn by the end of 2021 to €173.5 bn, an increase of €19.3 bn as of 31 December 2022.
Michael Schneider, managing director at Intreal, commented: 'The Bundesbank stats show that institutional investors keep investing in real estate even and especially in a difficult environment.
'This is surely to some extent explained by the fact that other asset classes such as equities and bonds experienced a much more volatile performance in 2022. The high level of continuity characterising the income distributions paid by property funds are probably another key argument for investors.'
The net cash inflows of €15.2 bn reflect the balance of inflows and outflows. In fact, the inflows from share certificate sales as such were even higher in 2022, totalling €19.1 bn. This means that outflows amounted to €3.9 bn.
Schneider added: 'I rate the outflows to the tune of about €4 bn as manageable when considering the various adverse market developments – especially when putting them into context with the total net fund assets.
'However, I expect the net cash inflows during the year 2023 as a whole to be lower. The sense of uncertainty, prompted not least by the ongoing recalibration of the relevant “new” property yield rates—and the associable wait-and-see attitude—is still very pronounced among many institutional investors, which has a dampening effect on inflows.'
In the institutional property fund segment, Intreal has now become Germany’s biggest alternative investment fund (AIF) management company. The net fund assets of all open-ended institutional property funds managed by the firm totalled €22.2 bn by the end of 2022, according to the BVI Federal Association for Investment and Asset Management.
This translates into a market share of about 14% of the overall market, which BVI says was worth €156 bn as of 31 December 2022.
Intreal also logged a record €2.7 bn of inflows for its investment funds, 20.6% of all vehicles, according to BVI data.
