German fund manager Deka Immobilien expects that open-ended real estate investment funds will be invested almost exclusively by private investors in the future. In a statement on Tuesday, Deka said institutional investors are likely to shun open-ended funds and start focusing on funds tailored for their investment needs.
German fund manager Deka Immobilien expects that open-ended real estate investment funds will be invested almost exclusively by private investors in the future. In a statement on Tuesday, Deka said institutional investors are likely to shun open-ended funds and start focusing on funds tailored for their investment needs.
'The market conditions in 2010 have mercilessly exposed the weak points of some open-ended property funds. The number of providers of traditional open-ended fund products will be reduced to single-digit levels,' said Matthias Danne, real estate board member at DekaBank.
Net inflows in Deka's open-ended funds continued to increase in 2010 mostly driven by large demand from retail investors. DekaBank saw net cash inflows of EUR 1.6 bn last year, EUR 1.1 bn of which were for Deka's three open-ended property funds for private investors while just EUR 500 mln were for its institutional products.
The company made EUR 2.4 bn worth of acquisitions in the course of 2010, representing 27 properties. It also sold 16 assets for a total of EUR 800 mln in 2010. 'For 2011 we plan to acquire smaller properties for our institutional funds, therefore we expect a reduction of our acquisition volume and a higher amount of transactions.'
