Listed sector is largest indirect property owner in Germany

The listed sector is the largest owner of indirect real estate in Germany, with closed-end and open-ended funds in second and third place, according to new research backed by ZIA, the German Property Federation.

Listed property companies own €67.6 bn of real estate in Germany, of which €57.9 bn is held by German companies. Measured on the basis of total German real estate owned, this makes publicly listed real estate companies the most significant investor group among Germany’s indirect investment vehicles.

Indirect investment vehicles include German open and closed-end funds, REITs and other publicly listed property companies. Compared to the listed sector, open-end real estate funds hold about €25.7 bn of German real estate, while closed-end real estate funds manage €43.1 bn.

These are the main results of the research which was conducted by ZIA, Barkow Consulting and Akselrod Consulting.

'Listed property plays a much more significant role in German real estate markets than previously thought. Under-estimation has largely been caused by lack of adequate data: aggregate portfolio statistics for the German holdings of listed property companies has simply been unavailable to date. Our study aims to bridge this gap in real estate market transparency,' said Peter Barkow of Barkow Consulting.

'Measuring the publicly listed sector solely based on market capitalisation, as has been common in the past, is like comparing apples and oranges,' said Alexander Dexne, chairman of ZIA’s listed real estate platform. 'Knowing the significance of publicly listed property for the German real estate sector, politicians will obviously need to take a closer look at future regulatory plans. Adequate regulation of financial markets, for example, is of the essence. If listed property companies are regulated too rigidly, however, stability of German real estate markets could be endangered.'

Residential assets account for 77% of total real estate gross asset value for listed property companies. A more differentiated analysis shows that open-end real estate funds own more than 2.5 times as much office real estate as listed property companies. 'Compared to other countries, the German listed property sector exhibits significant growth potential in office real estate markets,' Dexne added.

The full report 'The significance of publicly listed property companies for German real estate markets' is attached below.