GERMANY - Germany's implementation of the Alternative Investment Fund Managers Directive (AIFMD) might not spell the end of real estate Spezialfonds after all, according to real estate association ZIA.

Growing fears that government proposals to prohibit open-ended real estate funds under AIFMD would make it through to law unchanged have been allayed, following a hearing with the real estate industry.

"The politicians take our concerns seriously - the law will not come into effect in its current form," said Andreas Mattner of ZIA in a statement.

In its current form, the draft bill would ban open-ended structures for real estate funds, including Spezialfonds, effectively prohibiting German insurance companies. Industry representatives now expect changes to the bill.

Mattner said that the association would continue talks to "prevent collateral damage for the real estate industry".

The ZIA wants to keep both the open-ended real estate Spezialfonds as well as the German open-ended real estate funds (GOEF) alive, many of which had to be dissolved following liquidity problems during the crisis.

According to ZIA, politicians were themselves critical of the bill, pointing to the fact that the new regulations for German open-ended funds, including longer holding periods, have not yet come into effect.

ZIA has also joined forces with other real estate associations in Germany to create a new entity, the federal working group for the real estate industry (BID).

Details of the new working group will be presented at the Expo Real trade fair in Munich in October.

A BID spokesman said BID was created to "speak with one voice in Brussels" on EU issues.

The institutional real estate market in Germany continued to show growth with closed-ended real estate fund specialist Project the latest to start offering real estate investments to institutional investors.

The company will be renamed Project Investment Group and launch a subsidiary for the institutional business by the end of the year.