EUROPE - A Swiss specialist for indirect real estate investment sees institutional investors going into listed real estate rather than real estate Spezialfonds.

After the financial crisis, the German government had to change the regulations on open real estate funds (OIFs) to keep funds from having to close for liquidity issues in future.

Under new regulations to come into force in 2012-13, large investors in such funds will have to observe a 24-month holding period.

Most asset managers agree that this will make OIFs less attractive for institutional investors.

Recently, CBRE predicted investors would move into real estate Spezialfonds instead.

However, Claudia Reich Floyd, real estate securities fund manager at the Swiss 4IP Management, begs to differ.

She sees Spezialfonds as too similar to closed funds and lacking enough liquidity to be a good alternative.

"Real estate equity funds investing in listed REITS, which have so far received little attention in Germany, are the much better alternative," she told IPE's German joint venture Institutional Investment.

Reich Floyd also dismissed correlation as one of the arguments brought forward most often against listed real estate.

"The fact is, real estate equity is very closely correlated to the equity markets in some market phases," she said. "But, in any case, correlations to equities are decreasing with longer holding periods."

The European Public Real Estate Association also recently forecasted a significant growth in listed real estate in Germany.