AUSTRIA - The financial crisis has prompted Austrian pension fund VBV to view real estate investing as more risky and tactical in nature than previously assumed, and requiring a more flexible allocation policy.

Guenther Schiendl, CIO and member of the board at VBV, said the fund had been "forced to see real estate somewhat more like equity investments, with a higher degree of price risk".

"We see real estate as more risky than we did pre-2008," he added.

Schiendl explained that real estate investments past were in the past often based on the assumption of stable valuations - a concept that has been derailed during the past 18 months.

This has led VBV to view real estate investments as "more tactical in nature" than it might have done previously.

"The time horizon in real estate has become somewhat shorter, because the kind of stability we used to expect from real estate investments has not been delivered," said Schiendl.

He suggested the pension fund may be more inclined to look to assess real estate, for example, in three- to five-year timeframes as opposed to periods of 10 years.

"It also leads us to the conclusion that real estate allocation is not necessarily a permanent allocation," he added.

"It is an allocation that changes as the general financial markets change."

The pension fund is looking to make new real estate investments in the future, but Schiendl said the challenge was finding the right time to commit capital again.