Allan Saunderson is managing editor of Property Finance Europe and a contributor to GlobeSt.com.
FRANKFURT-German open-ended real estate funds boosted foreign investment to 70.3% by the end of March from 68.6% a year earlier, says the federal investment funds association BVI.
Most of the climb came outside Europe, in particular the US, Japan and Canada where holdings rose to around 12.3% of total AUM from 9.7% a year ago. Despite the apparent enthusiasm for London office of recent months, the UK share of OEREFs' AUM slid to 9.5% from 11.5% a year earlier, the largest geographical slide of all.
Over the last 12 months German OEREFs bought or sold 214 real estate assets, with some €9.5 billion in volume purchased – of which €7.8 billion abroad - and just €800 million sold – of which half domestic and half foreign. The funds, in aggregate, bought 12 assets in Japan over the last 12 months, precisely doubling the share of the nation in total AUM to 3.1%.
BVI said the diversification of geography has been helpful to the open-end fund community at offsetting the worst of the downturn in the economic crisis. Around two-thirds of the total 1,588 single assets held in the sector have a market valuation of below € 50 million, and 630 show a value of under €25 million. In terms of asset class, some 64.6% of total comprised office properties at the end of March, a slight drop from 66.3% 12 months earlier. Retail and gastronomy rose fractionally to 19.5% from 18.3%, while hotels and other diverse asset classes made up some 15.8% of total AUM.
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