German Open Funds Have €12B Spending Potential

Allan Saunderson is managing editor of Property Finance Europe and a contributor to GlobeSt.com.

MUNICH-Liquidity levels in German Open-Ended real estate funds have started to pick up recently, which could mean as much as €12 billion in new investments over the next two years if inflows continue as expected, says CB Richard Ellis. GOEFs currently hold around €18bn in cash or immediately liquid assets, which translates into up to €7.5 bilion more spending power.

But not all funds are in equally strong positions. Liquidity is especially high for three fund managers: Union Investment; DEKA–including WESTINVEST and Commerz Real–which between them have over €6 billion to spend immediately. Following the reopening of many funds in summer, net inflows to the sector were €326 million in August, according to the German Industry Assoc. (BVI). This is very encouraging, after net withdrawals in July of over €400 million, due to one-off redemptions from the newly-reopened funds CS EUROREAL and KanAm grundinvest.