The liquidation of German open-ended property funds, which enraged investors stuck in frozen portfolios, is creating a €20bn opportunity for commercial real estate investors as the portfolios put their holdings up for sale, says managers DTZ.
HansaInvest plans to sell its holdings and liquidate in just six months, and if it cannot sell properties in that time, it will sell them to one of the spezial funds at HansaInvest.
Other funds such as KanAm Grundinvest have given themselves longer, and have divided their properties into four categories – ready to sell, ready for sale once finance is matured, ready to sell after improving attractiveness, and finance must mature and buildings must be worked on.
Germany is acting to stop a repeat of the crisis.
A new law will limit leverage to 30% of the market value of properties a fund owns, not 50% as before. It will also make mandatory an irrevocable written notice of 12 months for returns of capital of €30,000 or more per six months.
The market was dismayed when it seemed the government’s implementation of the EU’s Alternative Investment Fund Management Directive would ban new open-ended property funds being created.
But Alexander Schindler, head of institutional business at Union Investment, told delegates at Investment Europe’s Frankfurt Fund Selector Forum this week he is now hopeful there would be no ban.
For more on this, see the website on Monday.