Colliers Sums Up German Open-Ended Funds

How do German open-ended funds affect Eastern European markets?

Colliers International has published a report concerning funds: GOEF – German Open-Ended Funds. This is a special group of companies investing in real estate, whose global assets by the end of 2012 were worth 83 billion Euros. Colliers analyses the impact of the liquidation of GOEF on Eastern European investment markets.

The funds under discussion are managed by brands such as Deka Immobilien Investment GmbH and Union Investment Gruppe. GOEF funds are characterised by the fact that, unlike e.g. Spezialfonds, they are available both for individual clients and investment institutions.

Within the next five years, 15 GOEF funds are going to be liquidated on account of the increasing destabilisation of their structure, caused by a conflict of interests between the groups of individual investors and institutions, as well as deteriorating economic situation on the market. German open-ended funds presently own €4.5 billion's worth of assets in Eastern Europe. Most of them are in Poland (55%), Czech Republic and Hungary. The dominant sector is the commercial real estate market – 68% of all assets.

Since 2012, 11 GOEFs declared closure in Eastern Europe. They had bought 39 properties worth €2.175 billion.

As a result of the liquidation of German open-ended funds, the number of deals will increase, mainly in Poland and the Czech Republic. However, markets will not be flooded with deals, because the liquidation will be carried out gradually.

Recently,  there has been a growing interest in Spezialfonds. By the end of 2012, the volume of their assets amounted to €35.5 billion, which is more than in 2011. Meanwhile, the value of GOEF dropped from €85.1 billion to €83.1 billion.

The funds which will not be liquidated will probably still play an important role on the core markets in Eastern Europe. Colliers supports this prognosis with three large deals made by Union, Deka and RREEF during Q4, whose total value was €600 million.

Below you will find the full version of the report in a PDF file.

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