12. Februar 2013     Print Print 

Strong market growth follows stable returns in German real estate funds

In the last three months of 2012, the quarterly performance of all funds in the IPD/BVI German Quarterly Spezialfonds Index was 0.5%, up from 0.2% in the third quarter. The sub-index for funds mainly invested in Germany stood at 0.8%, substantially higher than for funds focused on European markets, which registered 0.1%. German institutional property funds produced a total return of 1.8% at the fund level (NAV) in 2012. Funds with an investment focus on Germany substantially outperformed the market, with an annual return of 3.5% as against 0.6% for funds with a European focus. These are findings of the latest quarterly report by IPD, for Q4 2012, and the year 2012 as a whole.

"Over the whole of 2012, funds with a specialisation in retail property outperformed funds focused on offices, while German-focused funds consistently outperformed those focused on the rest of Europe,” said Daniel Piazolo, Managing Director of IPD Germany.

In comparison with other asset classes, the SFIX Index underperformed during the fourth quarter. The strongest performance was for equities at 5.9% (MSCI DE), while bonds (JP Morgan GBI Global, DE 7-10 years) also provided higher returns than German indirect real estate, returning 1.9 %. However, the moderate returns from Spezialfonds have been accompanied by low return volatility during the recent economic crises. While the annualised return volatility of the SFIX between 2007 and 2012 was 0.9%, equity and bond returns fluctuated much more, with volatilities of 21.9% and 4.7% respectively.

Market growth
The latest Bundesbank figures, which cover the year to November 2012, show that the market volume of German institutional property funds, including Spezialfonds and institutional public funds, increased by more than 10% or €4.4 bn. to €47.2 bn. by the year-end. The market coverage of the SFIX index rose from €23.6 bn. in 2011 to €30.3 bn. by December 2012, which equates to a market share of 64.1%. Eight of the ten biggest investment companies are now included in the index.