German real-estate mutual funds may invest as much as Euro12 billion (Bt590 billion) in the next two years as cash levels rise and falling prices make properties more affordable, CB Richard Ellis Group said.
The 47 open-ended funds available to German savers have about Euro7.5 billion of cash or equivalent assets available to spend immediately on real estate, according to a report published by the Los Angeles-based property broker's London research team. That may rise by Euro4.5 billion if debt is included and cash keeps coming in at current levels, it said.
German savers, attracted by an average annual return of 5 to 6 per cent, poured Euro3.04 billion into the funds in the first eight months of the year, according to the nation's asset-management body, BVI. The funds made about Euro1.65 billion of acquisitions in Europe during the first nine months, taking advantage of two years of falling property values, CB Richard Ellis estimated.
"Many funds see this as an opportunity to re-enter the markets from which they ahve recently been priced out," Iryna Pylypchuk, an analyst at CB Richard Ellis, said in the report. "Paris can be singled out as one of the markets to attract particularly high levels of interest at the moment."
Union Investment Real Estate, owned by the country's cooperative banks, said on September 25 that it had bought French investment bank Natixis's headquarters building in Paris for Euro177 million. Two days earlier, Commerz Real said it had paid Euro72 million for the base of PPR SA's books and music retail unit. FNAC.
Those two asset managers, along with DEKA Immobilien Investment, are the most active, with about Euro6 billion between them to spend, CB Richard Ellis estimates.
The dunds favour hotels and shopping centres and are also increasing the size of their investments in properties to about Euro100 million in the third quarter from Euro65 million in the first half, the property adviser said.
Sunday, October 11, 2009
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