First quarter total returns for German institutional and retail property funds were 0.3% and 0% respectively, says international performance measurement firm IPD. In both groups, vehicles invested in Germany substantially outperformed European-targeted funds for the period.
German institutional Spezialfonds focused on the domestic market, worth some €11bn, returned 1% in first quarter and 3.4% over the past 12 months, while those with a European focus, worth €18.5bn, only returned 0% and 0.3%. In the open-ended sector, German-targeted funds reached first quarter returns of 0.5% while Europe-focused vehicles were flat, though improved from a negative 0.3% over 12 months.
Among the 13 European open-ended funds measured, eight have entered liquidation, while none of the five Germany funds are in this position. All those in liquidation have so far shown poor returns. “Since the beginning of the German retail fund crisis, those funds that went into liquidation have shown weak performance,” said Daniel Piazolo, IPD Germany’s managing director. “However, European allocated funds for institutionals have performed equally poorly, and for them there is no significant liquidation problem.”
IPD also found that European funds are predominantly invested in office assets, while sector allocation for German-focused funds is more diverse and includes retail, logistics, hotel and health care. As office properties posted weakest sector performance, the outperformance of the German funds is thus partly attributable to their broader diversification, IPD said. It receives quarterly data for 152 German funds with a net asset value of €105bn, and produces the performance indices SFIX for German Special Funds and OFIX for German open-ended funds.