Spezialfonds with German focus return 3.5% on average

IPD Investment Property Datenbank in Germany has just published its latest Performance Study on Real Estate Spezialfonds (SFIX) 2012. It shows that total returns on real estate Spezialfonds with a focus on German properties averaged 3.5% per year between 2010 to 2012. European-focused funds dragged down the performance of the overall SFIX index to 2.1% in 2011 and 1.7% for the full year 2012 -  projected from available figures from the first three quarters of the year.

The results of the study showed however, significant differences between individual funds in their respective investment regions.

According to Daniel Piazolo, managing director of IPD Germany in Wiesbaden, “The 44 property funds with a German investment focus achieved 3.7% annualised return in the first three quarters of 2012, outperforming European funds.”

“Funds invested in European locations outside Germany, which form the SFIX Europe sub-index, have earned 0.6% so far in 2012, on an annualised basis. Over the entire history of the index from January 2007 to September 2012, the annualised total return of the SFIX headline index is 3.1%, whereby European funds generated2.6% and funds invested predominantly in Germany returned 4.8%.„

Over the period 2007 to Q3 2012, funds with a German investment focus recorded their highest returns in 2007 at 8.3%, and their weakest returns in 2009 at 2.6%. However, the range of individual fund returns in each of the six years has been considerable. The range of the middle 50% of fund performances varied from 4.3 percentage points in 2007 to 3.1 percentage points in 2010. In the years 2007 and 2008, the index value significantly exceeded the median fund performance, indicating that in those years large funds - whose returns have a relatively large influence on the SFIX index - generally performed better than smaller funds.

“Spezialfonds have massively gained in importance in Germany over the past decade”, says Piazolo. “Meanwhile, the aggregate net asset value of Spezialfonds and public funds for institutional investors has reached approximately €46 billion. Due to the large number of Spezialfonds and the high level of coverage of these funds by the SFIX index, analysis of the distribution of fund returns provides valuable insights into the breadth of performance in the industry. "

The market coverage of the SFIX index is 60%, with 110 funds and €27.5 billion of net asset value under analysis.