4.1% return on German Spezialfonds in year to June

MSCI, the owners of the IPD group of researchers, published the latest issue of its IPD/BVI German Quarterly Spezialfonds Index (SFIX). German real estate Spezialfonds showed a return of 4.1% over the 12 months to June, ahead of their long-term averages. They were also well ahead of average European returns for the period, which were negative.

According to the latest index, unlisted real estate funds returned 0.7% in the three months to June 2015, compared with the 0.9% registered in Q1 2015.

Performance of the sub-indexes SFIX Germany and SFIX Europe continued to diverge during the second quarter of 2015. SFIX Germany returned 4.1% over the last 12 months, which is in line with an annualised 3.9% over three years and 3.9% over ten years.

The broader SFIX Europe, however, is at -0.1% over the last 12 months, but the current quarter’s result of 0.4% marks the highest quarterly return since Q4 2011.

Justus Vollrath, Executive Director at MSCI Germany commented, “In recent years, SFIX composition has changed towards domestic mandates from more European-focused ones. Between Q2 2012 and Q2 2015 the number of funds in the SFIX Europe increased from 66 to 70, worth €19.0bn and €20.3bn NAV. The number of SFIX Germany funds increased from 56 to 85, with more than 60% NAV increase from €10.1bn to €16.7bn as of today.

“However, our recent data indicates a change in this trend. In the period from Q2 2013 to Q2 2014, there were 16 new funds entering SFIX Germany, and not a single fund entering SFIX Europe. In the most recent period from Q2 2014 to Q2 2015, only five German mandates have entered the Index, while four European mandates joined in.

“The pace of portfolio build-up also seems to differ. While five SFIX Germany new entering funds comprise €480m NAV by June 2015, the five SFIX Europe mandates combine only €130m NAV as of June 2015.”

The new quarterly release of the IPD / BVI German Quarterly Spezialfonds Index (SFIX) includes property Spezialfonds regulated by the German Investment Law, together with public real estate funds for institutional investors. The index is based on a sample of 174 funds with a total net asset value of €41.4bn as at June 2015.