German institutional investors are increasingly switching billions of euros invested directly in real estate into property funds in an accelerating trend, INREV, the European industry body representing investors in non-listed real estate funds says.
"It is clear that a major trend is underway with German insurers and pension funds increasingly choosing to invest indirectly in real estate though nonlisted funds rather than directly in buildings, both abroad and also in their home market," Dr. Georg Allendorf, Managing Director at RREEF Alternatives in Germany and Vice-Chairman of INREV's Management Board commented. "While it is difficult to quantify this through available data, it is apparent anecdotally what is happening. This is based on feedback from our German members and also the strong demand for INREV services from Germany, in terms of higher professional standards and investment transparency for these funds," he said at an INREV seminar in Frankfurt.
INREV's German membership has nearly doubled in the past 17 months to 34 -- from 18 at the start of 2007 -- out of a total membership of around 300, including investors, fund managers and service providers. "Institutional investors are investment managers not building managers. By investing in real estate through fund vehicles they can manage their portfolios more efficiently, save costs, and achieve better diversification in investment assets," INREV Chief Executive Lisette van Doorn said.
A total of about