The 19 German open-ended real estate funds have together invested EUR 9.3 bln between June 1, 2001 and May 31, 2002. No less than EUR 6 bln of these investments were abroad, according to the BVI Bundesverband Deutscher Investment- und VermÃ¶gensverwaltungs-Gesellschaften e.V. The institutional investors thus used a large part of their total availible funds of EUR 14.2 bln to expand their real estate portfolio.
Due to the long and difficult selection process new capital influx only gradually is invested in real estate. As in real estate investments the object is unique (location, architecture, state of the building, application), the thorough check by the investment company is of the utmost importance. Each object is carefully checked in terms of leasibility and its long-term value creation potential.
Almost two-thirds of all investments (EUR 6.0 bln) were done outside Germany. This relative high share illustrates the importance of international real estate locations. Especially in light of the many investment possibilities - noticeably abroad - in increase in high-quality open-ended real estate funds would be welcome, according to the BVI.
The Fourth Financial Market Demand Law, which became effective on July 1, 2002, substantially increases further investment possibilities in open-ended real estate funds. The old limit of 20% for investments in the Euro-zone was lifted. Therefore, the BVI believes that a further increase in real estate investments in the Euro-zone or in global markets for that matter, is very likely.