Majority of close-ended real estate funds do not meet initial objectives

More than half of all close-ended real estates funds offered on the German market did not meet their initial objectives. This is the result of a study by FondsMedia. Furthermore, only one-third of all funds performed better than planned. In total some 1,200 close-ended funds were researched with a total investment volume of EUR 33 bln.

Also in terms of transparancy close-ended funds did not perform very well. Less than one third published its result. The average result of 2.5% was very disappointing.

FondsMedia director Peter Kastell explained that this result is even worse than in the direct real estate investment market, where, depending on market and region at least somewhere between 4% and 7% yield is considered normal.

Of all investments, these close-ended funds invested some 80% in Berlin and in former East Germany.

(source: Immobilien Manager)

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