Aberdeen launches German property fund

Aberdeen Asset Management has launched a German residential property fund in order to capitalise on increased investor demand and the growing strength of the rental market.

The ‘Städte und Wohnen’ fund, which will be managed by Daniel Dreyer, has been launched with initial seed capital of €115 million.

Aberdeen said it had launched the fund in order to capitalise on the increased demand for indirect investment in German residential property from institutional investors.

The firm added demand in the German rental market has grown considerably in the major cities, which is set to see a number of former military and industrial buildings converted to residential properties.

As the fund grows, Aberdeen intends to invest around €1 billion into German residential property through the fund. This marks the third dedicated property fund to have been launched by Aberdeen since 2010.

The timing of the fund launch follows hot-on-the-heels of an ongoing debate over the use of open-ended property funds in Germany.

It was announced in July that the upcoming AIFM Directive could lead Berlin to include a ban on the launch of new open-ended real estate fund and real estate Spezialfonds in Germany.

In response to this, German trade association BVI issued a stark criticism of the directive, stating this measure would hurt small investors and force asset management companies to register their funds in Luxembourg or Dublin rather than Germany. 

Dedicated property funds have had a difficult period as late, with recent Citywire Global analysis highlighting how none of the 30 fund managers with a three year track record have outperformed the most commonly used benchmark over this period.