Aberdeen plans triple institutional property fund launch

Aberdeen Immobilien is planning to launch three institutional property funds as the outlook for the German real estate sector begins to improve.

The German firm’s managing director Hartmut Leser says there is a ‘very high probability’ the funds will be launched in the next couple of months as market sentiment seems to be improving, with the option of launching a maximum of five funds.

Over the last few months Leser said he has been in touch with many institutional clients and has been encouraged by their feedback.

‘I think that most institutional investors are quite positive on the outlook for the European property, especially when it comes to Germany,’ said Leser.

Two of the planned funds will be focused on the pan European property sector, mainly offices and retail units, while the third fund will focus on the German residential market.

Urban properties in the country’s main cities will be the third fund’s main investment segment as Leser believes it offers the best opportunities in Germany’s recovering real estate market.

Leser said the residential fund has already received interest from a large German pension fund which is ready to put up an initial investment.

The choice to launch institutional rather than retail funds comes down to the amount of control the group will have over any possible redemptions, according to Leser.

‘We don’t want to launch new retail funds and then close them soon after. The main difference with the retail side is that we can’t really control retail investors but we can talk to small groups of institutional investors. It creates a more predictable situation for us.’

The director also discussed the fate of his firm’s three real estate funds,  institutional funds DEGI Global Business and German Business and retail fund DEGI International, all three of which are still closed to investor redemptions.

‘The DEGI International fund has been closed for a while now and when we review it in November we will be in a very similar situation as we were with Europa,’ said Leser.

The €1.3 billion DEGI Europa fund was liquidated in October last year after being closed since November 2009. Although Leser is hopeful this will not occur with the International fund it remains a possibility when the fund reaches its established reopening date this November 'if we know we won’t get massive redemptions then we will reopen it,’ he said.

The future of the Global Business fund will also be decided in November but Leser said he has already received a ‘fair amount of support’ from its institutional clients for the firm to reopen it. The German Business fund’s closure will also be reviewed in November, he said.