Open-ended funds: High liquidity puts pressure on yields
Thanks to numerous property acquisitions and renewed investor confidence, the coffers of most of the open-ended funds are well-filled at present: During the past months, more than €5bn have flowed into open-ended funds. It is difficult, however, to allocate the resources at the moment, as hardly any suitable investment objects are to be found—due to price increases on the global property markets. “High demand for property is confronted with a highly-limited supply,“ says Deka-Immobilien chairman Matthias Danne in an interview with the Financial Times Deutschland (FTD). Initial net rates of return have fallen sharply worldwide. Fund managers are therefore directing their attention above all towards Asia and Southeastern Europe. But in markets such as Bulgaria and Romania, it is necessary to hurry, says CGI speaker Dietmar Müller: "The lucrative properties will sell out fast." As a rule, it is always hard to acquire "objects which are attractive and, above all, of stable value," Deka chairman Danne states. Concerning open-ended funds: Capital that has not been invested in property funds may only be put into low-interest money market products. According to an FTD communiqué, more than €23bn—over 30% of the total volume of all funds—are parked in this manner.