Managers of open-ended real estate funds are optimistic about 2023 despite concerns

Dusseldorf The trend reversal on the real estate market in 2022 also hit real estate funds hard. Inflows into open-ended mutual funds fell significantly in Germany compared to the previous year, and in the USA several funds even had to limit their payouts, including the multi-billion dollar real estate fund of the US investment company Blackstone.

In Germany, some experts like Sonja Knorr from the rating agency Scope fear that the worst is yet to come for the industry. Due to the underlying valuation methods of the real estate in the funds, possible price reductions could only arrive with a delay and, in contrast to real estate shares, which have lost significantly since the beginning of 2022, may not yet be priced in.

However, Michael Schneider from the fund provider Intreal emphasizes the stable performance of open-ended retail real estate funds in 2022 compared to equity and bond funds. “According to the Bundesbank, the net fund assets of real estate funds grew by 5.2 percent between January and November 2022, while equity funds fell by 10.5 percent and bond funds by 17.5 percent.”