FINANCE: The liquidation of €12.8bn (£9.1bn) of German open-ended funds by 2017 will keep asset discount levels high after book values saw a record average cut of 20% in 2014, according to research from DTZ.
The sixth biannual DTZ Insight report into German Open-Ended Funds reports that €3.3bn of property assets were sold by liquidating open-ended funds in 2014 with record levels of discount to book value.
Sales in the Nordic regions were particularly sharply discounted with a 29% reduction on book value, according to the report, followed by assets in central and eastern Europe at a 26% discount.
Magali Marton, head of EMEA research at DTZ, said: “The biggest discounts were recorded for the most urgent disposals from funds that were set to be liquidated in 2014, but we also saw some long-term liquidation in specific countries within southern Europe, CEE and Benelux. Numerous sales occurred in Germany in 2014 at 14% below their book value, up from 8% just a year ago as many sales occurred in non-prime locations.”
German open-ended funds still hold more than €81bn of assets, the report claims, with €11.7bn held in Europe due for disposal as 18 funds liquidate before 2017.
Most of the asset disposals will come from the German, Benelux and France, DTZ estimates.
Although the volume of sales is expected to be below those of the past two years, the size of the liquidations should still keep discount levels higher than in 2012 when the market saw an average 3% discount on book value.
