Open real estate fund

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The Hamburg Chilehaus belongs to an open real estate fund

Open-ended real estate funds (OIF) are open-ended investment funds that enable investors to participate in real estate with relatively small amounts . In addition to open real estate funds, there are closed real estate funds .


An open real estate fund is a real estate fund that has to be distributed over a certain number of properties depending on the fund size. Open-ended real estate funds mainly buy commercial real estate (mostly office buildings or retail properties) and try to generate income through rental income and increases in the value of the properties. The aim is to make real estate available to small investors every trading day. Since the fund units can be bought or sold at any time, the fund managers invest the investors' money not only in buildings and land, but also in interest-bearing paper or similar quickly available investments. The fund's liquidity reserve must amount to at least 5% of the fund's assets, but may not increase to more than 49%. The investment company is obliged to temporarily close a fund if the liquidity reserve accounts for less than 5% of the fund's assets. The risk of this happening is called the risk of exposure ; when advising investors, the investor must be informed about this risk without being asked .

The fund assets are managed by a KVG, a so-called capital management company. The KVG is a special credit institute and is subject to supervision by the Federal Financial Supervisory Authority (BaFin) . The special fund itself does not have legal capacity, but is represented by the KVG.

If more fund units are redeemed (from the fund's point of view a so-called “redemption of units”) than liquid funds are available, the fund may either take out outside capital, which reduces the return , or must sell real estate.

A problem arises when the outflow of funds is high and therefore many properties have to be sold quickly. The pressure to sell reduces the price that can be achieved on the market. If the achievable price falls below the value determined by the appraiser, a sale is no longer permitted. Often only the profitable properties can then be sold, which further burdens the fund's return. To alleviate the problem, a 2-year minimum holding period and a one-year notice period will apply from April 2011 for large investors (see below).

Investing in real estate funds can offer tax advantages, depending on the structure of the fund. Part of the profit of a real estate fund is based on the property's appreciation. This part is tax-free. The remaining profit attributable to the rental income is taxed as income from capital assets . If this income is earned in countries with which double taxation agreements exist, then this is tax-free - possibly taking into account the progression proviso. In this way, real estate funds that are only invested abroad can achieve distributions with up to 100% tax exemption.

Fund assets

The funds collect money for commercial properties such as office buildings, shopping centers, hotels and city ​​districts . Residential real estate only plays a marginal role. Investments are made in both existing properties and project developments . The funds often have more than 150 developed and undeveloped properties as well as land rights in different locations.

The properties are selected according to the principle of risk diversification. An open real estate fund must own at least ten different properties. At the time of acquisition, no property may amount to more than 15% of the fund's assets. A maximum of 20% may be invested in land in the state of development, 30% in buildings in countries with foreign currencies without hedging the currency risk and 20% in shares in real estate companies. Up to 49% of the fund's assets may be used for investments in real estate companies in which the fund management has a majority of the capital.

Prominent buildings owned by open real estate funds include the Chilehaus and the ABC-Bogen in Hamburg , the Potsdamer Platz Arkaden in Berlin , the Polygon-City in Ratingen , the Le Centorial and the La Defense Espace 21 in Paris , the Haagse-Poort- Buildings in The Hague , the Almada Forum in Lisbon , the Radisson SAS Hotel in Brussels , the 444 North Michigan Avenue office building on the Magnificent Mile in Chicago , the 140 Broadway office building in New York City and the Platinum in Shanghai .

Their value is not determined according to market prices . Independent experts estimate the market value. It is based on the earnings value in accordance with the German Valuation Ordinance . All economic and legal aspects influencing the value, including market conformity and sustainability of the rents, are included. The reviewers have a certain amount of leeway in their assessment.

In order to be liquid, the funds are required to hold between 5% and 49% interest-bearing securities or similar quickly available investments. However, loans may only be raised for up to 50% of the fund's real estate portfolio.

Share certificates

Units in fund assets are evidenced in the form of unit certificates in accordance with Section 33 of the German Investment Act . These share certificates can be purchased by the public. The number of unit certificates can be increased according to demand. Individual funds have more than 20 million unit certificates in circulation. They are transferable and must be taken back by the investment company at the owner's request . However, the company can provide for the suspension of the redemption of units under certain conditions in the contractual conditions. In addition, BaFin can order the suspension of the redemption of units to protect the shareholders. The redemption prices are calculated by the investment company or a custodian bank and published every trading day. The net fund assets are divided by the number of units issued. The net fund assets are made up of the market value of the property acquired by the fund and the liquidity , less all liabilities and provisions .


The rental income and other income are distributed to the holders of the unit certificates once a year after the deduction of interest and repayments, administration, maintenance and management costs as well as the deduction for wear and tear . In contrast, reinvesting real estate funds automatically invest rental income and other income in new properties. The investments also benefit the shareholders because they increase the value of the shares.


The performance of open-ended real estate funds is determined by the annual distribution and the performance of the unit certificates. Between 1975 and 2003, the annual performance of open-ended real estate funds moved between +5.6% and +3.3% according to calculations by the BVI Federal Association of Investment and Asset Management . It peaked in 1992 with 9.4%.

In 2006, an open real estate fund generated losses for the first time.

Fund management

The capital management company (KVG) takes care of the management of a fund on a fiduciary basis . Management is understood to mean asset management, not the management of buildings. It charges the investor fees for its activities, including a one-off sales charge of 5% to 5.5%. In Germany, the KVG must have the legal form of a stock corporation or a GmbH or a GmbH & Co. KG ( corporation ) and have sufficient equity . If she wants to set up a fund, she must have € 125,000 or € 300,000 in initial capital. The money must be fully paid up. If the fund's assets exceed € 250 million, the KVG must raise further own funds of at least 0.02% of the amount in excess of the amount.

Limited investor protection

Even if open-ended real estate funds are regulated, they only offer private investors limited protection. In particular, there is a risk that the fund company will close open real estate funds if investors want a large amount of capital paid out at the same time. Sales of real estate, which the fund companies have to carry out under time pressure in such cases, have in the past led to considerable losses for investors (see also section “History”).


Open-ended real estate funds were first launched in Switzerland in 1938. In 1959, Bayerische Hypotheken- und Wechsel-Bank and Bayerische Vereinsbank launched the first fund of this type in Germany. After the introduction of a secure legal framework in 1969, open-ended real estate funds grew in popularity. Between 1972 and 2006 their number in Germany rose from eight to 31. This type of fund is now also available in Spain, Austria (since 2004) and France (since 2006, Organizme de placement collectif dans l'immobilier - OPCI ).

Fund crisis in 2004

For a long time, open real estate funds were seen as a real guarantee of profit. Between January 2000 and July 2003 their prices in Germany increased by up to 4.8% annually, the middle field averaged almost 4% annually. Not a single fund reported losses. Funds with long-term rental agreements were considered particularly secure. If their remaining term was ten or 20 years, a write-down of the certificates was unlikely and investors were protected from the ups and downs in the real estate market. Since the beginning of 2004, the open-ended funds focused on German real estate have been getting into increasing difficulties because many office buildings are struggling with stagnating and falling rents or are hardly rentable. The distributions of the funds concerned decreased. For fear of a devaluation of the market value, more real estate certificates were often returned than liquid funds were available at the capital investment companies . Initially, this did not affect open-ended real estate funds that primarily focused on the acquisition of properties in foreign growth markets. They were able to register cash inflows at the same time.

Development in the financial crisis since 2008

In January 2009, a number of open-ended real estate funds suspended the redemption of fund units for (initially) up to twelve months. This is done to protect investors, since assets can only be liquidated at considerable discounts under the influence of the financial crisis to meet the return requests.

The open-ended real estate fund Morgan Stanley P2 Value , managed by Morgan Stanley Real Estate Investment GmbH, devalued the unit price by around 13.9% on July 23, 2009 following a complete revaluation of the fund properties by the expert committee. This devaluation went well beyond the moderate changes in unit prices that have so far been typical for open-ended real estate funds. The redemption of fund units in Morgan Stanley P2 Value was initially suspended for six months at the end of October 2008, but later for twelve months. The issue of fund units was also suspended between July 13 and July 23, 2009. On October 29, 2009, the redemption of units was suspended for a further twelve months. As a result, the fund was further devalued on July 22nd, September 24th and October 13th, 2010. On October 26, 2010, Morgan Stanley Real Estate Investment GmbH finally decided to dissolve the fund and pay out. The dissolution period was set to three years until September 30, 2013.

On January 30, 2009, Aberdeen Asset Management's DEGI International Fund bought and sold shares again. After investors withdrew around EUR 250 million between June and September 2009 alone, the fund closed again on November 17, 2009. The Degi Europa Fund remained closed.

On February 9, 2010, Aberdeen Asset Management devalued the open-ended real estate fund Degi Global Business by 21.6%. This is the strongest devaluation of an open real estate fund in history.

The Commerz Real , a subsidiary of Commerzbank, announced on March 24, 2010, the merger of the Fund hausInvest global and hausInvest europa September 30, 2010 unknown (new fund name hausInvest ). The HypoVereinsbank subsidiary iii merged the funds Inter Immoprofil and Euro Immoprofil .

On May 6, 2010 the redemption of shares in open real estate funds was again suspended. After investors were able to redeem fund units again, KanAm Grundinvest and SEB ImmoInvest were closed for the second time. The reason given was that the draft discussion presented by the Federal Ministry of Finance on the planned law to strengthen investor protection and improve the functionality of the capital market, in particular the new regulation of open-ended real estate funds, led to massive uncertainty among investors. In order to protect investors, the currently significantly increased redemption requests for fund units would therefore no longer be carried out temporarily.

In total, investors lost 8.3 billion euros in the real estate crisis of 2008, as a total of 17 open-ended real estate funds had to sell their properties. These open real estate funds were no longer able to pay off their willing shareholders and therefore had to sell their real estate under time pressure. This shows a significant risk that investors face when investing in open-ended real estate funds.

Legal framework

The legal framework in Germany was re-regulated on January 1, 2004, the law on capital investment companies (KAGG) and the foreign investment law that had been in force until then were combined to form the Investment Law (InvG). According to this, the investment companies must comply with the investment policy, the presentation of the fund's assets and the obligation to publish, which protect investors and their investments. They are checked by the custodian bank and an independent committee of experts.

A capital investment company is a kind of special credit institution and is controlled by the German Federal Financial Supervisory Authority (BaFin). The classification as a credit institution was canceled by the Investment Amendment Act on January 1, 2008.

The general tax conditions result from the Investment Tax Act (InvStG).

Redemption of Shares

Due to the liquidity problems that have arisen in the past , the rules according to which investors can redeem their units have gradually been tightened. The following rules apply to purchases made after July 22, 2013:

  • In real estate investment funds, unit redemptions are only possible after a minimum holding period of 24 months.
  • Unit returns are to be declared to the investment company with a return period of twelve months by means of an irrevocable return declaration.
  • The deadline for suspension of redemptions in the event of a lack of liquidity in the fund is 36 months. If this deadline is not sufficient, the investment company's right to manage the fund expires.

Old regulations: Purchases of shares before January 1, 2013 remain unaffected (grandfathering; unlimited return still possible), for purchases before July 22, 2013 a calendar-half-yearly tax exemption of € 30,000 applies.

Tax treatment of the funds

The real estate special fund of the fund does not have legal capacity under civil law, but forms a separate taxable entity under tax law . However, from the basic idea of ​​taxing income for shareholders, there is a tax exemption from corporation and trade tax .

Ongoing taxation of shareholders

The principle of transparency applies to the taxation of shareholders , according to which the shareholder taxes the income as if he had made a direct investment. As a result, the income is taxable regardless of whether it is distributed or retained.

If the units in the fund belong to private tax assets , the shareholder earns income from capital assets that is subject to capital gains tax up to 2008 and withholding tax from 2009 . If, on the other hand, the units are part of the taxable business assets , there is operating income and the type of income is based on the type of income of the business to which the units belong.

The amount of the income from the investment fund to be taxed by the shareholder results from the tax bases to be published annually by the investment company in the Federal Gazette .

Taxation of the sale of shares

The sale of shares in open-ended real estate funds was a private sale transaction until 2008. This means that the one-year retention period applies to shares that were acquired by December 31, 2008. If this is met, profits from the sale of shares are not subject to taxation.

Profits from the sale of units acquired after January 1, 2009 are generally taxable and subject to the withholding tax. However, if the capital gain is due to the increase in the value of the investment fund's foreign real estate, the capital gain is tax-free (so-called real estate profit).


  • Walter Klug: Open-ended real estate funds: Time for stable values. Fritz Knapp Verlag, Frankfurt am Main 2004, ISBN 3-8314-0768-1 .
  • Stephan Bone-Winkel: The strategic management of open real estate funds. Müller, Cologne 2000, ISBN 3-932687-15-9 .
  • Christoph Loos: Strategies of institutional real estate investors: A competence-based strategy approach using the example of open real estate funds (= publications of the research center for operational real estate management . Vol. 2). R. Müller, Cologne 2008, ISBN 978-3-89984-205-0 (also dissertation, Techn. Univ. Darmstadt, 2005).
  • Tobias Streckel: Launch of a German open-ended real estate fund, illustrated using the example of the Catella Focus Nordic Cities: Conception of a portfolio structuring of the real estate special assets. Diploma thesis, Nürtingen-Geislingen University of Economics and Environment, 2007.
  • J. Homann, Tobias Streckel: Practical example risk management: special funds . In: Karsten Junius, Daniel Piazolo (eds.): Practical handbook real estate market risks. Immobilien Manager Verlag, Cologne 2009, ISBN 978-3-89984-209-8 .
  • Wolfgang Servatius: Functional deficits in open-ended real estate funds . IREBS ( University of Regensburg ), Regensburg 2012 (PDF; 523 kB) .

Web links

Individual evidence

  1. BGH, judgment of April 29, 2014 - XI ZR 130/13 ( pdf ).
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  10. Archived copy ( memento of the original from June 3, 2015 in the Internet Archive ) Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice. Commerz Real press release @1@ 2Template: Webachiv / IABot /
  12. Real estate funds as billionaire graves, in, accessed on November 21, 2017