German Open-End Real Estate Funds

Abstract

Open-end Real Estate Funds (OEREFs) are the predominant type of securitized real estate investments Germany. This chapter explains the institutional and legal environment of this investment vehicle, which is designed to provide the risk-return benefits of private market real estate. We review the historical performance and portfolio composition of German OEREFs as well as possible reasons for their track record. A special emphasis is placed on the turbulences in the aftermath of the recent financial crisis and the legal changes that were undertaken to stabilize German OEREFs.