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Commerz Real expects to close commercial real estate deals totalling around €1 bn by the end of this year, CEO Hans-Joachim Kühl told PropertyEU in an interview at EXPO REAL. 'This is less than we had initially expected, but it's difficult to find the right product.'

Supply constraints have forced the Wiesbaden-based fund manager to adjust its investment target twice in the past year from EUR 2 bn to EUR 1.5 bn. However, it has already spent around EUR 750 mln so far this year on properties in the UK and France, as well as Germany and Finland. 'We're not just concentrating on London,' Kühl said, pointing to the acquisition of an office development in Liverpool earlier this year. 'It's difficult to find property in London for the right yield. In the Westend, we're seeing yields fall below 6%. That's not the right level for us.'

Kühl said he had greater expectations of the French market, in particular Paris. The French market is already the biggest market for Commerz Real so far this year and the fund manager is reportedly close to finalising another deal in the capital after buying an office scheme from Klépierre in August. Kühl: 'Paris is one of the most attractive cities in Europe. Supply differs there from London, there's no real need to move into the regions.'

Commerz Real is one of the three major German open-ended fund managers which is actively buying in the current market. 'There haven't been any major changes to our strategy because of the financial crisis. What we have done is adjust our strategy on a country and property level.'

Kühl said he expected the market to recover in 2010, with most countries in Europe bottoming out in terms of GDP declines. 'I think we may see an upswing again in 2011-2012, although it will be lower than in the peak years of 2006-07.'