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German open-ended real estate funds as a whole returned 0.1% in February, but returns on funds with a global focus dropped to a negative result of 0.4%, according to the recently published OFIX-monthly report of Investment Property Databank.

The decline was mainly caused by weak returns from those funds which are in liquidation. 'The gap between the good and the poor-performing funds is widening,' said Sebastian Glaesner, head of fund services at IPD in Germany.

The six funds in the OFIX index that have gone into liquidation returned a negative 0.5% in the last three months. The period of weak returns within this fund group began in mid-2009. 'This means that the positive returns of the previous seven years have been eroded in the last 24 months,' added Glaesner.

While the overall index has risen from 100 in December 2005 to 120.5 in February this year, the index value of funds in liquidation currently stands at 100.8. The KanAm grundinvest Fonds, which recently went into liquidation, is the exception in this group, being the only one of the six funds that has not seen negative returns during the period - either over the short or the longer term.

Those funds which are now in liquidation have a total volume of EUR 10.3 bn. After growing steadily between 2005 and 2008 to reach EUR 15.4 bn, this represents a decline of about a third. The Degi funds and the Morgan Stanley P2 Value fund in particular have recorded sharp declines. It was in fact the very low return on the P2 Value Fund that pulled down the sub-index by 0.35 percentage points, as a result of its monthly return of -4.5%.