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The devaluation of SEB's ImmoInvest fund in late-April pushed returns for open-ended real estate funds down to -0.5% for the month compared with zero percent in March, according to figures from the IPD Investment Property Databank.

IPD's recently published OFIX report for April shows that while German-focused fund performance remained positive in April at 0.1%, globally focused funds produced a negative return of -0.2%, and funds with a European focus dropped to -0.5%.

The negative performance of the open-ended real estate funds was largely due to the devaluation of the SEB ImmoInvest fund in late April prior to its attempted re-opening last Monday after a two-year freeze. SEB Asset Management subsequently took the decision to liquidate the fund by April 2017 after too many investors opted to redeem their fund units.

IPD said that ImmoInvest's return has a major impact on the index result, because its NAV in excess of EUR 6 bn represents a substantial weighting within the EUR 75 bn fund index. The fund's contribution to the index return in April was -0.5 percentage points, meaning that the overall index would have returned 0% had it been excluded from the analysis. The other nine funds with negative returns had a combined contribution of -0.1 percentage points, while the 12 funds which posted positive returns made a combined contribution of 0.2 percentage points.

The German open-ended fund (GOEF) segment is undergoing a period of consolidation due to a redemption crisis that set in during 2010. Almost 20% of Germany's open-ended funds are in the process of being liquidated. Together, they hold EUR 15.9 bn of AUM, according to German fund body BVI. Several other funds are closed for unit redemptions and have to decide soon whether to re-open or liquidate in order to re-imburse investors.

However, the GOEF sector as a whole - which had total AUM of EUR 85 bn at end-March this year - is benefiting from equity inflows as investors move away from lower performing equity funds. The BVI reported that GOEFs recorded net inflows of EUR 400 mln in March and EUR 1.4 bn over the first quarter of 2012.

Separately, Deka Bank announced that its open-ended real estate funds attracted EUR 660 mln of inflows during the period January to end-April this year compared with EUR 205 mln for the same period last year.

Read more about the performance of German open-ended funds in the June edition of PropertyEU Magazine. Click on the link below to subscribe