REAL ESTATE - Savills is to launch a private German real estate fund after an abortive public fund launch earlier this year failed to generate sufficient funds.
The new fund, aimed at European pension funds and retail investors, is expected to launch before the end of the year.
The group in June ditched plans for a German property fund after failing to raise sufficient funds. At the time, the company said the plan had been βwell received by investorsβ and blamed market conditions for lack of demand. The failure cost the firm Β£0.4m (β¬0.6m) in expenses.
βThis fund wonβt be subject to market factors,β said Cordea Savills CEO Justin OβConnor.
Yet OβConnor indicated that the lure of liquidity would eventually prove hard to resist.
βWe very much believe in public markets,β he said. βStock exchange listings and REITs are an excellent way for investors to gain access to property.β
The firm has evidently not lost its appetite for German real estate. Interim results posted last week cited the groupβs βrapid growthβ in the recently acquired Berlin-based property management business, boosted by a strong investment market.
Despite reporting pre-tax profits up 56% to Β£31m (β¬45m) for the first half, the group said acquisition and an aggressive recruitment strategy would likely create pressure on margins in the short term.
