GERMANY – The German government has altered its draft for the implementation of the Alternative Investment Fund Managers (AIFM) Directive to allow the issuing of new open-ended real estate funds, including Spezialfonds.

In the first draft of the Kapitalanlagegesetzbuch (KAGB), through which Germany is implementing the directive, the issuance of any open-ended real estate funds had been prohibited, as the government aimed to protect investors following liquidity issues in some open-ended retail funds known as GOEFs.

However, the revised draft now allows the issuance of new open-ended real estate Spezialfonds, as well as GOEFs, within limits.

Real estate association ZIA, together with other real estate representatives and investments associations such as the BVI, had been in talks with the government for several months.

In a statement, ZIA president Andreas Mattner said: "We have reached a first breakthrough and achieved a lot."

Another industry representative called the new draft "a major success" for the negotiating parties.

Thomas Richter, chief executive at the BVI, said: "It is good that the open-ended real estate Spezialfonds continue to exist as they were."

With respect to GOEFs, however, both associations highlighted a number of ongoing problems, such as the fact the funds can be issued and sold only at certain times of the year. 

"This," Mattner said, "renders them very inflexible."

The BVI's Richter agreed that some of the new regulations were "far removed" from investment reality. But he said he would give the new holding periods and restrictions agreed earlier this year – to come into effect from 2013 – a chance to "prove themselves" in the actual implementation.

Another concern highlighted by the ZIA – which it wants to "clarify in further negotiations" – is that real estate investment companies might still fall under the AIFM Directive despite attempts by the federal finance ministry to use the KAGB to make sure they are not considered alternative fund managers.

Richter also wants existing open-ended funds to be excluded from any new regulations, as they have "already proven their stability during the financial crisis".

Meanwhile, Aberdeen announced another sale from its formerly open-ended real estate fund, which is currently being dissolved.

The Degi International fund sold the Homburg Harris Centre in the inner city area of Calgary in Canada to an undisclosed Canadian institutional investor.

The building was sold "slightly underneath" the current trading value at CAD356bn (€276bn), increasing liquidity in the fund to 20%.

Aberdeen head of Germany Hartmut Leser told IPE the company would no longer issue open-ended retail funds but concentrate on the institutional sector instead.

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