Europe Property Funds Near Reckoning as €12 Billion Gets Pulled
An increasingly critical dilemma for open-ended property funds in Europe, investment vehicles that oversee some €166 billion in assets.
In a world where office buildings are out of favor, one of the few ways to meet redemptions is to sell other, more attractive assets, such as residential buildings, warehouses or properties than can be transformed for such uses.
Funds may soon have no choice but to sell office buildings -- triggering a wave of revaluations that threaten any market recovery.
Open-ended property funds in Europe have seen six consecutive quarters of outflows, according to Morningstar Inc. The data showed investors have pulled more than €12 billion since the European Central Bank began raising interest rates in July 2022, leaving net assets at the lowest level in five years.
Bloomberg 30 July 2024
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