SEB becomes latest manager to call time on German open-ended fund
SEB ImmoInvest is to be liquidated, forcing it to sell €6bn of assets over the next five years. The German open-ended fund received more claims for redemptions than the liquidity available when it re-opened on 7 May after being frozen for two years. The company claimed investors were “demoralised”.
It said there were two kinds of sellers: “Those whose investment strategy ended in the past two years and needed their money, and those who felt alienated by this type of investment.”
One of the largest of its 132 holdings, the €1.5bn Potsdamer Platz in Berlin, is likely to prove its biggest bugbear given its high vacancy rate and the fact that a new shopping centre is being built next door. SEB has failed to sell the 19-building complex both directly and by selling shares in the SPV that owns it.
One German agent said its smaller €20m-30m assets were likely to come to the market first. BNP Paribas is already marketing some European SEB properties. Most of its office-weighted portfolio is based in Germany, but it is invested in 17 countries including France, Italy and the UK – it owns 2 St Philips Place in Birmingham.
Open-ended funds tended to buy secondary properties in top locations to deliver returns to investors. They have struggled to meet rising redemption requests since the start of the financial crisis, which has led to the dissolution of eight funds.
Credit Suisse plans to reopen its €6.2bn CS Euroreal fund from May 18 to 21. If available liquidity is not sufficient to meet all redemptions it will become the next fund to be wound up.