German 10% RE Fund Discount Still on Table

BERLIN-The German federal government has not dropped plans to impose a 10% across-the-board valuation discount on open-end property fund portfolios in the framework of new legislation to be proposed before the summer. However, industry specialists remain convinced that its imposition, if it occurs, will damage the $110 billion sector and could be its death knell.

Industry sources say that a wide-ranging discussion at the federal finance ministry in Berlin at the end of last month between numerous real estate fund representatives did not touch on the discount at all. It focused mainly on Berlin proposals for a minimum investment period, redemption notice, and possible separate treatment of institutions and private savers.