Open-ended real estate funds' returns and ratings remain under pressure, says Scope

Scope has updated its ratings on 15 open-ended real estate funds. Six funds were downgraded, mainly due to lower returns while nine funds were able to keep their rating stable. Further economic development is the most relevant risk factor.

While most asset classes experienced a hard slump last year followed by a strong recovery, open-ended real estate funds were stable across the board. The average volatility of the funds was below 1 per cent.

Investors rewarded this stability last year, with high net inflows of EUR7.8 billion (compared to EUR10.4 billion in 2019). This led to comparatively high liquidity, averaging 17.2 per cent of fund assets (2019: 20.2 per cent) and significant real estate purchases totalling EUR8.3 billion (2019: around EUR8 billion).