The closure of P2 Value comes around nine months after MS RealEstate shut the fund last summer to capital withdrawals –certificate sales – citing the need for a valuation write-down ofaround 10%. Walter Klug, head of Morgan Stanley Real EstateGermany, said the bank objective is to reopen the fund, and that heplans to unveil a new business plan in July or August.


However, a liquidation cannot theoretically be ruled out. P2Value opened in November 2005 and held more than $2.5 billion inassets at end-March. Nearly a third of the entire portfolio isinvested in Japanese real estate. "While the investments in Europeare already picking up again, there is no sign of that yet inJapan," Klug said.


The fund manager said further depreciations are likely to beneeded and it cannot rule out further individual write-downs overthe next few months. The move is also another casualty of theturmoil in the German OEPF sector following the publication lastweek of federal government plans to unilaterally impose a 10%across the board discount on all $111 billion in property assets inthe segment. Swedish-owned manager SEB last week shut its $7.8billion SEB Immoinvest fund to investors after a run sparked bynerves over the proposal, just a day after Munich-based independentmanager Kanam closed its $4.9 billion Kanam Grundinvest, citing thesame problems. Seven of around 30 OEPFs are now closed to capitalwithdrawals, some for lengthy periods.


In France, the JV's portfolio, located in Bordeaux, Orleans andMontpellier, is valued at $72.8 million and 75% let to the globalIT group IBM, FdR said. It carries a cap rate of 9% and has avacancy level of 15%. The portfolio was jointly acquired in 2004 ina sale and leaseback transaction.

AllanSaundersonis a managing editor of PropertyInvestor Europe and a contributor to

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