DB Real Estate froze its grundbesitz-invest fund for withdrawals in December after a run on its assets, which started after DB officials said the fund's properties needed to be revalued. The fund re-opened for redemptions on March 3 and suffered a net outflow of euros 1.36 billion ($1.7 billion) that month, according to a report published in April by the German funds association BVI.
The report also said that DB fund assets were worth euros 6.37 billion ($8.04 billion) at the end of March, down 23% from the end of 2005 and making DB's grundbesitz-invest fund one of the hardest hit of the German funds. Analysts see the recent troubles faced by the open-ended property funds industry as a reason why some lawmakers in Berlin have turned cautious on passing legislation to enable the launch of German REITs. The appeal of REITs is that they are perceived to be more liquid than open-end property funds, whose certificate value is based directly on the underlying real estate holdings.
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