According to the research, German open and closed-ended fundscurrently have approximately €10.8 billion ($9.2 billion) to investin European real estate. 'Given the existing average assetallocations, this translates into a potential €400 million ($340million) for investment into the hotel sector' said Arthur deHaast, managing director Europe at Jones Lang LaSalle Hotels.'German funds are experiencing high cash in-flows as a result ofthe poor stock performance, and this has only increased since theevents of 11 September, with investors viewing property as a safeinvestment haven in the current economic climate'.

Historically the German funds have been primarily focused ondomestic hotel investment activity. However this pattern isbeginning to change and more recently the funds have branched outand concluded an increasing number of acquisitions outside of theirhome domicile. Deutsche Grundbesitz-Investmentgesllschaft (DGI) wasthe first open-ended fund to set up an international capacity, the€1.1 billion ($935 million) 'Grundbesitz Invest Global' to investin the USA and Asia. Commerz Grundbesitz Investmentgesellschaft hasalso announced plans for an international real estate fund in 2002with a focus on the USA.

De Haast continued: 'More specifically in the hotel sector,Deutsche Immobiliend Fonds (DIFA) bought the Radisson SAS inBrussels earlier this year. This follows on from DGI's sale andleaseback deal with Accor on four hotels in Spain. We have recentlyseen CGI acquire a hotel development at Charles de Gaulle airportin Paris, to be operated by Marriott Hotels & Resorts under theCourtyard brand.'