IntReal International Real Estate Kapitalverwaltungsgesellschaft mbH (INTREAL) increased its assets under administration (AuA) by around a third in 2018, despite significant sales activities. After seeing growth of €5.1 billion in the previous year, INTREAL achieved new record growth in 2018 with an increase of €5.8 billion. AuA rose to a total of €24.4 billion (end of 2017: €18.6 billion). INTREAL was managing 138 property funds at the end of 2018, 24 more than in the previous year. The number of properties in the funds surpassed the 1,000 mark for the first time, climbing by 31% to reach 1,126 properties under management. At the end of 2017, the portfolios of the funds under administration comprised 857 properties.

Summing up this performance, Michael Schneider, Managing Director of INTREAL, commented that “in the tenth year of the company’s history, we once again outdid our excellent 2016 and 2017 results. We have thus reinforced our position as a leading third-party real estate AIFM and are very proud to have positioned ourselves as a particularly effective and stable market player after just under ten years.”

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A no-deal Brexit is becoming an increasingly likely scenario. For this reason, interest from British real estate fund providers in cooperating with German or Luxembourgish third-party real estate AIFMs is soaring. Such cooperation will give British fund providers the ability to enjoy EU passporting privileges, to initiate their own funds and to sell fund units throughout the EU even after Brexit. The model is as follows: The real estate asset manager is based in the United Kingdom, and the third-party AIFM is based in Germany, for example. The latter launches the fund in accordance with German law. As the AIFM is licensed in Germany – and thus in the EU – the fund units may be sold throughout the EU via passporting rules.

Michael Schneider, Managing Director of INTREAL, commented: “In the past few months, and especially since the beginning of this year, we have been receiving an increasing volume of enquiries from asset managers in the United Kingdom. The advantages of cooperating with INTREAL are obvious: The fund providers spare themselves the costs of founding and maintaining an AIFMD-licensed branch office in the EU, while they can still initiate their funds and sell fund units EU-wide.”

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The most important deliverable of a third-party AIFM is to provide easy online access in a manner tailored to the needs of a given client who may use it to monitor and manage their investments and to grant authorisations, as well as a functional workflow between the AIFM company and the client (IT access and workflow).

The second-most important aspect for respondents are all the deliverables that an AIFM offers in the areas of fundraising and the resolution of potential conflicts with investors. Michael Schneider, Managing Director at INTREAL, commented: “Clients emphasise in this context that the third-party AIFM should not handle these tasks in its own right. Nonetheless, it is important to respondents that they get support from the AIFM in these aspects. It is precisely what INTREAL has been offering for a considerable period of time.”

These are the main findings of a survey that INTREAL, Germany’s leading third-party AIFM for real estate, conducted in collaboration with Maximilian Kretzschmar, graduate of a master’s degree program in real estate economy at the International Real Estate Business School (IREBS), on the subject of what services and product characteristics are offered by third-party AIFMs that exceed the statutory parameters. Respondents were asked to answer primarily two questions: How should a third-party AIFM position itself, and which product characteristics play a particularly important role when selecting a third-party AIFM?

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IntReal International Real Estate Kapitalverwaltungsgesellschaft mbH (INTREAL) remains on course for growth and has two strong shareholders going forward. The Hamburg-based foundation, Joachim Herz Stiftung, takes a 49% share in INTREAL, Germany’s market leader in institutional real estate fund administration. By incorporating Joachim Herz Stiftung into the group of shareholders, the HIH Group is boosting the capital base and the long-term neutrality and independence of INTREAL as a real estate Service KVG. The HIH subsidiary Warburg-HIH Invest Real Estate GmbH will remain as majority shareholder.

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More and more fund providers want to take profits, reveals a survey by INTREAL, Germany’s leading third-party real estate AIFM, of its fund partners. It found that 40 percent of those surveyed believe that now is a good time to take profits and are planning sales. However, only around a quarter of the fund providers are planning to liquidate funds completely.

Michael Schneider, Managing Director of INTREAL, explains: “Our survey shows that only a quarter of our fund partners are planning to liquidate entire funds. These cases relate mostly to older funds that have reached the end of their planned duration. In contrast, 40 percent of the fond partners want to sell individual properties in a targeted manner. This discrepancy shows that selling is not necessarily the same as fund liquidation. Most of the sale proceeds are to be reinvested – in properties.”

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INTREAL Solutions, a wholly owned subsidiary of INTREAL, a third-party real estate AIFM, and Crem Solutions, one of the leading providers of solutions for digital property management, have agreed a strategic partnership. The objective of the cooperation is to provide a standardised IT platform for the professional management of properties.

INTREAL Solutions will contribute its long-standing integration expertise and experience in connecting property and asset managers as well as its existing IT infrastructure. In addition to operation, the solutions for interfacing with ERP and data warehouse systems are particularly notable here. Crem Solutions’ contribution to the partnership will be its iX-Haus and iX-Haus plus software with a best-in-class standard configuration. iX-Haus is one of the most successful software solutions for the management of residential and commercial properties in Germany.

Andreas Ertle, Managing Director of INTREAL, says: “In this cooperation, two strong partners are pooling their expertise. We can thus offer our clients and partners a fully integrated IT solution covering everything from the management of property and the administration of funds to investor reporting.”

Dr Christian Westphal, Managing Director of Crem Solutions, adds: “The partnership will benefit both the companies involved. The services of our iX-Haus software and INTREAL Solutions’ many years of integration experience complement each other perfectly. Both the IT platform from INTREAL Solutions and iX-Haus from Crem are already being used by many companies in the real estate and fund sectors – the partnership will result in additional synergies for our clients.”

INTREAL Solutions and Crem Solutions’ shared platform will have a modular design. Clients can select a scalable portfolio of solutions covering property, asset and fund management, including operation of the overall solution in their own data centre, according to their needs

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Large sums are expected to be invested in property again by institutional investors worldwide in 2018. Based on its “Investment Intentions Survey 2018”, INREV expects around €51.1 billion to be invested in property this year. The largest share of this €51 billion will go to Europe (around 41.2 percent), followed by the USA (31.7 percent). The Asia-Pacific region (17.4 percent) is in third place.

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Statistics from Deutsche Bundesbank and BVI at the end of the year show that the fund sector had a very good 2017. This holds true for both open-ended mutual property AIFs and open-ended special AIFs. BVI put net inflows in the mutual segment at €5.5 billion, once again considerably higher (around 30 percent) than in the previous year (2016: €4.2 billion).

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INTREAL International Real Estate KVG mbH (IntReal) posted further rapid growth in 2017. After growing by around a third in 2016, assets under administration (AuA) increased by around 38 percent in 2017. At the end of 2017, AuA reached approximately €18.6 billion (end of 2016: €13.5 billion). There was a similarly positive development in funds under administration and in the number of associated properties: A total of 83 property funds were administered at the end of 2016, whereas a year later there were 114. The portfolios of these funds comprised 857 properties as at the end of 2017 (previous year: 629 properties).

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The market for closed-end property AIFs has returned to its growth path. The figures pub-lished by Deutsche Bundesbank in September 2017 show that the segment has recorded growth of around 17 percent in the past two years. Net fund assets increased from €18.4 billion in September 2015 to around €19.5 billion one year later and around €21.5 billion in September 2017. The Bundesbank statistics do not make a distinction between closed-ended special AIFs and closed-ended retail AIFs.

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