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German property investment vehicles and the introduction of G‐REITs: an analysis

Ulrich Schacht (Finance and Accounting Group, WHU – Otto Beisheim School of Management, Vallendar, Germany)
Jens Wimschulte (Chair of Financial Services, University of Regensburg, Regensburg, Germany)

Journal of Property Investment & Finance

ISSN: 1463-578X

Article publication date: 25 April 2008




Germany is the biggest real estate market in Europe. Although some established vehicles for indirect property investments are available, the German real estate market is dominated by direct investments and lags behind its international peers in capital market integration. The purpose of this study is to examine whether the recent launch of German REITs may improve this situation.


Existing indirect property investment vehicles and the new G‐REIT are analysed and compared along the dimensions of transparency, liquidity and risk/return characteristics. In addition, potential capital flows into G‐REITs are investigated and economic implications derived.


The study identifies the limitations of existing German indirect real estate investment vehicles and demonstrates the superior characteristics of the new G‐REIT. Substantial short‐term capital flows from existing vehicles to G‐REITs are, however, unlikely. Instead the temporary exit tax will foster an economically beneficial reallocation of capital by private companies and public authorities through property sales to new domestic and international investors via G‐REITs.


The results indicate that G‐REITs have the potential to attract substantial funds in the medium term and facilitate a more integrated and developed German property and capital market.



Schacht, U. and Wimschulte, J. (2008), "German property investment vehicles and the introduction of G‐REITs: an analysis", Journal of Property Investment & Finance, Vol. 26 No. 3, pp. 232-246.



Emerald Group Publishing Limited

Copyright © 2008, Emerald Group Publishing Limited

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