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The aim of this paper is to improve the understanding of what drives the performance of non-listed real estate funds.

The authors performed a panel regression analysis on the basis of an extensive sample from Investment Property Databank (IPD) covering returns and selected characteristics of German Spezialfonds over a period of five years from 2006 until 2010. The analysis was performed for the whole sample as well as separately for three distinctively different subperiods: the boom of 2006-2007, the downturn of 2008-2009 and the recovery of 2010.

The analysis uncovered significant differences in the drivers across the cyclical phases. During the boom phase, leverage and global portfolio allocation positively affected returns, while allocation to Germany had a negative effect. In contrast, fund volume, management costs and allocation to offices led to underperformance. Finally, in the recovery of 2010, leverage, allocation to Germany and diversification across property types improved performance, while higher liquidity and focus on retail had a negative impact.

In addition to providing extensive and unique insights into the determinants of performance of the German Spezialfonds, the results should be of interest to fund managers looking for advice on the optimal positioning of their funds in response to changing economic environments.

Despite the significant practical importance of the topic for the real estate fund industry, it has been addressed by few researchers so far.

German real estate investment trusts (REITs) are a small but important property investment vehicle in the European REIT landscape, offering German commercial property investment exposure in a liquid format, compared to the more property development-focused German listed property companies and the popular German open-ended property funds. The purpose of this paper is to assess the emergence of the German REIT market and the risk-adjusted performance and portfolio diversification benefits of German REITs in a mixed-asset portfolio over 2007-2015. The post-global financial crisis (GFC) recovery of German REITs is highlighted. Enabling strategies for the ongoing development of the German REIT market are also identified.

Using monthly total returns, the risk-adjusted performance and portfolio diversification benefits of German REITs over 2007-2015 are assessed. Efficient frontier and asset allocation diagrams are used to assess the role of German REITs (and German property companies) in a mixed-asset portfolio. Sub-period analysis is used to assess the post-GFC recovery of German REITs.

German REITs delivered lesser risk-adjusted returns compared to German stocks over 2007-2015, with limited portfolio diversification benefits. However, since the GFC, German REITs have delivered strong risk-adjusted returns, but with continued limited portfolio diversification benefits with German stocks. German REITs also out-performed German property companies. Importantly, this sees German REITs as strongly contributing to the German mixed-asset portfolio across the portfolio risk spectrum in the post-GFC environment.

German REITs are a small but important market at a local, European and global REIT level. The results highlight the major role of German REITs in a German mixed-asset portfolio in the post-GFC context. The strong risk-adjusted performance of German REITs compared to German stocks sees German REITs contributing to the mixed-asset portfolio across the portfolio risk spectrum. This is particularly important, as many investors (e.g. small pension funds) use German REITs (and German listed property companies) to obtain their German property exposure in a liquid format, as well as the increased importance of blended property portfolios of listed property and direct property.

This paper is the first published empirical research analysis of the risk-adjusted performance of German REITs, and the role of German REITs as a listed property vehicle in a mixed-asset portfolio. This research enables empirically validated, more informed and practical property investment decision making regarding the strategic role of German REITs in a portfolio.

The study was designed to investigate the bidirectional causation between the real estate market characteristics (residential property prices/rents (including PTR), office rents) and the rise of coworking spaces (CSs) in the peripheral areas of Germany.

Based on the desk research, the authors constructed their own database of 1,201 CSs. The authors gathered data on the residential and office prices and rents on a district level. To identify real market differences between districts with and without CSs, the authors applied the t-test for independent samples.

The second-highest number of CSs were found to operate in the office market peripheries. This phenomenon should be explained by a search for lower office rents, which CSs seek. Most CSs in the peripheral areas of Germany were only recently established in tourist-oriented regions in the south and north of Germany. In this paper, the authors confirmed that the strength of peripheral CSs lies in the hybridity of their operations: for the majority of CSs, running a CS is a non-core business. The authors argue that the role of CSs is rather limited in attracting real estate investors and boosting the real estate market in the peripheral areas of Germany.

The research shows that peripheral locations are attracting CSs to significant extent. The study shows that CSs can be part of corporate real estate or workplace strategies. As the majority of peripheral CSs are located in tourism areas, the subletting of vacant spaces could be a lucrative business model for hotels, particularly in the times of pandemics. Therefore, further research should focus on the role of tourist areas in the implementation of CSs model.

The focus of this study (CSs in peripheral areas) is original. Additionally, applying the real estate perspective to study the location of CSs is novel as well.