Large funds do only like size investments. They are usually not interested in anything below 10mln/ unit. Competition for these properties is usually fierce and did drive down yields to some low levels ( 4-5%). Add to this some portfolio managers getting PERSONALY some rebates back on the purchase price and some office blocks staying empty for a long while ( just go to frankfurt and you'll see a building boom in tower blocks with few companies to fill these).

These guys can project some estimated rental value for some time but if the rents do not flow in they have to revalue. Once the quick back story broke out then it was all about shareholders getting out which probably drove valuation to too low levels.

This is the danger with quoted real estate funds. 1)They are shares and can inflict a lot of pain. 2) asset manager might not at in your best interest and could end up unwinding his holdings at the worst time.

If you have enough money, it is probably best to do it on your own. Look for properties in good locations with good tenants and good rental yields. Get a good mangement company and in 20 years time you will be long the properties for your initial investment.

This is what I did. I bought some properties in large towns in Bavaria- rental yield 7 to 9%- got a mortgage for 75%+ at 4-5%. Despite repaying the principal, paying a management company and providing some reserves for repairs/maintenance, this deal is self-financing. Then if you can optimise the rents or increase rents with inflation, it becomes slowly a cash generating machine. Then after 20 years when mortgage is fully paid back, you will really have some nice cash inflows.

Looks nice, I do not think it is risky at all as my mortgages are locked for at least 10 years- when you can resell without paying a german capital gains tax. Of course, you could loose out if we have a depression a la 1920's - read current credit crunch times 10 or if Germany does end up as the pauper of the world. Possible but I hope not very likely.