"It is just the right time for longer-term investors like us to enter Romania and Bulgaria".

Malcolm R. Morgan

Today, when almost every major property player is looking at Germany, aspiring to benefit from the country’s growth story, many German longer-term real estate investors are pursuing larger international exposure. DEGI Deutsche Gesellschaft für Immobilienfonds mbH, the first German retail and institutional open-ended real estate funds manager to enter Romania, is aiming to achieve Central and Eastern European allocation of EUR 2 bln in the course of three years.

About the investment strategy and plans of the funds DEGI manages, as well as about current developments within the European marketplace, Property Xpress talks with Malcolm R. Morgan, member of the management board at DEGI, responsible for portfolio management, acquisition, research, and new products.

What is the ideal Central and South Eastern European allocation, in percentage, for each of DEGI’s products with a focus on the region? Is there an availability of income-generating retail assets in CEE? Has the time for longer-term property investors to enter Romania and Bulgaria come? In how many shopping centers and office buildings is DEGI going to invest in Bulgaria and what investment volume will it commit to each of the country’s markets? Will DEGI continue its co-operation with Charlemagne Capital and ECPC in other countries as well? Is the company viewing Serbia and Ukraine? Will it invest in industrial property in SEE? Mr. Morgan provides profound answers to these questions in the present interview.

He also sheds light on issues such as: Why did DEGI decide to reduce its overall German exposure? How will it take advantage of the growth opportunities available in Europe’s largest market? Why aren’t the prospects of G-REITs as bright as expected? Why are institutional investors such as pension funds and insurance companies giving preference to the Luxemburg tax efficient structure over G-REITs and what is the greatest challenge faced by German REITs today? What are the issues confronting open-ended real estate funds managers in Europe? How will the Bucharest office market look like in three years from now? What are the yields DEGI expects to achieve in SEE? What positive effect the US sub-prime crisis is likely to produce on European yields?




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