In its 2010 annual Survey of Luxembourg REIFs, the Association of the Luxembourg Fund Industry found of the 158 funds it surveyed 82% invest only in Europe, including the majority of the 24% which only invest in one country.
However the survey, which looks at the market to the end of 2009, found more recent launches were beginning to focus on other areas of the world outside of Europe, including funds targeting property in emerging Europe, the Middle East and Asia.
Well over half (67%) of the funds surveyed are closed-ended with 15% semi-open and only 6% fully open-ended with no restrictions on redemptions. The report suggests this reflects the illiquid nature of real estate as an asset class and the difficulties of achieving investor liquidity upon demand.
Despite 2009 being a challenging year for markets, Keith Burman, chair of the ALFI Real Estate Funds sub-committee, said there had still been 14 launches of REIFs during the year and whilst there was only one launch of a Fund of Real Estate Funds, the number has grown steadily since the first launch in 2005.
