Rating agency Scope downgrades: Real estate funds have rental problems

Dhe corona pandemic has turned the trend in real estate funds: For the first time since 2011, the fund’s letting rate is no longer increasing – it is falling. With 94.3 percent rented properties, it is still at a high level. But the development since the beginning of the pandemic differs significantly from previous years. Year after year, the funds were able to better utilize their skyscrapers, apartment blocks and commercial properties. Now rental is falling for the first time in this decade.

Sonja Knorr, specialist for open-ended real estate funds at the Scope rating agency, made two phenomena of the corona crisis responsible for this in an interview with the FAZ: On the one hand, there are difficulties with the hotels because people have not been able to travel for so long, because holidays were not possible, many business trips canceled and there were hardly any trade fairs. “Some hotels in America in particular have lost their tenants in this process,” said Knorr. In addition, there is a structural change in shopping centers that was already evident before the crisis. Especially among medium-sized centers, some could even disappear from the market, said Knorr. On the other hand, many funds switched from commercial to residential real estate precisely because of the crisis. In the large apartment blocks in the middle price segment, however, there is always a higher vacancy rate than in commercial real estate – this segment apparently seems to be safer for some fund companies at the moment.

Uni-Immo-Global downgraded

Scope has now downgraded six out of 15 open-ended real estate funds for private investors. That is an unusually large amount. While the large Hausinvest fund from the Commerzbank subsidiary Commerz Real retained its rating, all three real estate funds monitored by the Volksbank fund company Union Investment were downgraded: Uni-Immo Deutschland, Uni-Immo Europa and Uni-Immo-Global. With regard to the rating with the grade “bb”, the latter is now the worst at Scope. The rating spectrum ranges from “a +” to “bb”, the average is “a-“. The Grundbesitz Europa fund of the DWS fund company was also given a lower rating than before, with “bbb +” being awarded.


According to Knorr, the main reason for the fund downgrading was the return profile. While the 15 funds achieved an average of 3.2 percent in 2019, it was only 2.1 percent in 2020. With Uni-Immo Global, there was even a real estate fund that had a negative return for the year. “That is remarkable,” said Knorr. The background to this is the fund’s comparatively strong involvement in American hotels. “In New York in particular, the hotel market is very difficult right now,” said Knorr. The range of fund returns over the year ranged from minus 1 to plus 5.1 percent, with an average of 1.9 percent. For the full year 2021, the Scope analysts expect an average return of around 1.5 percent. “That is of course still subject to how the corona crisis will continue,” said Knorr. In the longer term, however, the return will probably rise again.

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