ERSTE IMMOBILIENFONDS

Investment in real estate

  • Investing in tangible assets
  • The price of property funds is not determined by the stock exchange
  • From 50 euros per month
  • Investing in securities involves risks as well as opportunities

The urban population is growing. The need for living space is constantly increasing as a result. This is where the ERSTE IMMOBILIENFONDS strategy comes in. It focuses on demand in the residential sector. The broadly diversified real estate portfolio is supplemented by office and commercial space.

Tangible assets “On our doorstep”

It’s all about the right mix. The fund’s properties are not concentrated in one single location. They are mostly in Austria, especially in cities and urban centres. But we also invest in Germany. At the moment, the fund focuses exclusively on the Hanseatic city of Hamburg, a top business location in the north of the country.

The fund is a real estate fund in accordance with the Real Estate Investment Fund Act (ImmoInvFG) and an alternative investment fund (AIF) in accordance with the Alternative Investment Fund Manager Act (AIFMG).

In managing the ERSTE IMMOBILIENFONDS, ERSTE Immobilien KAG complies with the “Guidelines for Ethical Investments of the Austrian Bishops’ Conference and the Religious Orders of Austria”. In the selection process,  KAG continuously analyses the market. It only selects companies and properties that meet the ethical and ecological standards of the Catholic Church in Austria. You can find out more in the fund prospectus according to Section 21 of the Alternative Investment Fund Manager Act (AIFMG).

How you benefit

You can participate in a property portfolio with a low capital investment – with no need to go through the stock exchange. In contrast to property shares, the price of property funds is not determined by the stock exchange. The calculated value of the fund reflects the value of the acquired properties. 

The fund allows you to invest in properties that are considered to be substantial and stable in terms of value and therefore, allows you to take advantage of their profit prospects.

Investing in securities involves risks as well as opportunities.

Good environment for invested real estate funds

Advantages:
  • Broadly diversified real estate portfolio
  • Focus on residential buildings
  • Stable markets in Austria and Germany
Risks:
  • Real estate values may fall 
  • Investment may lead to a loss of capital Investing
  • This development can result in lower income as well as the suspension of payouts

Strict selection criteria

The ERSTE IMMOBILIENFONDS is the second mutual real estate fund of ERSTE Immobilien KAG to be classified as an Artical 8 fund (SFDR) as of 15th July 2024. As an Art. 8 funds the ERSTE IMMOBILIENFONDS advertises itself as a “city of short distances” with its ecological and social characteristics among other criterias. The properties are characterized by their central location. The essential facilities for daily basic services such as supermarkets, social infrastructure such as childcare, educational facilities including schools, medical care facilities including doctors surgeries are located in the immediate vicinity. They can be reached without using a car. Among other things this is intendet to achieve a reduction in CO2-intensity. Please note that investing in securities also involves risks besides the opportunities described.

Investing in a broadly diversified real estate portfolio

Broad diversification is important in order to spread the risk. This offers opportunities in different areas, such as the geographical location or how the property is used. The fund invests both in fully built and let properties as well as in projects that are still being planned or are under construction.

Details on the portfolio of ERSTE IMMOBILIENFONDS 

Everything you need to know

ERSTE IMMOBILIENFONDS

ERSTE IMMOBILIENFONDS

Advantages for investors: 

  • The real estate fund is an investment in tangible assets (land).
  • Real estate funds generally have a lower correlation with stock markets, as their returns primarily come from real estate.
  • As an addition to existing portfolios, the real estate fund provides an opportunity for long-term asset building.
  • Investment in a broadly diversified real estate portfolio with a focus on the residential sector in Austria and Germany (Hamburg).
  • The investment usually offers protection from inflation. This is because rents are normally adjusted for inflation.
  • Suitable for regular investments with small amounts of money – with the securities savings plan.
  • The real estate fund is suitable as security coverage for Austrian pension reserves (103.50 euros per share).
  • The real estate fund is suitable for the assessment of the investment-related profit allowance.

Risks to be considered:

  • Real estate values may fall and have a negative effect on fund performance
  • Tenants may vacate, and properties or parts of properties may stay empty.
  • This development can result in lower income as well as the suspension of payouts
  • Investing in real estate funds may also result in a capital loss.
  • The issue and redemption of shares may be suspended in exceptional circumstances.
  • The redemption of units remains possible at the daily net asset value without any notice periods until the end of 2026.
  • Effective 1 January 2027, a 12-month minimum holding period and a 12-month redemption notice period will come into force for all unitholders as required by law. This will be incorporated into the fund regulations.
  • For units held before 1 January 2027, a statutory transitional exemption allowance will apply, under which redemptions can be made without observing the redemption notice period up to the applicable allowance amount.
  • Due to the 12-month redemption notice period, there is a risk that the value of the units may decline before the redemption proceeds are paid out. The redemption amount may be lower than the unit value at the time the redemption declaration is submitted or lower than the original purchase price.
  • To safeguard investors’ interests, the following liquidity management tools may be applied: redemption gates and the extension of notice period.
  • The recommended holding period is at least 7 years. Investing in real estate or real estate funds should be seen as a long-term investment.

New Redemption Rules for Austrian Real Estate Funds from 1 January 2027

Currently, units in Austrian real estate funds can be redeemed daily at the current net asset value (NAV).

Effective 1 January 2022, an amendment to the Austrian Real Estate Investment Fund Act (Immobilien-Investmentfondsgesetz) was enacted. This amendment introduces new rules for the redemption of units in real estate funds. The new rules will apply from 1 January 2027 and include several important changes:

  1. Minimum holding period of 12 months
    Units must be held for at least 12 months before an irrevocable redemption declaration and the corresponding redemption order can be submitted for the first time.
  2. Redemption notice period of 12 months
    The redemption of units requires an irrevocable redemption declaration. After submitting this declaration and placing the redemption order, the payout will be made after 12 months at the net asset value applicable at that time. However, there is one exception to the redemption notice period: the annual exemption allowance.
  3. Exemption allowance rule
    • The exemption allowance applies to all investors and to units that are held in the custody account as of 31 December 2026.
    • In each calendar year, an exemption allowance may be redeemed per investor and per fund without observing the redemption notice period, at the current net asset value. An irrevocable redemption declaration is also required for this purpose.
    • 2027 & 2028: Annual exemption allowance of EUR 20,000
    • 2029 & 2030: Annual exemption allowance of EUR 10,000
    • From 2031 onwards: No exemption allowance applies (the 12-month redemption notice period will apply in full).

Why are these changes being introduced? The new rules are intended to strengthen the stability of real estate funds while safeguarding the interests of all investors. If a large number of investors redeem their units simultaneously, this may create liquidity challenges for the fund. The new notice periods allow fund management to plan more effectively and, if necessary, sell properties at market-appropriate prices. This underlines the fact that real estate funds are designed as a long-term investment.

What does the redemption notice period mean? Once the 12-month minimum holding period has expired, investors may submit an irrevocable redemption declaration and place the corresponding redemption order for the first time. Redemptions can only be processed through the investor’s custodian bank and not directly through ERSTE Immobilien KAG. The payment will be made 12 months after the redemption declaration is submitted and will be based on the net asset value determined at that future date. The only exception is the exemption allowance described above.

Why is there an exemption allowance? The exemption allowance is intended to give existing retail investors the opportunity to redeem smaller portions of their investment if needed. Within the scope of the exemption allowance, the redemption notice period does not apply. The exemption allowance is designed as a transitional measure for investors whose units were already held before the new redemption rules come into effect. For units acquired on or after 1 January 2027, this transitional arrangement does not apply. Consequently, no entitlement to the exemption allowance exists for such units.

We will provide you with further details in good time before the new rules and deadlines become effective. If you have any questions, please contact your bank advisor.

Important legal information

This document is an advertisement. Unless otherwise stated, the source of the data is ERSTE Immobilien Kapitalanlagegesellschaft m.b.H. The language of communication at the sales offices is German; English is also used as a language of communication at ERSTE Immobilien Kapitalanlagegesellschaft m.b.H.

The “Information for Investors pursuant to Article 21 AIFMG” is prepared for the alternative investment funds (AIF) administered by ERSTE Immobilien Kapitalanlagegesellschaft m.b.H. pursuant to the provisions of the Alternative Investment Fund Managers Act (AIFMG) in conjunction with the Real Estate Investment Fund Act (ImmoInvFG) and is published on the website at www.ersteimmobilien.at.

The latest versions of the prospectus, the “Information for Investors pursuant to Article 21 AIFMG” and the Key Information Document can be found on the website at www.ersteimmobilien.at under “Mandatory publications” and can be obtained free of charge by interested investors at the offices of ERSTE Immobilien Kapitalanlagegesellschaft m.b.H., Am Belvedere 1, 1100 Vienna and at the offices of the depositary bank, Erste Group Bank AG.

The exact date of the most recent publication of the prospectus and the “Information for Investors pursuant to Article 21 AIFMG”, the languages in which the Key Information Document is available and any other places where the documents can be obtained are stated on the website at www.ersteimmobilien.at.

Note: You are about to purchase a product that may be difficult to understand. We recommend that you read the above fund documents before making an investment decision. In addition to the places listed above, you can obtain these documents free of charge at the offices of the referring Sparkassen bank and the offices of Erste Bank der oesterreichischen Sparkassen AG. You can also access these documents electronically at www.ersteimmobilien.at.

Our analyses and conclusions are general in nature and do not take into account the individual needs of our investors in terms of earnings, taxation, experience and knowledge, investment objective, financial position, capacity to sustain loss and risk appetite. Past performance is not a reliable indicator of the future performance of a fund.

Please note: Investments in securities entail risks in addition to the opportunities presented here. The value of shares and earnings can rise and fall. Changes in exchange rates may also have a positive or negative impact on the value of an investment. For this reason, you may get back less than the amount you originally invested when you redeem your shares.

Anyone who is interested in purchasing shares in real estate investment funds is advised to read the current fund prospectus(es) and the “Information for Investors pursuant to Article 21 AIFMG”, especially the risk notices they contain, before making an investment decision. If the fund currency is different from the investor’s home currency, changes in the relevant exchange rate can positively or negatively influence the value of the investment and the costs associated with the fund in the home currency.

We are not permitted to offer, sell, transfer or deliver this financial product directly or indirectly to natural or legal persons whose place of residence or domicile is in a country where this is legally prohibited. In this case, we may not provide any product information either.

Please see the corresponding information in the fund prospectus and the “Information for Investors pursuant to Article 21 AIFMG” for restrictions on the sale of the fund to American citizens.

It is expressly noted that this communication does not provide any investment recommendations, but only expresses our current market assessment. Therefore, this communication is not a substitute for investment advice.

This document is not a sales activity by ERSTE Immobilien Kapitalanlagegesellschaft m.b.H., Am Belvedere 1, 1100 Vienna, and therefore may not be construed as an offer for the purchase or sale of financial or investment instruments.

ERSTE Immobilien Kapitalanlagegesellschaft m.b.H. is affiliated with the Erste Bank and austrian Sparkassen banks.

Please also read the “Information about us and our securities services” published by your bank.

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Media owner and publisher: ERSTE Immobilien KAG, Am Belvedere 1, 1100 Vienna

service@ersteimmobilien.at / www.ersteimmobilien.at / Place of publication: Vienna