Just weeks after an open real estate fund closed for the first time since the financial crisis, another fund has followed suit. The fund company Industria announced on Thursday that it would stop redeeming shares for its open real estate fund Fokus Wohnen Deutschland, effective February 26 at noon, due to insufficient liquidity to meet redemption requests. This marks a significant shift for open real estate funds, which were once considered stable investments, particularly among local savings banks and cooperative banks, leading to investor concern and uncertainty.

Open real estate funds, often marketed as a secure investment option, are now facing challenges as the second fund closure occurs in a short period. Investors are left unable to access their savings, raising questions about the overall stability and reliability of these funds. The situation highlights the risks that were previously understated, as many investors believed these funds were a safe haven during fluctuating economic conditions, especially in light of rising interest rates which are now impacting liquidity.

In the backdrop of this financial struggle, a recent evaluation of a significantly devalued open real estate fund has intensified scrutiny on providers like Union Investment. They faced serious accusations regarding the lack of transparency and the management of risks associated with these investments. As the landscape for real estate funds changes due to increased interest rates, investors must reevaluate their strategies and providers need to respond with better risk management practices to restore confidence in such investment options.