Fokus Wohnen Deutschland suspends share redemption

Investors currently cannot redeem shares in the open-ended real estate fund

The open-ended real estate fund “Fokus Wohnen Deutschland” suspended share redemption on February 26, 2026. For investors, this means they cannot currently return their fund shares to the fund company and therefore cannot access the invested capital in the short term. According to the legal framework, a suspension of share redemption can last up to 36 months.

The process is part of a phase where several open-ended real estate funds have come under pressure. In addition to significant value adjustments in individual funds, share redemption was also temporarily stopped in comparable cases. For investors, this is particularly relevant because it results in a liquidity risk that must be disclosed during proper investment counseling.

Real estate market crisis burdens open-ended real estate funds

The fund “Fokus Wohnen Deutschland” was launched by IntReal International Real Estate Investment Management GmbH and is managed by Industria Immobilien GmbH. According to the fund management, the fund predominantly invests in residential real estate in German metropolitan areas. The fund currently holds 45 properties with over 2,700 apartments as well as 163 commercial units.

As reasons for the suspension, the management cites the ongoing crisis in the real estate market, increased interest rates and higher financing and refinancing costs. Additionally, there is a decreased transaction volume and an extended transaction duration for sales. Moreover, open-ended real estate funds have been experiencing net outflows for some time; this trend has recently intensified again. The fund is also affected.

According to the management, liquid assets are not sufficient

According to the fund management, the available liquid assets were not sufficient to simultaneously (1) meet redemption requests from investors and (2) properly ensure the ongoing management of the properties. Therefore, the suspension of share redemptions was decided. Similarly, at present, no new shares are being issued.

Open-ended real estate funds typically invest in illiquid assets (real estate), while investors can generally redeem shares. However, if many investors want to sell at the same time, it can lead to liquidity shortages. Historically, this tension was particularly evident after the 2008 financial crisis, when several funds were closed and sometimes liquidated later.

Redemption period and minimum holding period

To limit mass redemptions in a short period of time, certain legal restrictions apply to open-ended public real estate funds for redemptions: investors can no longer redeem shares at any time, but must observe a redemption period of 12 months observe and have held the shares beforehand at least 24 months have held.

This structure can slow down returns, but it does not provide complete protection if the economic situation in the real estate and transaction market deteriorates significantly. If there are high redemption requests while the saleability of properties is limited, a suspension of redemption can be used as a tool to ensure liquidity.

According to management, in the “Focus Living Germany,” since 2024 ten properties with a total volume of 163 million euros have been sold. Further sales are being worked on to generate additional liquidity and end the suspension as soon as possible.

Suspension of share redemption: significant liquidity risk – disclosure obligations

The suspension of share redemption can last – depending on the legal basis and individual case – up to 36 months. After that, the redemption must generally be resumed, or further steps may be considered, such as a liquidation of the fund according to the applicable legal regulations.

For investors, the possibility of a suspension represents a significant risk because during this time, they may not or only have limited access to their capital. The Federal Court of Justice clarified with judgments of the April 29, 2014 (Ref. XI ZR 477/12 and XI ZR 130/13) that the liquidity risk due to a possible suspension of share redemption must be disclosed during investment advice.

Important: Whether there is a breach of duty always depends on the specific circumstances, including the type of distribution, content of the advisory conversation, the documents provided (e.g., sales prospectus/basic information sheet, product information sheets), and the risk profile of the investor.

Further Risks of Open-ended Real Estate Funds

Apart from the suspension of redemption, investors are typically exposed to additional risks, including:

• Market and Valuation Risks (e.g., value adjustments in real estate valuations),
• Rental and Vacancy Risks (declining rental income, increased turnover),
• Maintenance and Renovation Risks (increasing modernization needs),
• Interest and Financing Effects (higher cost of external capital, difficult refinancing),
• Liquidity and Transaction Risks (limited saleability during weak market phases).

These aspects should be explained comprehensibly in an investor- and object-appropriate consultation. It is also important to regularly check whether a product was suitable in terms of theinvestment objectives, term expectations, and liquidity needs of the investor.

Compensation Claims: Examination on a Case-by-case Basis

If significant risks were not explained, risks were downplayed, or the investment did not match individual investment objectives (e.g., short-term liquidity needs),compensation claims may be considered. This could be based onadvisory errors orincomplete risk disclosure. The specific case is always decisive, particularly which information was provided and which documents were handed over.

Note on Limitation Periods:Whether claims are time-barred can only be assessed based on the specific data (subscription, advice, knowledge, correspondence). A timely review may be advisable.

Legal Notice

This article is for general information purposes and does not constitutelegal advice. A conclusive assessment is only possible after examining the documents and the specific circumstances.

MTR Legal Attorneys provide advice inCapital Market Law regarding questions about open real estate funds. Further information can be found here: Contact.