Deutsche Bank property arm sells Italian business

RREEF Real Estate, the real estate investment management business of Deutsche Bank’s asset management division, has sold RREEF Fondimmobiliari, its Italian property fund business, to Italian asset manager Castello Sgr.

RREEF Fondimmobiliari manages €473m of assets for retail and institutional investors. Its funds include Valore Immobiliare Globale, Piramide Globale, the RREEF Express Real Estate Fund, Elettra, Lioness and Rutenio.

Castello manages six funds: Augusto, Clesio, Cosimo I, Giotto, Picasso and Energheia, with combined assets of €850m.

The terms of the deal give RREEF Real Estate a 10% share in Castello, as well as a mandate for the management of the vehicles through its RREEF Opportunities Management Srl unit.

Giampiero Schiavo, chief executive of Castello Sgr, said the deal will help him reach a target €1.7bn in AUM by the end of 2012. His strategy is to reach a critical mass that would enable him to “optimise activities and to capture the opportunities that the market will offer”.

Gianluca Muzzi, head of RREEF Real Estate Europe ex-Germany, reaffirmed his company’s interest in the Italian real estate market, saying: “We want to continue to invest in it.”

RREEF’s European Real Estate Outlook, published in March, states that real estate performance across much of Europe is likely to weaken further this year, recovering slowly from 2013 onwards. According to the research, value growth in Southern Europe is likely to remain negative in 2012, resulting in weaker total returns.

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