Deutsche Bank’s asset manager DWS is considering emergency measures to stave off a liquidity crunch at three German property funds, as an investor exodus puts pressure on the country’s €100bn-plus property fund industry. Three DWS “Grundbesitz” open-ended funds have collectively paid out €6bn to investors — around half of their assets under management — since 2022, forcing them to sell properties worth €4.5bn and pushing their borrowing towards statutory limits.

DWS is now considering limiting redemptions or imposing penalty fees on departing investors under new EU rules, according to people familiar with the matter. The pressure comes as DWS winds down a smaller US retail property vehicle, RREEF Property Trust, which had a net asset value of $203mn at the end of June.

Investors have pulled a net €17.3bn from German-domiciled open-ended retail property funds since the beginning of 2024, reducing the industry’s assets under management to €107bn by the end of July, according to Bundesbank data. Ba Fin, Germany’s financial regulator, warned that further funds could suspend redemptions, calling the withdrawals a “structural risk” to the sector unless conditions in commercial-property markets improve.