DB Real Estate, Deutsche Bank’s property funds business has replaced its chief executive, Michael Kremer, with Holger Naumann, of sister fun...

DB Real Estate, Deutsche Bank’s property funds business has replaced its chief executive, Michael Kremer, with Holger Naumann, of sister fund manager DWS.

In what Deutsche claims to be an unrelated move, the bank has brought in external auditors to quantify the decrease in value of its core Grundbesitz-Invest fund which has €6.1 billion ($7.2 billion) invested.

The fund owns 128 properties: two-thirds by value of which are in Germany and a third in the rest of Europe.

In the last two years investors have withdrawn around €2.5 billion from the fund, which is thought to be facing significant write-downs in the book values of its properties after the audit.

Germany's commercial real estate market has been particularly weak in recent years. Last year Germany’s Deka was forced to inject €2.2 billion into its property fund after poor underlying performance prompted massive outflows.

Germany’s property fund industry has also been beset by corruption scandals involving fund managers, architects, lawyers, project managers and brokers who are accused of bribery, money laundering, and tax evasion among other crimes. The resulting publicity has done nothing to steady German property investors’ nerves and has sparked still more outflows from property funds.