OPPORTUNITIES AND RISKS

THANKS TO ITS STRUCTURE, LEADING CITIES INVEST WILL OFFER STABLE INCOME AND GENERALLY LOW FLUCTUATIONS IN VALUE.

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Opportunities and risks

Key opportunities

  • Investors have the opportunity to benefit from the opportunities to generate returns offered by large, international, high-quality properties, even in the case of small investment amounts.
  • LEADING CITIES INVEST diversifies risk by spreading its investments wide by across different locations, types of use, and lease terms.
  • LEADING CITIES INVEST provides inflation protection, since rents are indexed in most cases.
  • Thanks to its structure, LEADING CITIES INVEST will offer stable income and generally low fluctuations in value.
  • Properties are managed professionally by a respected team.
  • Investors benefit from tax advantages thanks to the high tax-free portion of the distribution.

Key risks

  • Property risks such as negative changes in the budgeted rental income for properties, declines in value due to negative trends in individual properties or the real estate market as a whole, and changes in the property management costs can impact the investment fund’s performance and as a result can also adversely affect the unit value.
  • The most important counterparty credit risk for an open-ended real estate fund is tenant default risk. This describes the loss of or reduction in rental income due to changes in tenants’ ability to pay.
  • Other market risks, such as interest rate-related risks affecting the liquidity portfolio and debt financing, changes in the price or value of the cash invested in financial instruments used to invest cash funds, and declines in value due to exchange rate changes for assets that are not denominated in the fund currency can also lead to fluctuations in the unit value.
  • The main liquidity risks are that the cash funds invested will not be sufficient to service redemption requests and to guarantee orderly ongoing management, or that they will not be available when needed. Despite the implementation of measures to generate liquidity, events affecting cash flows may result in the suspension of unit redemption.
  • In addition, operational risks due to the fund’s business processes or external factors can also impact the value of the fund assets.

Note: Detailed information on the investment objectives, the investment policy, and the risks can be found in the current Sales Prospectus (only available in German).

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