European real estate AIFs grow to €1 trillion amid outflows

In 2025, European real estate alternative investment funds (AIFs) continued to grow, reaching €1.04 trillion in net assets, a 1.4% increase from the previous year, despite experiencing significant capital outflows.

Ilva Diaco

The number of these funds also grew by 226, totalling 4,258 by year-end, according to the European Fund and Asset Management Association (EFAMA).

Ilva Diaco, conducting officer for Portfolio Management, Marketing & Distribution at Intreal Luxembourg, noted that while growth was more modest than in prior years, these figures suggest the market is stabilising. She highlighted a selective recovery, with broad easing not yet apparent, and pointed to geopolitical tensions, economic uncertainties, and inflation concerns causing nervousness in early 2026, making asset quality and financing security crucial for investors.

Despite the overall growth, European real estate AIFs saw net outflows of approximately €11.17 bn in 2025, representing about 1.08% of the previous year's assets. Luxembourg experienced above-average outflows at 6.8% (€9.26 bn), while Germany was close to the European average with 1.13% (€3.24 bn in outflows). Conversely, Greece and Switzerland saw positive capital flows, with inflows of 7.3% (€535 mln) and 4.5% (€2.37 bn) of their respective previous year's assets.

Diaco added that capital flows across Europe present a mixed picture, with some markets still facing outflows while others see renewed investor interest, indicating a persistently challenging environment.

Despite these challenges, Intreal Luxembourg achieved significant growth and client expansion last year, attributing this success to their tailored solutions and close client support offered through a local boutique approach backed by their Hamburg platform.