European real estate funds exceed €1 trillion in net assets despite moderate growth in 2024

Net fund assets in regulated European real estate funds surpassed €1 trillion in 2024, achieving a total of €1,026.2 billion by the end of the third quarter, according to data from the European Fund and Asset Management Association (EFAMA). This marks a growth of €26.8 billion, or 2.7%, compared to the €999.4 billion recorded at the end of 2023.

Rudolf Kömen, Conducting Officer of INTREAL Luxembourg, highlighted the significance of this milestone despite a challenging year. “The modest increase during 2024 is remarkable, given that investment funds reported a net cash outflow of €2.2 billion during the first nine months. Of this, €1.4 billion occurred in the third quarter alone. The rise in fund assets is largely attributable to stabilizing price levels in real estate markets, which led to mark-ups,” Kömen said.

The data shows a diverse performance across countries. While real estate funds in Germany, Austria, and the United Kingdom experienced net cash outflows, other markets, such as Ireland and Switzerland, reported substantial inflows. Ireland saw an increase of €1.2 billion, while Switzerland recorded inflows of €782.8 million.

Across Europe, the total number of alternative investment funds (AIFs) in the real estate sector rose to 3,949 by the end of Q3 2024, an increase of 38 funds since the close of 2023.

Reflecting on 2024, Kömen acknowledged the year’s challenges for real estate funds, particularly the limited number of new fund launches. However, he expressed optimism for 2025, anticipating stronger inflows, particularly from institutional investors.

“We are currently involved in the preparation of new funds, many of which are at advanced stages. Institutional investors are likely to drive increased cash inflows in the coming year, although private investors may take longer to re-engage due to their more cautious nature,” Kömen explained.

The real estate fund market’s ability to grow in value despite net outflows underscores its resilience and the stabilizing dynamics within the sector. With improving conditions expected in 2025, industry stakeholders are hopeful for renewed momentum in the European real estate investment landscape.