INTREAL Report: Institutional real estate fund assets decline by €3.9 billion in 2024

The net fund assets of institutional open-ended real estate funds in Germany declined by approximately €3.9 billion in 2024, marking a shift in the market trend, according to data from Deutsche Bundesbank. By the end of the year, total fund assets stood at €178.3 billion, down from €182.2 billion in 2023—a decrease of 2.1%.

Commenting on the development, Camille Dufieux, Managing Director of INTREAL, highlighted the significance of this downturn. “This is a new trend, as total net fund assets had been experiencing continuous growth in previous years. In 2023, fund asset growth was around 5.0%, and in 2022, it was 12.5%. The decline in 2024 is primarily due to markdowns in asset values,” Dufieux explained.

Despite the reduction in total fund assets, institutional real estate funds recorded a net cash inflow of approximately €7.4 billion over the year. Additionally, the number of institutional real estate funds continued to rise, reaching 684 vehicles by the end of 2024, an increase of 13 funds compared to 671 funds at the end of 2023.

Dufieux described the situation as mixed. “On the one hand, we are seeing growth in the number of funds and a clearly positive cash inflow. On the other hand, markdowns in asset values have impacted total fund assets for the first time in years. This reflects a lag in the performance of real estate values within these funds compared to the broader real estate market.”

Looking ahead to 2025, Dufieux expressed cautious optimism, stating that INTREAL and its fund partners anticipate launching three to five new institutional open-ended real estate funds over the course of the year. The market’s ability to attract capital inflows despite asset value adjustments suggests continued confidence in institutional real estate investments.