
RossHelen/Envato
Barcelona, Spain
The recently-released 2025 Investment Intentions Survey, commissioned by INREV, ANREV, and PREA, provides a detailed look at how global institutional investors are adjusting their strategies for real estate amid ongoing economic and geopolitical uncertainties. The findings show allocations to non-listed real estate globally aligning closer to target levels, with significant shifts in preferences for markets, sectors, and investment routes.
European investors, who had been overallocated to real estate in previous years, have now rebalanced their portfolios to meet their 9.4% target. According to Irina Pylypchuk, INREV’s Director of Research, “The 2025 Investment Intentions Survey demonstrates only a slight underallocation to real estate globally. With European investors’ portfolios broadly rebalanced, this is a positive shift relative to the previous two years.”
Meanwhile, North American investors remain slightly below their target allocation of 11.2%, and Asian Pacific investors continue to trail their goals despite narrowing the gap.
Germany remains the preferred target destination for 71% of investors from Asia and North America, compared to 62% of Europeans. Among the non-Europeans, only the UK has higher approval ratings, at 93%. This preference reflects Germany’s reputation for market transparency, economic stability, and the positive experiences of past investors.
Spain displaces France from Top 3 European destinations
Spain’s emergence as one of Europe’s top three preferred investment destinations is a striking development. Strong GDP growth, low unemployment, and robust demand in the residential sector are driving Spain’s newfound popularity. For the first time, France has fallen from the top three, a shift Pylypchuk attributes to political instability and a high rate of insolvencies in the country. This reshuffling underscores a recalibration of investor focus toward markets with clearer growth potential and fewer structural challenges.
The survey also highlights a renewed interest in 'core' investment strategies. Preferences for core assets have risen significantly, from 21% in 2024 to 38% in 2025, reflecting a cautious approach among investors in Europe and North America. Despite this, appetite for higher-risk strategies, including value-added investments, remains robust, particularly among Asian Pacific investors seeking diversification and favourable pricing opportunities.
In terms of sector preferences, residential real estate maintains its dominance as the top choice for European investors, with unanimous support (100%). Logistics follows closely, driven by e-commerce growth and the optimisation of supply chains. Student accommodation has climbed to its highest ranking yet, with 67% approval, reflecting its resilience and stable income potential. In contrast, the office sector has seen a sharp decline in popularity, reaching a record low of 48%, a trend linked to evolving work patterns and market pressures.
Operating platforms now the preferred access route to assets
For the first time, operating platforms have emerged as the most preferred access route for European real estate investments. This reflects a growing desire for direct control and alignment with the residential sector’s expansion. Debt funds and multi-manager investment solutions also remain popular, offering tailored approaches to meet diverse market needs.
Sustainability continues to be a focal point for investors, though time-lines for net-zero targets vary widely. While 22% of respondents aim to achieve net-zero by 2030, the majority (61%) target post-2040 timelines, citing high implementation costs and economic challenges as barriers. European investors lead the charge, driven by stringent EU regulations, while North American investors generally place less emphasis on ESG criteria.
“2025 may stand as a 'placeholder year' for many investors,” Pylypchuk observes. With political and economic uncertainties dominating the landscape, investors appear focused on recalibration. The emphasis on core strategies and emerging opportunities in residential, logistics, and student housing underscores a careful but strategic approach.
For real estate managers, the implications are clear: prioritise quality, adapt to evolving sustainability demands, and offer flexible investment solutions. For investors, the year ahead offers an opportunity to rebalance portfolios and position for long-term resilience in a shifting market.