dit26978/Envato
The European real estate fund market quietly crossed a significant milestone in 2024, with net fund assets surpassing €1 trillion by the end of the third quarter. According to data from European Fund and Asset Management Association EFAMA, these assets grew by €26.8 billion—a modest 2.7% increase—despite challenges such as net outflows of €2.2 billion during the first nine months.
INTREAL
Rudolf Kömen, Conducting Officer, INTREAL Luxembourg
Rudolf Kömen, Conducting Officer of INTREAL Luxembourg, highlighted this achievement, noting, "The modest increase during 2024 is remarkable, given that investment funds reported a net cash outflow. Stabilising price levels in the real estate markets largely explain this growth in fund assets."
While countries like Ireland and Switzerland enjoyed substantial inflows (€1.2 billion and €782.8 million, respectively), others, including Germany, Austria, and the UK, recorded significant outflows. Statistically, the number of regulated European real estate alternative investment funds (AIFs) rose to 3,949 by the end of Q3, up by 38 funds compared to the previous year.
Kömen anticipates a brighter 2025 for Luxembourg's fund management industry: "Institutional investors are poised to drive cash inflows next year. We are already preparing several fund launches, with some at an advanced stage. Private investors may take longer to return than institutionals, as they tend to adopt a more cautious approach."
INTREAL’s Luxembourg operations have become instrumental in attracting international capital by offering customised fund structures designed to meet the unique requirements of non-German companies. Kömen explained, "Luxembourg's regulatory framework provides unmatched flexibility and efficiency, offering a one-of-a-kind platform for fund structuring, combining regulatory flexibility with global connectivity—a key advantage for our international clients."
In 2024, INTREAL Luxembourg focused heavily on launching new funds, adapting to the varied demands of institutional investors across Europe. "Our focus has been on tailoring fund structures that not only align with market realities but actively address investor needs for flexibility and compliance," said Kömen.
Growing importance of infrastructure and private debt
Camille Dufieux, Managing Director of parent company INTREAL in Hamburg, brings a long-term perspective to the group’s strategy. Reflecting on her leadership role in a recent interview, she remarked, "We are navigating some of the most challenging times since the financial crisis. These challenges demand creative solutions and a proactive approach to innovation."
Dufieux highlighted the importance of diversification in INTREAL’s service offerings. "Real estate is no longer the sole focus for many institutional investors," she noted. "Institutional investors are increasingly diversifying into infrastructure and private debt, and we are leading the charge in adapting our services to meet this growing demand."
In line with this vision, INTREAL has launched REAX Advisory GmbH, a subsidiary specialising in consulting services. "By expanding into consulting and creating key roles within the company, we’re setting new benchmarks in the industry," Dufieux added.
With stabilised prime yields and signs of market recovery, both Kömen and Dufieux foresee 2025 as a year of 'cautious optimism'. Institutional investors are expected to dominate, driven by value-add opportunities and strategic partnerships.
"Our focus remains on delivering tailored solutions that align with our clients’ evolving needs," Kömen emphasised, pointing to INTREAL Luxembourg’s growing role as a bridge between international capital and European real estate opportunities. "The increasing importance of Luxembourg in our operations underscores our ability to adapt and thrive in a competitive environment," he added.
Dufieux concluded by reflecting on the broader industry’s trajectory: "The past year challenged us to redefine what resilience looks like, compelling us to find smarter, more efficient ways to serve our partners."
