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Real estate forms the backbone of family office portfolios in the DACH region, accounting for an average 56.5% of total assets - far exceeding typical institutional allocations - according to KINGSTONE Real Estate’s Family Office Report 2025. The survey of 32 family offices, conducted between August and September 2025, reveals investment patterns markedly different from traditional institutional investors.
“Family offices invest fundamentally differently from traditional institutional investors, who have significantly lower real estate allocations,” said Dr Tim Schomberg, CEO and co-founder of the Munich-based KINGSTONE Real Estate. Equities represent the second-largest allocation at 19.4%, with all other asset classes, including cash and bonds, weighted significantly lower.
The preference for direct control is pronounced: 81.4% of family office real estate holdings are direct investments, while joint ventures with other family offices (59.4%) and club deals (40.6%) are also popular. Investments in special funds alongside institutional investors are less favoured, reflecting family offices’ desire for operational involvement and decision-making authority.
Residential property dominates portfolios at 37.5% of real estate assets, followed by offices (25.0%), mixed-use buildings (12.8%) and retail (6.3%). Renewable energy investments account for just 1.8% - a figure Schomberg described as surprisingly low given current market trends.
Geographic concentration poses potential diversification risks. German assets represent 88.3% of family office real estate portfolios on average, with only 5.9% in Europe excluding Germany and 5.4% in North America. “This allocation has often grown historically,” noted Philipp Schomberg, co-founder and partner responsible for international investments. “Nevertheless, the question must be asked whether the share of Germany is not far too high from a diversification perspective.”
Despite already high allocations, family offices are far from fully invested. Half of respondents expect real estate portfolios to grow moderately (0–10%) over the next twelve months, with a further 9.4% anticipating strong growth exceeding 10%. Only 15.7% plan reductions.
Investment priorities for the coming year remain focused on residential property, particularly in Germany: 60% plan to acquire existing residential stock and 50% new developments. US residential also features prominently, with 36.7% targeting existing stock and 33.3% new builds. Office and retail properties in Europe rank at the bottom of investment intentions.
Location quality, experience with asset types, and capital preservation remain decisive factors—rated ahead of returns. “Family offices make very rational and, at the same time, rather conservative decisions,” said Philipp Schomberg. Reputation, emotional factors and architectural features rank lower in importance.
Return expectations align with this conservatism: nearly 40% target distribution yields between 3.0% and 4.5% annually, with 22% seeking 4.5–6.0%. Only 25% expect yields exceeding 6.0%.
The survey participants manage substantial portfolios: 44% oversee assets exceeding €500 million, with a further 13% between €100–500 million. Their behaviour - high real estate concentration, preference for direct control, residential bias, and moderate return expectations - positions family offices as a distinct source of capital in the German market, operating on longer time horizons and with different risk appetites than institutional funds.
For institutional investors, this concentration of private wealth in domestic residential helps explain why pricing in Germany’s housing market remains resilient even amid higher rates. Family offices, less driven by quarterly performance, act as stabilising, long-term counterparties to institutional capital.